Plexus on verge of oil technology breakthrough

Plexus on verge of oil technology breakthrough
Updated 22 November 2013

Plexus on verge of oil technology breakthrough

Plexus on verge of oil technology breakthrough

LONDON: Oil equipment supplier Plexus is finalizing a piece of subsea kit that should revolutionize production of oil and gas from reservoirs under high pressures and temperatures, Chief Executive Ben van Bilderbeek said.
Developed in partnership with oil companies including Shell , Total and Eni, the subsea wellhead — a tap controlling flow on an oil well - will be ready for testing by the middle of next year.
The company is funding the project alone and will keep all connected patents but the input from oil majors means the product can be honed to their needs.
Plexus is part of a trend of smaller innovators, such as Norway’s Ziebel and ExproSoft, looking to meet the challenges of producing oil and gas from conditions where temperatures hit 150 degrees Celsius and pressure exceeds that in the chamber of a firing pistol.
Data for high pressure, high temperature (HPHT) wells is hard to find as drill data tends not to distinguish, but these conditions increasingly accompany big oil finds in places like the Gulf of Mexico, the North Sea and offshore Brazil.
Van Bilderbeek, 65, said the move into HPHT had leveled the playing field in a sector typically dominated by a few big players and, in doing so, revitalized his business.
The subsea wellhead will use an engineering system Plexus developed over 15 years ago but which has struggled to find broad acceptance in the industry.
“I’m not critical about the way things were done in the past, but when I came up with a solution the industry stiff-armed me,” van Bilderbeek told Reuters in an interview in London. “They said we invented problems to sell solutions.”
Now Plexus is at the table. “On something cutting edge like HPHT the operators are happy to try something new.”
Plexus has seen profits grow seven fold since 2010 as the company’s surface wellheads, using its patented POS-GRIP system, have become widely used for exploration wells in the North Sea.
The POS-GRIP system works from the ‘outside in’ by squeezing the wellhead body onto the device that supports the pipe going into the ground using hydraulics.
Conventional wellheads instead work from the ‘inside out’ and use a more complex arrangement to set seals. Plexus says its system is safer, more reliable and cheaper over the long-term.
The technology has brought Plexus head to head with bigger US makers of wellhead equipment like GE Oil and Gas, FMC Technologies and Cameron.
Plexus, which largely loans out equipment to oil companies for exploration drilling, wants to move into selling wellheads for production. To do this it needs to invest heavily to develop its own manufacturing capability or share its patented system.
Van Bilderbeek, who funded his first wellhead from the proceeds of property development in London, rules out taking on the debt needed to build the manufacturing capacity alone.
Instead he is keen to come to a license sharing agreement whereby the wider industry can use Plexus’ technology in their own products in the same way as Dolby is used in sound systems or Gore-Tex in weather-proof jackets.
Such an agreement is uncommon in the oil and gas industry -and it would be far more usual for Plexus, which has a market value of $350 million, to get bought by a bigger rival.
But with management owning 70 percent of the shares and van Bilderbeek in no mood to sell, the future remains uncertain.
Talking about Plexus’ subsea wellhead system, van Bilderbeek said: “We will grow this carrot, polish it. It will be big and fat and beautiful and then we will hang that carrot in front of the industry and see what happens.”