UPSTREAM OIL AND GAS AND THE FUTURE OF R&D

Upstream research and development (R&D) spending by many international oil companies has decreased significantly over the past two decades. There is also a perception, at least in some quarters, that technology adoption in the upstream is slow relative to that in other industries and that end users are reluctant to pay for the R&D required for new technology. At the CERA 2005 Global Oil Summit The Future E&P Challenge: Growth and Innovation, senior executives from across the industry gathered to discuss these and other issues regarding the status of R&D and innovation in the upstream industry. Observations from the summit include

- There is a lack of consensus that there is a problem. Operators generally believe the innovation environment is healthy, while the service and venture capitalist sectors generally believe there are serious problems.
- Operator R&D will continue its shift toward improving nonconventional resources, such as heavy oil, gas-to-liquids, deepwater oil, etc.
- Structural factors likely will continue to deemphasize basic and applied research at the expense of shorter-term developmental research.

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CERA Reports Online, a wholly owned subsidiary of IHS Energy, is a leading advisor to international energy companies, governments, financial institutions, and technology providers. CERA delivers critical knowledge and independent analysis on energy markets, geopolitics, industry trends, and strategy. CERA's expertise covers all major energy sectors--oil and refined products, natural gas, and electric power--on a global and regional basis.