R & D Cooperation in Exploration and Production
Authors: Bosio Jacques 
Published: December 2007

We live in a world where oil and gas companies are trying to become more competitive by downsizing, reorganizing, and, of course, applying new and more efficient technology. This means that R&D is more important to our business than ever, at a time when we are faced with more difficult working conditions:

– deeper waters offshore – smaller fields – deeper reservoirs – high pressures/high temperatures – environmental constraints – etc.

How can we tackle these problems with less money and fewer people?

A good research program should have 5% to 10% of long-term "blue sky" research for preparing the "breakthrough" techniques of tomorrow; 30% to 40% of medium-term research; and the rest in short-term, immediately applicable research - not only the short-term research that most companies do nowadays.

An obvious way to keep our industry in good technical health is to do in common what we can no longer do separately - even though every company will certainly decide to keep for itself a few core competencies to strengthen its identity and promote its image.

Most of the tools we use are not proprietary. We use the same seismic acquisition tools, the same pipes, the same bits, the same pumps, the same computers. Some seismic interpretation tools are proprietary, but not much else is. What, then, really distinguishes between one company and another? Ownership of technology does not in itself create competitive advantage. Advantage comes from the use we make of technology, hence from the quality of our engineers and technical staff. So we can, in most cases, develop in common the tools of tomorrow while remaining in healthy competition.

Besides, a company is rarely alone on a permit any more. We entrust one of us to find, develop, and operate a field, and we share the risks and the profits (or loss) . . . but not the R&D tools to do it!

There is a certain lack of logic in that: our industry is remarkably well organized to get together, exchange information, and explain what we do at big meetings (the Offshore Technology Conference, the SPE European Petroleum Conference, Offshore Northern Seas, and many other meetings). But we stop there. We need to go one step beyond and actually work together in R&D.

Let us forget the "not invented here" complex!

Let us not hide behind the antitrust laws to do nothing. There is no such thing as a trust when the results are shared. Our goal should be to have the best tools available anywhere, anytime we need them - and most of the time in the hands of service companies, whose job it is to provide service.

This would save money, brain capacity, and time while increasing our efficiency. But it is not easy to do.

We face differences in language and in culture ["How can you trust a Frenchman?" (but for us it is "How can you trust an American, or a Norwegian"!)]. The tendency is to always think that an arrangement is going to be more profitable for the other company.

As with everything, some initial investment is required before a benefit can be obtained. Do not expect fast results. It takes time to get acquainted, to learn to communicate, and to learn to trust the other party. There is what can be called a flirting period.

Remember that small is beautiful; do not try to do too much together at the beginning. Start with one partner, then think of another one later (it is challenging enough to begin joint research if two companies are involved, very uneasy with three or more!). Find one research project of common interest and learn how to do it jointly.

Do not forget that nothing can start without top-management consensus and support. Joint research is a business that goes from the top down because the company's identity is concerned and managers are very touchy on that point. So not organize preliminary meetings between researchers to prepare a possible cooperation and then ask for agreement to do it. Most of the time this approach falls because management wants to be informed ahead of time. Get the boss' agreement first. At least, this is our experience at Elf Aquitaine.

Try to marry strengths, not weaknesses. Work together on subjects you are good at, not the reverse.

Of course, a good legal frame is necessary, but it is usually easy to reach that point when a good technical motivation exists. Because it is essential not to do a joint project to save money only, a project of strong common interest is necessary. The companies involved should complement each other, and the exchange should be balanced. Neither should be left with the feeling that the other has a better deal.

And finally, be consistent. Once a decision to cooperate has been made, give it the means - money and manpower - to be implemented until the results you are looking for are obtained. If you don't, all the preliminary investment made in getting acquainted, finding the subjects, preparing the legal agreement, and organizing the technical program is lost.

P. 1026