BP Annual Report and Form 20-F 2011 - Company Reporting

Business reviewExploration and ProductionIn the upstream, our technology investment directly supports businessstrategy by focusing on safety and operational risk management;operational efficiency; increased recovery and reserves; and winningnew access. Our strengths in exploration, deepwater, giant fields andgas are underpinned by flagship technology programmes that conductscientific research in proprietary laboratories and in partnership withworld-class research institutes and universities, to develop industry-leadingtechnologies in imaging, facilities, well design and completions, and fieldrecovery. These technologies are applied in the field, often in combinationwith real-time data acquisition and visualization, to drive risk reduction andexcellence in exploration, developments and production.• We are applying many of the lessons learned from the Deepwater Horizonincident and response throughout our global deepwater operations. Theresponse required rapid innovation of new technologies to cap the well andcontain the spill and – in partnership with industry partners, governmentagencies and leading universities – we have continued to develop anddeploy new equipment and standards. Among many new developments inBP, we have built a global deepwater well cap and tooling package, nowavailable for global deployment. This new capability includes a containmentcap, remote operating vehicle (ROV) intervention system, subseadispersant injection system, subsea debris removal equipment, and othertools.• BP continues to develop and apply innovative exploration technologies.BP has applied two novel seismic acquisition methods developedin-house. Our distance separated simultaneous sources (DS3) andindependent simultaneous sources (ISS ® ) methods were used tocomplete ultra-large, high density land seismic surveys in the MiddleEast and North Africa. BP also has field trials under way to extend theseacquisition methods to the offshore.• Through our Field of the Future ® flagship technology programme, BP hasdeployed a range of digital, sensing and control technologies in itsoperations and is using the data to enhance real-time operating efficiencyand recovery. Field of the Future tools are enabling more effectivemonitoring of production, multiple well components, and wellcharacteristics such as temperature, which help to optimize hydrocarbonproduction. In addition, improved monitoring of facilities is helping toreduce risk, reducing downtime and saving tens of millions of dollars.• In 2011, we successfully completed BP well advisor module field trials inAzerbaijan, a technology designed to aid decision making, enhancesafety, reduce cost and bring wells on line more quickly. Through welladvisor, we can harness real-time drilling data from sensors that seeahead of the drill, enabling us to deploy technologies such as early kickdetection, which allow adjustments that can minimize down time duringthis critical phase of development. Rolling field trials will continuethroughout 2012 to accelerate deployment.• Enhanced oil recovery (EOR) technologies continue to push recoveryfactors to new limits. We believe that by increasing the overall recoveryfactor from our fields by 1%, we could be able to add 2 billion boe to ourestimated ultimate recovery from existing fields. As at the end of 2011,BP, using its Designer Water ® EOR technology, has treated 78 wellswith Bright Water particles (a BP idea) in Alaska, Argentina, Azerbaijan,Pakistan and Russia. These applications have delivered more than 20million barrels of additional gross recoverable volumes at a developmentcost of less than $6 per barrel, and with an 80% success rate: BP haspumped almost 90% of all Bright Water treatments in the industry.Bright Water treatments involve the design and deployment of thissweep-improving component with regular injection water over a periodof several days. These particles are activated deep in the reservoir toform a waterflood sweep improving diversion at a point between theinjection and production wells.• The $7.6 billion Clair Ridge project in the UK North Sea will be the firstoffshore project to use BP’s LoSal ® EOR technology to increase therecovery of oil by modifying the salinity of the water injected into thereservoir. (LoSal EOR is part of BP’s suite of Designer Watertechnologies.) Earlier in 2011, BP and its partners also announced plansfor the $5 billion redevelopment of the Schiehallion and Loyal fields,west of Shetland. The floating production, storage and offloading unit(FPSO) is to be built with full polymer EOR application capability.Refining and MarketingOur Refining and Marketing technology focus is both operational andcustomer facing. In our refineries and petrochemicals assets, we developand apply technology to monitor operational integrity, to optimize productyields as a function of feedstock changes, to ensure quality attainment, andto improve energy efficiency. We also apply our expertise to create qualitybrand fuel and lubricant products for customers in on-road, off-road, air, seaand industrial applications globally.For example:• We continued to expand our integrity monitoring systems, with thedeployment of over 1,000 wireless Permasense sensors in 2011, nowspanning all of our BP-operated refineries worldwide. These wirelesscorrosion sensors are the product of collaborative research anddevelopment between BP and Imperial College London. The sensorsenable frequent, repeatable wall-thickness monitoring and providepreviously unavailable insights into the condition of oil and gas assets.• In fuels and lubricants, our technology focus is on creating sustainable,differentiated and competitive products that enable advances in transportand industry. We continue to support our partners and customers indelivering greater energy efficiency and reduced CO 2emissions in bothestablished and emerging markets. In 2011, BP developed a new rangeof industrial metalworking fluids that are both safer for workers and lessharmful to the environment, a new gear lubricant for maximizing theefficiency of wind turbines, and co-engineered passenger car lubricantsfor optimizing engine fuel efficiency. We are also working on new fuelsand lubricants that deliver improved fuel economy and compatibility withthe latest engine technology and with biofuel components. In 2011, welaunched our latest generation BP Ultimate gasoline and diesel fuels, andBP’s first differentiated-performance heavy duty diesel offer.• In July, we opened a new industrial technology centre in Turin, Italy. Itwill serve customers across Europe and analyse about 30,000 oilsamples a year.• In petrochemicals, our proprietary processing technologies andoperational experience continue to reduce the manufacturing costs andenvironmental impact of our plants, helping to maintain competitiveadvantage in purified terephthalic acid (PTA), paraxylene and acetic acid.A third PTA plant is currently being engineered for Zhuhai, China. With acapacity of 1.25 million tonnes per year it will be the first to employ BP’slatest PTA technology, enabling scale and cost efficiencies whichsignificantly reduce both capital and conversion costs to a lower levelthan any other PTA technology.• In the field of unconventional feedstocks, we collaborate with KBR topromote, market, and license the slurry-bed residue and coal-upgradingVeba combi-cracking (VCC) technology. VCC is a hydrogen-additiontechnology suitable for processing crude oil residuum into high-qualitydistillates or synthetic crude oil in the refining, upstream-field upgradingand coal-to-liquids sectors.Business review: BP in more depthISS ® , Field of the Future ® , Designer Water ® and LoSal ® are all trademarks of BP p.l.c.Bright Water TM is a trademark of Nalco Energy Services LP.BP Annual Report and Form 20-F 2011 75