Executive viewpoint

Technology development in the oil industry is widely indebted to efforts led by international oil companies (IOCs). Many national oil companies (NOCs) develop oil fields and create wealth by means of technologies developed by major IOCs around the world. This has brought different technology management approaches to the oil industry. These range from a bottom-up approach in NOCs that defines technologies needed to be purchased or transferred from market leaders and form a technology portfolio, to a proactive approach adopted by IOCs and major technology providers that moves on professional, futurist master plans.

Recent sanctions against the Iranian oil industry have brought limitations to financial and technological cooperation between Iran and the world’s leading technology providers. This, in turn, has caused insufficient foreign investment, and therefore, problems in developing oil and gas reservoirs. This issue becomes more significant upon recognition that:

1. Iran’s major oil and gas fields are more than halfway through their lifespan and an increased recovery factor is only possible through the application of advanced technical knowledge.
2. Iran’s population has doubled since 1979. This has increased the cost of providing primary requirements and social infrastructure. The remaining oil income is not sufficient for investment in domestic fields. Foreign investment is also difficult, due to sanctions.
3. Extensive interconnection between the oil industry and different engineering disciplines and basic sciences requires complex learning models for intra-organizational planning. This is hard to achieve, given the country’s bureaucratic administration.

These concerns have led Iranian oil industry policymakers to study and develop a technology planning system, which could provide quality technology roadmaps and guidelines for the industry’s development plans.

As is common in NOCs, the oil value chain from upstream to downstream is divided into several sections, each managed by a subsidiary company. A multiplicity of companies, together with different levels of decision-making (i.e., technology policy level, enterprise portfolio level and single units of technology), might face any technology planning system, with a lack of horizontal and vertical alignment of decisions. To cope with probable deficiencies, a model with the following major characteristics has been developed, to form the basis for a robust technology planning system.

Technology roadmaps. To develop the planning model, a hybrid approach was adopted, which intertwines both bottoms-up and master plan views, and reinforces the strengths of the two, while minimizing challenges arising from the Iranian industry’s special situation. Taking advantage of a roadmap technique has made it possible to integrate the efforts of policymakers and companies at the same organizational levels (horizontal alignment), and for all to converge toward supporting industry and enterprise objectives at different levels (vertical alignment). In brief, three types of technology roadmaps are developed, as follows:

• At the highest level (i.e., Ministry of Petroleum and CEOs of major companies), a “strategic roadmap” is determined by taking advantage of a master plan approach from top to bottom, to develop the industry’s general technology development policies.
• At the middle level (i.e., research and technology departments of major and subsidiary companies) lay the “roadmaps of macro technological areas with high priority,” for any of the companies.
• At the lowest level (i.e., consulting companies, contractors and technology development centers, which are not necessarily affiliated to the industry) roadmaps of single units of technology are developed, according to the determined policies and priorities at the two previous, higher levels.

Software and hardware aspects. The developed model and the associated technology planning system focus attention on both software and hardware issues. Technology roadmaps at both levels of “strategic” and “priority areas of technology” concentrate mostly on software aspects of the industry, while roadmapping at the units of technology level focuses mostly on hardware aspects.

General scope technologies. While certain general scope technologies, such as nanotechnology and information technology, may not fall in the activity scope of a specific company, special attention is paid to their development requirements via the designed system.

Three roadmap layers. Three different layers of technology roadmaps (i.e., a reference roadmap, a roadmap for priority areas, and a roadmap for each selected unit of technology) have been introduced. They are expected to help the Iranian industry plan for its technology portfolio, and to some extent, overcome the critical absence of major leading technology providers.

Such a planning system, based on a roadmapping methodology, will accelerate achievements in the development of technology for the Iranian oil industry. Simultaneous attention to horizontal and vertical alignment of developed plans increases the chance of success. This is a significant change of approach for the Iranian industry, whose development requires rapid supply of critical technologies.