The Simple Innovation Principle: Things Can Only Get Better

By David Stephenson, CEO

The great management thinker, Peter Drucker, could have been talking about innovation in oil industry technology when he said: “An innovation, to be effective, has to be simple and it has to be focused. It should do only one thing, otherwise it confuses. If it is not simple, it won’t work.”

In fact, he could have been talking specifically about our approach, at DCT, to new product development. We believe in simple innovation that is focused on meeting and surpassing the specific needs of our customers. We do this by taking existing, proven technologies and making them better.

While disruption is one of the business buzzwords of the digital age, we believe there is no need to complicate matters. Refinement and iteration are central to the proven Japanese concept of kaizen or continuous improvement. It should perhaps come as no surprise that Tokyo is ranked as the most innovative hi-tech hub in the world in the latest definitive global league tables. Continuous improvement is also the development model applied by Apple to the iPhone over the last decade.

At DCT, we specialise in the design, engineering and manufacture of innovative hydromechanical products that add value to well construction, well completion, casing and slot recovery. Our simple, enabling technologies are designed to land casing and completions at target depth in oil and gas wells, improving performance while minimising costs, timescales and risks.

The launch of our patented drill pipe swivel is a case in point. This new technology will help unlock reserves in long, horizontal extended-reach drilling (ERD) wells. With its purely mechanical operation, it also saves the time and the risk of affecting other tools in the string that is associated with hydraulic tools.

It is also safer. The risk of personal injury to operators is much lower than with conventional technology as less manual handling is required on the rig floor.

Another of our innovative tools is currently being fast-tracked in partnership with Total, who are providing trial wells in the UKNS in early 2020. The casing cement breaker is a pioneering well abandonment tool which overcomes problems faced by existing conventional methods of slot recovery. The hydromechanical tool, which is run down hole on drill pipe, works using pressure and rotation to break down the bond between cement and casing, as well as the structure of the cement behind the casing.

In its first field trial the breaker reduced the force needed to pull the casing by half – again saving time, money and reducing risk, with further improvements seen during in-house testing.

Such is the demand that the tool has gone from a concept on a white board to offshore trials with Equinor, the Norwegian oil multinational, in the Norwegian sector of the North Sea in just nine months. Following the successful demonstration of the prototype we are developing a stronger second-generation version, in line with our strategy of product iteration.

Well abandonment accounts for an estimated 45% of the entire cost of decommissioning. In the next decade, 1400 wells are due to be abandoned on the UK Continental Shelf alone. With higher oil prices, operators increasingly want to re-use well slots, in order to drill new wells, which is where our casing cement breaker comes into its own.

Over the last decade, DCT has been at the forefront of pushing the boundaries of turbine technology. Our Turbocaser and Turborunner technologies were launched in 2011 and rapidly became the Rolls Royce tool in their category with over 450 tools sold to date.

However, relying on a single product line, even a successful one, is never a good idea. It was almost impossible not to succeed when the oil price was at $120 a barrel. But between 2014 and 2016 the oil price fell by 70%, exposing the shortcomings of such an undiversified strategy.

The truth of Warren Buffet’s acute observation on sustainable, long-term financial performance – “Only when the tide goes out do you discover who’s been swimming naked” – became apparent. The company was treading water at that point and it became clear that something had to happen.

With a new senior leadership team in place, and supported by EVPE, we worked with our suppliers to diversify our product portfolio and identify new opportunities such as the USA shale and fracking land market.  We partnered with entrepreneurial inventors who were keen to devise new products but had no route to commercialise them. Our model is that of a lean company that engages collaboratively with inventors, secures their IP, enhances their products and takes them to market.

At DCT, our focused strategy of simple innovation will enable us to continuously improve and adapt products to meet customer needs across all territories, conditions and well lifecycle stages of the upstream global oil and gas industry. The last word goes to Peter Drucker, who shares our views on the clarity and power of simple innovation.

“All effective innovations are breathtakingly simple. Indeed, the greatest praise an innovation can receive is for people to say: ‘This is obvious. Why didn’t I think of it?'”