This summer sees Aberdeen’s Expro Group celebrate 40 years in business. Like many North Sea firms it started small but, unlike most, it was so successful that it was sold to a Candover-led consortium of institutional owners under the name Umbrellastream in 2008 for £1.8billion in a hard fought battle for possession in which Halliburton was the other contender.
Well flow management specialist Expro regards itself as having a technology edge and so Energy asked group technology director Daniel More to pick out what he regards as highlights and to look to the future.
“Number one for me is the move into subsea. It started roughly in the mid-1990s,” he said.
“If you look at some of the acquisitions that we carried out . . . WWS (Wireless Well Solutions, ex of Flight Refuelling), which moved us into wireless telemetry; Cidra in the mid 2000s – metering; PWS (PowerWell Services) which included Petrotech and gave us a lot more flexibility and capability.
“Then there’s the AX-S subsea well intervention system. That was a huge milestone for us; obviously unsuccessful in terms of getting it commercialised, but it is a milestone in terms of demonstrating our ability to develop technologies.”
There is also the 2010 acquisition of Production Testers International (PTI), though More regards this purchase as more strategic than technological in nature.
Contrary to anecdote, More said Expro invests more in research & development today than it ever did . . . around 1.5% of turnover versus 1% during its time as a listed company.
Indeed the current year sets a new record in that regard with R&D creeping nearer 2%.
But how has this been made possible given the conventionally short-term outlook of private equity, the demise of AX-S, which was in essence dumped, plus the sale of Tronic, which had been acquired in 1989?
More: “The sale of Tronic has allowed us to plough funds back into the company to invest for the future, AX-S aside.
“The highlight for us is taking our subsea technology forward . . . maintaining ourselves as number one in that field with the technology that we’ve got. But the approach is evolutionary.”
He hinted at one of the key negatives to do with AX-S . . . it was too narrow in terms of application.
“One of the disadvantages of AX-S was that you couldn’t run coiled tubing. You were limited to just a part of the intervention market.
“We’re still looking at means of intervening on wells, but differently; more flexibly. This means new lightweight technology that can be commercially viable. What we’re considering is almost an evolution of our subsea landing string technology, but different.
“If you look at current systems, they’re all very heavyweight, pretty expensive, not readily available. The feedback that we’re having means that we’re looking to develop systems that are lightweight and based on a call-off market rather than sales-based.”
When AX-S was conceived the idea was that it could even be worked off a supply vessel and it would be regarded as lightweight, even at 130 tonnes. So what does lightweight now mean?
More: “Ideally the solution for us is to have a ball-valve technology . . . something that we could run through the rotary table (of a rig) as opposed to slinging below the moonpool and having a big skid frame.
“It’s effectively about running a landing string in an open water situation. The advantage to the client is that he doesn’t have to run his BOP (blow-out preventer). There would be a time saving . . . a rig saving.”
The idea is that the new approach will allow Expro offshore teams to run wireline, coiled tubing and to conduct all intermediate intervention.
“We’re at very early stages. We’re still pulling it together in a variety of ways including concept designs and doing feasibility studies. In reality, I think we’re two years away from having something that’s commercially viable . . . to put into the field.
“Many of the building blocks are already there. We need to develop some of the connectors, look at some of the hardware in terms of housing design, but most of the key technology will have been developed anyway.”
And the development cost? According to More it will be in the range of about £10-15million.
However, even fast-track can seem slow as this concept was first discussed three years ago. There is also the “over-the-shoulder” element as FMC, GE and Aker have intervention systems available.
Expro is not alone; the company has the support of various clients, which is essential in today’s industry.
Though Expro is the initiator, the company is also looking to dilute risk by bringing in one or more partners. It also hopes to involve the Industry Technology Facilitator (ITF).
“We’re holding discussions with ITF with a view to setting up workshops together to look at some of the key challenges,” said More.
“Our main discussion with ITF just now is in terms of putting workshops together to look at some of the key challenges in terms of the intervention market to help us develop some of this technology.
“From a delivery standpoint, our ideal solution was to develop everything in-house. But the likelihood is that we will partner up with a number of companies within the supply chain to develop and deliver.”
The hope is that workshops will begin later this month or next.
More is keen to see Expro take various of its key technological components forward and the prime one is wireless technologies.
“Currently, in terms of the density of the data that we can send to surface in a wireless environment, we’re probably not quite there yet in terms of having a downlink duplex capability to command valves and change the data-rate, switch transmitters on and off, and the like.
“We’re still developing the technology but once we’ve developed and field proven it in a duplex environment, I think the opportunities are endless.
“We’re looking to take this technology and apply it to DST (drill-stem test) valves; we’re looking at well integrity including gauges in the B annulus and C annulus; and we’re talking to some people about completions.
“There are a number of enabling technologies to develop . . . certainly the duplex aspect.
“We’re also considering a number of R&D projects looking at batteries and battery life and having our gauges in-field for the duration.”
More indicated that Expro has been researching batteries for a number of years, partnering with universities, doing a number of research projects, looking at the latest battery technologies to extract as much life out of them as possible. The company is also looking at power transmission downhole for charging batteries in-situ.
A third example of current R&D priorities is fluids, including further refining current flow metering capabilities including a single-phase or wet gas meter. Partnering with other flow metering companies is also on the cards.
More: “Bear in mind we’re primarily in the well-test market here. What we’re trying to do is make it more intelligent in terms of instrumentation and the data gathering. We’re looking at the metering side of it and then how to record that data. We’re looking at wireless transmitter systems so data can be sent direct to desk engineers in the client office. We’re also trying to make the well-testing front-line more efficient, and more accurate.”
In a nutshell, Expro is apparently putting 30% more money into R&D this year than in the past. In terms of cash, that’s $13.5million. And the amount of money going into new well-test kit is much higher too.
However, despite spending more than ever before on the future, can Expro sustain enough R&D to stay ahead in the market?
Yes, according to More.
But, for the time being at least, AX-S is not factored into the future.
“There is nowhere next for AX-S at this moment in time,” he added. “It’s a case of wait and see. It’s in storage.”
When AX-S was hived off into its own company and then put into receivership, the intellectual property that lies behind it was placed elsewhere within the group.
Indeed Energy has been advised that AX-S is useless without its intellectual property.
Our source said: “They may say that the market wasn’t ready/interested but they cancelled contracts.
“The truth is that with all breakthrough technology you must be prepared to sponsor the project both technically and commercially.
“Management changes were not helpful as AX-S lost ownership and this is everything. The greatest bit of evidence to all this is that Expro bought the technology out of receivership and mothballed it!”
Moving on, did Expro in fact take too long in developing AX-S and that that was the real problem?
It seems not as when an attempt was made to take it to market, many subsea developments hadn’t progressed perhaps as quickly as had been anticipated.
AS-X aside, does More think that Expro’s technology stable is in good shape, or indeed the R&D programme?
“I’d say we’re in very good shape,” he replied. “There is a strong appetite for investment and not just organic. We’re also interested in acquiring new technologies.
“Even at board level there’s a now lot more interest in technology. We’ve established a technology board and that’s going to be chaired by Sir George Buckley.
“When we were a plc we did have a board-technology council. But since then this is the first time that we’ve had such a grouping to enable us to drive forward key emerging technologies and commercialise them.”
Is this technology board a way of Expro standing up to its owners?
“It’s a way of engaging them early in discussions; getting buy-in to the idea of new technologies,” insisted More. “We’ve been having very positive discussions with them.”
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