Abstract.

Managing R&D programs in the oil and gas industry faces new challenges in today's competitive business environment. It is has become popular in some quarters to view technology as a commodity that can be purchased on demand. From this perspective, there is no need to assume the risk and the cost of R&D.

Others still view R&D as a means that can lead to opportunities for growth and as an important element in maintaining superior competitive performance. These companies are still willing to continue investing in R&D, but must work harder than ever at managing these investments. The deployment of resources must be more selective than in the past. Projects must be managed as components of an investment portfolio, differentiated by the business activities they support, and ranked by their relative value/cost and business alignment. This process demands active dialogue between R&D organizations and their business partners. There is also a trend to seek and source more technology externally. Decisions to source externally must be made in a strategically informed manner. With more external sourcing, R&D management has to rethink the required internal skill mix. The ability to innovate and develop must be complemented by the ability to source, integrate, and apply externallysourced technologies internally. This paper is intended to identify some major, common issues and to discuss our experiences in addressing them.

INTRODUCTION

Managing research and development (R&D) in the oil and gas production industry faces new challenges in today's competitive business environment. In a 1993 roundtable discussion on ‘Future Visions of Research and Technology’, sponsored by the Society of Petroleum Engineers (SPE), many important issues and areas of concern were identified'. Among them, some were more traditional, such as technology transfer, long-term or strategic research, and advances in seismic research. Others, however, were more indicative of the trend of the 1990s such as partnering in research, valuing R&D programs, and achieving breakthroughs using technology from other industries. Indeed, when SPE held its second roundtable in 1995, the discussion was more focused on the latter set of issues'. While many good ideas were offered then, we begin to see published examples of how to implement these ideas now3v4. As Roussal et al5 pointed out, there is no single ‘best’ way to superior R&D. Every company, with its unique business environment, is unique and in a state of its own unique continuous change. The purpose of this paper is to share our lessons learned in addressing some current issues of common interests to stimulate discussions. We have purposely left out many traditional R&D challenges such as gating,

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