Beyond the boundary

Conventional fuels will continue to supply the lion's share of the world's energy needs for decades to come. But these resources are becoming harder to find and develop, forcing producers into ever deeper waters and more hostile environments. Continuous technological progress is essential to allow them to enter these new environments.

Technology is also enabling them to produce more from what they have already discovered, leading to significant improvements in recovery rates from existing oil reservoirs.

For example, the history of

Prudhoe Bay operation over a period of 30 years, advances in the application of horizontal drilling, coiled tubing drilling, miscible gas injection and other technologies have driven the original estimate of 40 per cent oil recovery up to 60 per cent. And that output will continue to increase in the future.

New deep reservoir investigation techniques will increasingly give BP the ability to track oil, gas and water underground. Oil fields will one day become a digital virtual reality, allowing it to evaluate far more accurately where oil is left in the reservoir and how to extract it.

The company is increasingly using land seismic technologies to find the best well locations to unlock tight gas in the US, North Africa and the Middle East, drilling and completing ever more complex and sophisticated wells, while working to minimise its environmental footprint.

All these and many more technological advances will enable it to carry on extracting oil and gas for many years to come, working existing reserves harder and accessing new resources, including significant reserves that are yet to be discovered.

But while fossil fuels will continue to dominate the market for the foreseeable future, alternative energy technologies are becoming increasingly important.

There are three main thrusts: renewable energy, in the form of wind, solar and bio products; conversion technologies that allow the transformation of multiple, low-cost feedstocks, such as coal and petcoke, into a variety of energy products; and carbon sequestration, particularly in the subsurface, which allows for the decarbonisation of carbon intensive fossil fuels.

BP has announced a collaboration with

and

to build a world-scale bio-ethanol plant and a new bio-butanol demonstration plant in Hull in the UK.

In the US it is collaborating with

of California to develop new feedstocks for the emerging bioenergy market.

BP Solar is focusing on a new silicon growth process technology, Mono2, that significantly increases cell efficiency over traditional multi-crystalline-based solar cells.

And it is working with

to explore a new way of producing solar cells, based on the growth of silicon on 'nanorods' as a way of making solar electricity more efficient.

With projects like these, it is expanding operations and diversifying into activities that take it well beyond its conventional base. They pose many new challenges, not just in the technologies themselves but also in developing new relationships with partners and disciplines that it has not traditionally embraced.

BP has set up a joint enterprise with the international mining group

and a technology alliance with

to develop decarbonised power projects around the world. It is focusing initially on hydrogen-fuelled power generation, using carbon capture and storage technology to produce new large-scale supplies of almost carbon-free electricity from traditional fossil fuels.

These large and complex projects are bringing together three distinct sectors: the chemical industry — to turn high-carbon, low-cost feedstocks into CO

and hydrogen; the power industry — to convert the hydrogen into electricity and deliver it into the grid; and the upstream industry — to sequester the CO

in the subsurface.

And all of this must be done in partnership with government to create the appropriate regulatory environment, and with the public to create confidence in the safety and security of these technologies for widespread application.

These types of future projects will require BP to attain higher levels of collaboration and co-operation than anything it has experienced before.

For example, BP's Thunderhorse project in the Gulf of Mexico is the largest drilling and production semi-submersible ever built, tapping into a reservoir lying some 6,000m (nearly 20,000ft) beneath mud, rock and salt, topped by 1,900m of ocean. It has pressures over 1200 bar and temperatures of 135ºC.

Everything about this project is pushing the limits of the industry's experience. It has been challenging and probably the toughest project of its type it has ever undertaken. It will open up a new province for BP but it illustrates how the challenges are getting tougher and the risks are getting bigger.

Then there is the complexity involved in developing new unproven technologies, with high levels of research and development investment and no guarantee of a usable product at the end of it.

This requires it to construct new and complex chains that need high levels of collaboration and will force it to expand the boundaries of its knowledge and capabilities.