Watching the World R&D crunch awaits European refiners

With David Knott from London [email protected] In those films where an archvillain plans to take over the world, there is usually a moment when he sees a critical flaw in the plan and realizes the hero has found it. Such a realization-albeit with regard to a very unvillainous plan-came to Geoff Parker, manager of FCC/residue upgrading at BP Oil Ltd., at the European Refining Technology Conference in London (OGJ, Nov. 4, p. 35).

Nov. 11, 1996

3 min read

In those films where an archvillain plans to take over the world, there is usually a moment when he sees a critical flaw in the plan and realizes the hero has found it.

Such a realization-albeit with regard to a very unvillainous plan-came to Geoff Parker, manager of FCC/residue upgrading at BP Oil Ltd., at the European Refining Technology Conference in London (OGJ, Nov. 4, p. 35).

When the realization came, Parker was telling delegates how BP had upgraded more than 80% of its worldwide fluid catalytic cracking capacity and how technology is key to competitiveness.

"Refineries will be striving to be more competitive," said Parker, "and will look to FCC technology to help achieve a good competitive position. Technology will be more widely available than in the past, with the tendency for majors to reduce their R&D activity, leaving licensors to provide a larger portion of the development work, which they will need to fund by achieving wide application of new technology."

Culture gap

Then, in departing from his script, Parker noted that the previous speaker, Frans Plantenga, marketing manager of Akzo Nobel Catalysts BV, had said technology developers are finding it increasingly hard to fund R&D: "So now nobody wants to do the development work."

Parker then returned to his prepared paper, leaving open the question of how the refining industry can make progress if nobody wants to fund R&D. Back at the office, I got on the telephone in search of an answer.

Mario Camarsa, executive director of European Petroleum Industry Association (Europia), Brussels, said refiners cannot cope with individual development of today's complex processes, yet cannot work together.

"Nowadays," said Camarsa, "technology changes require extensive R&D, pilot plants, hundreds of people; we are talking tens or hundreds of millions of dollars.

"But despite low spending on R&D, refining industry's belief is still that the process can give competitive advantage. There is a cultural gap to fill before industry can get together."

Way forward

Tony Miles, development manager of FCC catalysts at Akzo Nobel, was coauthor of the paper presented before Parker's.

Miles said the only way around the R&D dilemma is collaboration, between refiners and their suppliers and between refiners.

"The trend towards collaborative working practices," said Miles, "as opposed to traditional refiner-supplier relationships, is the key. We encourage customers to work with us."

Large and small refiners can benefit from collaboration, said Miles. At one end of the scale can be win/win relationships to improve negotiated performance; at the other end, small refiners can improve profits by having specialists monitor and optimize their plants.

While large refiners may be reluctant to share their secrets with competitors, Miles said there is growing evidence of small refiners working together: "Only the other day we became involved in a relationship where companies are pooling resources to give more benefits per buck."