Thousands of meters beneath the waves and the sea floor, new technology pioneered by small firms is helping to make oil production sustainable at extreme temperature and pressure.
More than a decade of high oil prices combined with restrictions in oil-rich places such as the Middle East has made deeper subsea reservoirs in Brazil, the Gulf of Mexico and the North Sea increasingly attractive for major companies.
That has in turn spawned a range of smaller companies developing new materials and monitoring systems for the task.
At the Offshore Europe oil show in Aberdeen, the northern Scottish city that is an industry hub, more than 1,500 companies from around the world showed off shiny new hardware and televised recreations of subsea machinery in action.
Even high-end steel can struggle to handle the levels of corrosive hydrogen sulphide, extreme pressure and temperatures of 140 degrees Celsius encountered at depth. Materials corrode faster and design life is cut short, making the process both costly and dangerous.
Intervention to repair or replace equipment on deep-sea fields is also difficult and expensive, making software which accurately measures when maintenance is needed extremely valuable as it allows production to continue.
The value of deep sea innovation has not gone unnoticed among the industry's service companies.
In recent months Britain's Wood Group bought Intetech and Norway's Aker Solutions acquired I.D.E.A.S, both firms which specialize in preserving the sustainability of subsea wells through measuring the wear of equipment.
"High pressure high temperature is an excellent example of where technology will be needed to make the risk and cost of developing these fields acceptable," Andrew Gould, chairman of BG, told delegates in Aberdeen.
NICHE PLAYERS
Larger equipment makers, like GE Oil and Gas, are hesitant to over-commit to what remains a specialized market, leaving much of the innovation to smaller firms.
"At this point in time it's still a fairly small niche. It's one we always struggle with from the point of view of how quickly and how much do we put in," Rod Christie, chief executive of GE Oil and Gas Subsea Systems, told Reuters in an interview, adding that high pressure high temperature (HPHT) currently accounts for about 5 percent of the equipment market.
This has put the emphasis on smaller firms creating space for private equity and acquisitions.
"I definitely see more acquisitions ahead," Charles Whall, portfolio manager at Investec Asset Management, told Reuters.
"Anyone that has any kind of intellectual property in this space is likely to get consolidated," he added.
Glynn Williams, partner at specialist oil services private equity group Epi-V, agreed.
"The smaller firms are more nimble... We're looking at firms in well integrity and material science," he told Reuters, scouring the oil show in Aberdeen for investment opportunities.
BUILT TO LAST
One exhibitor at the show aiming to grow its oil and gas offerings is U.S.-based CoorsTek, a family owned company which has been making ceramics for a hundred years. It now designs equipment for both the aeronautics and oil industry.
"This is not the same as your coffee mug, this is a different class of material," Jim Schienle, general manager at CoorsTek, told Reuters holding a ceramic valve.
"This kind of ceramic can outlast steel 10 to 1."
The crossover between aviation and oil is becoming more common as the level of heat and pressure-resistance needed in deep-sea wells rises. Dutch firm Airborne also manufactures for both sectors designing high-end composite piping which could be a long-term replacement for steel.
The flip side of the race to develop new materials is software to track how long current equipment will last.
One firm leading the way is Norway's privately-owned ExproSoft, whose Wellmaster system collates data from 5,000 wells, looking at the type of material and the environment in which it is used, to predict when maintenance and replacements have to be done.
"If you have a newly constructed well we can tell you which part will break first and to a certain extent why," Bjorn-Ovin Wivestad, project manager at ExproSoft, told Reuters.
"The big question oil companies often cannot answer is 'why things fail?'," he said. "We help answer that."
