Difficult Concept of Transfer of Technology in Oil and Gas Industry

Though people in the oil and gas industry always talk about the transfer of the technology particularly when entering into the upstream projects, but neither it is easy for NOCs to understand what exactly they are looking for , nor IOCs will be able or will be volunteers to transfer the requested technology to NOCs, particular the propriatory and IP based technology. Thus the following issues should be well considered when we talk about the Transfer of Technoloy in the petroleum industry contracts:

First, it is true that T&T elements will be more complex for both IOCs and HGs/NOCs in certain fields and reservoirs, such as Green Field/Virgin Area; more complex and uncertain fields; 2nd and 3rd generation of reservoir; deep water oil and gas reservoirs; depleted field that requires EOR/IOR; HP reservoirs and etc. Accordingly, technical complexities and uncertainties in the above types of the petroleum fields and reserves will require more technologies and know-how oriented projects plans in order to be safely, soundly and properly managed during the petroleum operations of the fields.

Secondly, as more HGs/NOCs are aware about such high complexities and great uncertainties, and as more infrastructures are available in the HG/s/NOCs countries to tackle such complexities and uncertainties, more balance of negotiation and bargaining power are expected to be established between IOCs from one side and HGs/NOCs from the other side. However, where HGs/NOCs countries suffer under-developing or non-developing status in the petroleum industry, more imbalance, unfair, and unjust bargaining may occur when IOCs enter into deals with HGs/ NOCs. Therefore, T&T issues of concern would be differently interpreted and exercised between those main players in the petroleum industry, the nature of which should be individually investigated and properly decided.

Third, when dealing with the T&T issues in the upstream petroleum projects, one should not ignore the basic fact that costs and expenses would be higher when the second T is required along side with first T of the projects. Thus, more costs and expenses should be incurred and paid, and more time should be spent in order to accomplish the requirements of the concerned technologies in those upstream projects.

Forth, both F&F (Fiscal & Financial elements) of the upstream petroleum contracts should also be the main concerns of both IOCs from one hand and HGs/NOCs on the other hand when dealing with those complexities and uncertainties in the T&T elements of the projects, whether in the offshore and/or onshore fields, green and/or brown fields, deep water and/or shallow water. Thus, I do agree that both F&F should be flexible enough to take into account the T&T requirements of the upstream projects within the context of those complexities and uncertainties.

Fifth, the dynamic and smart relationship between IOCs and HGs/NOCs should be established in order to tackle those complexities and uncertainties both in the frameworks of the projects (as part of the “Project Management” exercise) and types of the upstream contracts (as part of the “Contract Management” exercise). Accordingly, the TEFCEL model should be utilized to cover not only those T&T and F&F elements of the upstream projects and contracts, but also to study and include other TEFCEL elements that should be comprehensively and integretedly be taken into accounts when dealing with those complexities and uncertainties in the upstream petroleum projects.