LUX Assure helps the oil and gas industry manage its chemicals in a cost-effective manner, as chief executive Emma Perfect explains to BQ’s Chris Middleton.
When it comes to the oil and gas industry, protecting your intellectual property (IP) is a top priority for any firm. In an everchanging sector, only businesses that can innovate, develop, and protect their own products can survive.
This is something known all too well by LUX Assure’s chief executive, Emma Perfect, who has been an integral part of the company since 2003. After completing her doctorate in molecular biology at the University of Oxford, she joined LUX and has worked her way up through the technical side of the company over the past 15 years. Now, the biologist-by-training runs a team of chemists to deliver innovative oilfield chemical solutions to the oil and gas industry.
“We develop on-site chemical detection products for the oilfield industry,” Perfect explains, “and they’re relevant because the industry uses a lot of chemicals to get oil out of the ground. “It has to manage those chemicals – partly to make them cost effective – but also to use the right amount so they don’t cause problems with their systems.
“What we’ve done as a company is we have taken the concepts used in point-of-care testing in the medical and life sciences sectors – whereby you can detect things rapidly at the point of taking a sample – and apply it to the oil industry.
“So a company will take a sample from their pipe, mix it with our detection agent and get an optical change – we use optical signatures in our products because they tend to allow for rapid and quantitive results and that’s why we are called LUX, Latin for light - and that tells them how much of a particular chemical they have in a system.
“With that information they can decide whether they need to change it – to put more in or put less in – it just helps them make better informed decisions more quickly.”
With its headquarters in Edinburgh, LUX is able to serve a worldwide customer base with agents in the Middle East, the Americas, Malaysia and Australia. In 2013 the company changed its name from LUX Innovate to LUX Assure after securing £3.25m worth of funding to transform the company from one purely focused on research and development (R&D) into a service provider for the oil and gas industry.
Following this change, LUX Assure’s two flagship products, CoMic and Ommica formed the foundation as the company looked to move forward and expand its reach across the global oil and gas sector.
CoMic is used to deliver improved corrosion inhibitor management, allowing firms to optimise the chemicals they are using to protect their oil and gas pipes from becoming corroded.
Perfect explains: “The industry uses a lot of these chemicals, but they don’t have a good way of determining if they’ve got the right amount of chemical in there.
“CoMic is different to everything on the market because it looks at micellar aggregates of corrosion inhibitors to determine whether the company is using too much or too little of its corrosion inhibiting chemical.”
Ommica offers a simple, on-site colourimetric test kit, which is used to determine the levels of mono-ethylene glycol (MEG) and methanol concentrations in oil and water.
“MEG and methanol are used to prevent the build-up of hydrates, which can block pipes,” said Perfect. “This is important for the industry because mono-ethylene glycol and methanol can be considered contaminants in oil and operators can be penalised financially for their presence. Companies want to test for the levels of these chemicals so they know what’s in there. Allowing them to maximise the value of their oil.”
Both products are making sales and securing repeat orders around the world, and LUX continues to target a worldwide audience. But the business is relatively small – with just over a dozen members of staff – and this poses a challenge when dealing with a global sector, not just in terms of logistics, but in terms of how to scale effectively and tackle the nature of the industry itself.
“We have a global reach. The chemicals we are detecting are used from Alaska all the way to Australia – they’re used everywhere, they have relevance everywhere – and as a company we spend a lot of time trying to service a very global industry,” Perfect continues. “For us as a business, we are a small fish in a very big pond, so our biggest challenges are dealing with a global business.
“The world is a big place and diverse in terms of culture and business practice and we only have a small team. Our biggest challenge is how we effectively sell a product on the scale we want to from a relatively small UK base. This is particularly challenging as our products are quite innovative – they are a different way of doing things.
“The oil industry is a traditional and conservative place. Thereare early adopters, and there is some recognition of the value that innovation can bring, but, on the whole, to get the reach that we want in a conservative industry takes a lot of effort to explain why innovation is useful.”
Innovation is the key word here and, for a company that relies so heavily on its own scientific developments, protecting this innovationis of paramount importance. LUX has different subsets of IP including global patents – both in application and granted – as well as trademarks to protect all of the firm’s key products and closely held trade secrets which protect its processes and methods.
“Essentially, IP is our business, it’s the core of our business. We sell novel products, to disrupt the industry’s traditional approach, so protecting that IP is of the utmost importance to us. We spend a lot of time not just looking at how we protect our IP, but how we keep things confidential and get non-disclosure agreements signed, which can be challenging. We have also gathered information and knowledge, which can be considered trade secrets, that we obtain from having used our products across a wide range of oil and gas assets.”
Developing innovative products can be a time-consuming and costly endeavour for any business, so ensuring that as much of it is protected as possible is a constant uphill battle. It is for this reason that LUX ensures that all its staff are fully training in IP, its implications, and why it is important for the business.
“IP is so important because all of our products are underpinned by it and I would say that, in particular parts of the world – like the Middle East – we find that having patents demonstrates to prospective clients our uniqueness and opens doors,” Perfect continues. “It makes a huge difference and it’s also an important part of our marketing – that we are different and innovative.
“Our trade secrets, especially around our software algorithms, are also really important. That’s the primary way we keep our IP for ourselves, to keep it confidential within the company. That’s never shared with any outside party, no matter where we are in the world.
“We’ve conducted research on many prospective products; we now have two on the market and one to follow soon. We’ve had many projects fall by the wayside that didn’t work technically or were we thought there would be issues with it commercially.
“So it’s a bit like a bush, some things go all the way through to the sky, some things stop nearer the soil. But the process is similar for all of them. You need to look at the market, what’s there, what can be done, what the opportunities are and how to do it.
“I think people underestimate some of the commercial challenges and we certainly as a company should have done a bit more to consider this. It’s not just about technology development, it’s about product development, and how you get it on the market. It’s quite easy sometimes to forget that.”
LUX’s latest product, known as TraxBio, monitors the effects of surfactant biocides, which are chemicals used to kill or control harmful organisms in oil production systems. This is important for the industry as a build-up of organisms in a system can, if left untreated, lead to corrosion. Because of this potential risk, many firms use significant quantities of biocides on a regular basis, costing them considerable amounts of money.
A product that allows a company to test the amount of chemicals they are using – whether they are using more than necessary and wasting money or using less than necessary and potentially allowing the organisms to regrow – will help save it a lot of money.
Perfect explains: “TraxBio is essentially a surfactant biocide mapping tool to map the chemicals as they move through an oil production system. It has been field-trialled successfully, which in oil and gas is a key hurdle. If you can get something through a field trial, working successfully with complicated fluid and on-site infrastructure, then you’ve crossed a huge inflection point in development. But we don’t launch a product until it has been field trialled more than once.
“This year is about doing more field trials and then it will be formally launched. The market does know about it because to access field trials we released information about it, but it’s not a commercialised product as yet.”
Looking forward, Perfect wants her company to go back to its roots and develop new products, rather than focusing primarily on commercialisation, which has been a large part of the company for the past few years.
“It’s our forte,” she admits. “It’s what we’re good at. We spent the last couple of years commercialising our products, CoMic and Ommica, and I would like to get back and do some more R&D and build a new pipeline of products coming through.
“There are lots of chemicals used in the industry and we get asked on a weekly basis if we can test this, or that chemical. At the moment, we don’t do much of that work because we are focusing on commercialising what we have. It would be great to have more time and opportunity to get back and say yes, we have a good idea of how this could be tested.”
As someone who has dealt with IP throughout her career, all the way from the concept stage to development and ultimately commercialisation, Perfect offered her wisdom to other companies that are looking to protect their IP.
“Think about IP in your own industry and plan a strategy accordingly. Go get trained –there’s lots of training out there to find out what it is. If you’re new to it you need to go and learn the basics at least, get yourself a good patent attorney, get advice – but I think it is, to some extent, sector specific and company specific.
“How many patents can you afford to have? How strong do they have to be? The timing of them, what you need to cover, do you need to keep things a secret rather than disclose in a patent? And that is dependent upon the industry and what you are trying to achieve as a company.
“I would also add that it’s useful if you work in a company to find other like-minded people, with an enthusiasm with IP. It’s always good to harbour and grow the interest of those who are enthusiastic because it’s useful to have other proponents and other pairs of eyes when you are creating, reviewing documents and patents and examination reports.”
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