GTL: Perspectives of an Oil Company as a Technology Developer
Authors: Grimmer Paul 
Published: October 2008

Abstract
Conoco has been developing Gas-To-Liquids technologies since early 1997 and has a perspective shared by few companies as both an integrated oil company and a GTL technology developer. This presentation will address the challenges producers face in commercializing "stranded gas", offering a different erspective fkomthe enthusiastic views espoused by many in the last 3 years. GTL potential is enormous but so are the remaining hurdles to commercialization.

Introduction
Within the past three years, Gas-To-Liquids has risen from a position of being a mostly-forgotten remnant of the late '70's synthetic fiels movement to a position of being accepted by many as a set of technologies ready for use now to unleash the vast amounts of stranded gas worldwide. This build-up of expectations has occurred in a time when no new plants have been built and none have even been announced. Clearly some of this has been from self-promotion by a variety of parties: technology developers looking for funding, conference and newsletter publishers looking for clients, etc. But there is much more to this than that. There is a tremendous amount of interest from oil companies who want to access the new technologies for their own stranded gas reserves, engineering companies and fabricators who sense a new and potentially very large business opportunities, governments interested in clean fuels, etc.
Is this interest warranted? The quick answer is that if the technologies can be brought to bear in an economical fashion, GTL can be one of the most significant set of technologies every employed in the energy business. Approximately 500 billion barrels of oil equivalent of "stranded" gas is already discovered and is likely to remain stranded until something like GTL is used to get the gas to market. In addition, in a world that is increasingly environmentally-conscious, the ability to produce distillates with no sulfur, aromatics, etc. is quite enticing.
But this doesn't fully explain the frenzy which has surrounded GTL. We must also consider how technology has progressed in our industry, especially from an Upstream perspective.

Technology Development & Oil Companies
Within the past decade, oil companies have accelerated the trend to being technology users instead of developers. R&D staffs have been severely reduced. Staff at most companies are now geared towards operations support rather than new technology development. Corporate emphasis is has become decidedly more short-term focused. In short, most oil companies have lost most of the desire and ability to develop new technology.
Part of the problem is that we have an extremely fractured industry. Saudi Aramco is the only company in the world that has an Upstream market share over 5%. As long as the vision of application of in-house developed technology is that it will be applied to each company's portfolio, costs and risk of failure inherent in R&D programs will continue to force companies to defer technology development to engineering and service companies who can spread cost recovery over the entire industry.
Over time, this approach leads to an environment where the various oil companies have little differentiation. As long as there are enough projects and operations to go around this is not a problem. However, when the competitive landscape changes this can (and does) cause tremendous problems.