BP 2008 Annual Report Download - page 41

BP Annual Report and Accounts 2008
Performance review
Research and technology
Research and technology (R&T) has a critical role to play in addressing the
world’s energy challenges, from fundamental research through to wide-
scale deployment. The full breadth of these R&T activities is carried out
by each of the business segments. We also conduct long-term research
within the central R&T group.
Inside the segments, research and technology activities are
in service of competitive business performance and new business
development, through the research, development or acquisition of new
technologies. The central R&T group provides leadership for scientific and
technological activities throughout the group and, in particular, provides
input to the group’s long-term strategy. It ensures that the right capability
is in place in critical areas and ensures the quality of BP’s major
technology programmes. It also illuminates the potential of emerging
technologies and conducts research and development (R&D) in support
of BP’s long-term corporate renewal. In addition, a group of eminent
industrialists and academics forms the Technology Advisory Council,
which advises the board and executive management on the state of
research and technology within the group and helps to identify current
trends and future developments in technology.
Research and development (R&D) is carried out using a balance of
internal and external resources. Involving third parties in the various steps
of technology development and application enables a wider range of
ideas and technologies to be considered and implemented, improving
the impact of research and development activities.
Across the group, expenditure on R&D for 2008 was $595 million,
compared with $566 million in 2007 and $395 million in 2006. See
Financial statements note 15 on page 132. The 5% increase in 2008
compared with 2007 reflects increased investment in biosciences,
conversion and carbon capture and storage technologies.
Beyond R&D, we also invest in technologies to get them to the
point of commercial readiness: this includes field trials, support for
technology deployment, specialist technical services and central
investment in functional excellence and capability development have
deepened our current areas of technology leadership.
In our Exploration and Production segment, we have organized
leading technologies under 10 flagship programmes, each with the
potential to add more than 1 billion boe to reserves through their
development and deployment in our assets worldwide. These
technologies contributed to exploration and production success in
Algeria, Angola, Azerbaijan, Egypt, the North Sea and the Gulf of Mexico
deepwater. Our advanced seismic imaging expertise, which is one of
these programmes, continues to lead the industry, pioneering new wide-
azimuth seismic acquisition and processing in deepwater Angola, Egypt
and the Gulf of Mexico. In addition, BP has developed new technologies
that have significantly reduced the time needed for land seismic
acquisition in Oman, and these are now being deployed in Libya. Our
enhanced oil recovery technologies are pushing recovery factors to new
limits. For example, recovery factors have already increased from 40%
to 60% in Alaska, where BP operates the world’s largest miscible gas
enhanced oil recovery project. BP also leads the industry in the
application of new inter-well polymer treatments aimed at improving
waterflood recovery, with more than 25 treatments delivering an increase
of around five million barrels. Also in Alaska, BP’s first hexalateral well
came online in 2008 in the Orion field, which is capable of producing
9,500 barrels of oil per day – the largest producer in BP’s operations on
the North Slope; while our first well using cold heavy oil production with
sand (CHOPS) technology began producing heavy oil at a production rate
of 100 barrels of oil per day. Unconventional gas is another area of focus;
for example, using new technologies, BP has drilled in 17 unconventional
coalbed methane basins around the world, including some of the largest
reservoirs in North America. Another flagship programme is our use of
digital technologies to optimize production and improve recovery, where
BP has established an industry-leading position. In 2008, BP’s oil and gas
operations, enabled by real-time data and Field-of-the-Future®
technologies delivered an extra 30,000 to 50,000 boepd gross production.
Also in 2008, as part of its Inherently Reliable Facilities flagship, BP
completed a field trial of a new fibre-optic system that represents a step-
change in onshore pipeline monitoring, and which will now be deployed
in Azerbaijan, Canada and Scotland.
In our Refining and Marketing segment, technology
advancements are enabling our refineries to understand and process
feedstocks of varying quality and optimize our assets in real time,
enhancing the flexibility and reliability of our refineries and, in turn,
improving the margins of our existing asset base. In 2008, BP began
upgrading its Whiting refinery in Indiana to process heavy crude oil from
Canada using one of the industry’s most technologically advanced coking
operations. In Naperville, US, we opened a new refining R&D centre,
installing more than 50 new pilot units at the forefront of experimental
technology and modelling. We have installed predictive analytics
technology for fault detection and prediction on critical machinery across
seven of our refineries reducing losses from machinery failure. BP’s
leading technologies in fuels and lubricants mean that it can keep ahead
of increasingly stringent regulations, balancing greater fuel efficiency and
performance and developing superior formulations across its entire
product slate. For example, our BP Ultimate fuels deliver performance
benefits such as improved fuel economy, lower emissions and a cleaner
engine; and we have launched Greendeck and Greenfield, a suite of high-
performance and environmentally friendly marine and offshore lubricants.
Our proprietary processing technologies and operational experience
continue to reduce the manufacturing costs and environmental impact of
our petrochemicals plants, helping to maintain competitive advantage.
For example, our new 900ktepa purified terephthalic acid (PTA) plant in
Zhuhai, China was officially opened in 2008, occupying a plot just half the
size of its older, neighbouring plant, but with double the production
capacity. In the field of conversion technology, our Nikiski Fischer-Tropsch
demonstration plant in Alaska operated at levels to prove that we have a
working catalyst at industrial scale.
In Alternative Energy, our low-carbon research and technology
activity continues apace. In 2008, we filed patents covering biofuels,
carbon capture and storage (CCS), and hydrogen membranes. Our solar
business produced the first prototype of a cut-cell high voltage module,
giving a 5% increase in power over conventional modules. Working as
part of the UK’s Energy Technologies Institute – a public/private
partnership to accelerate low-carbon technology development – BP is
proceeding with investments in projects to develop new offshore wind
and marine turbines. We also published results of the satellite monitoring
programme, verified by well and tracer detection, of the CCS project at
the In Salah gas field in Algeria with our partners Sonatrach.
Collaboration plays an important role across the breadth of BP’s
research and development activities, but particularly in those areas that
benefit from fundamental scientific research. BP has 11 significant long-
term research programmes with major universities and research
institutions around the world, exploring areas from energy bioscience and
conversion technology to carbon mitigation and nanotechnology in solar
power. In 2008, our Energy Biosciences Institute at Berkeley (see
page 38) became fully operational, with 49 research projects, all focused
on lignocellulosic biofuel production; we announced the renewal of our
Carbon Mitigation Initiative at Princeton; and signed the joint venture
agreement for the Clean Energy Commercialisation Centre with the
Chinese Academy of Sciences.
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