New technology can cut life-cycle costs for oil and gas production by about 30pc by 2050
But even with potentially lower upstream costs, about $600bn/yr of upstream investments are required to satisfy projected demand, the firm said today in its Technology Outlook. BP said the report "uses modelling and analysis to provide insights into what technology advances could deliver, other factors aside".
Investment to improve energy efficiency has "the potential to save around 40pc of current primary energy use", according to BP.
Digital technology, such as big data, artificial intelligence and sensors, is "the most significant source of system-wide efficiency improvement", according to the report. In the upstream, "the types of resource with the greatest scope for cost reduction are the most capital intensive, such as deep- and ultra-deep water, and those requiring large numbers of wells — such as unconventional resources including tight and shale oil", BP said.
"Digitisation is projected to underpin 25pc of the increased volumes and one-third of the cost reductions associated with technology improvements, with the greatest impacts potentially coming from artificial intelligence," it said. Oil refineries are routinely expected to use remote-controlled maintenance, real-time process optimisation and autonomous inspections by the mid-2020s, BP said.
"With such technologies, refinery maintenance can increasingly become preventative rather than reactive, minimising downtime and maximizing productivity. The prize is significant, given that a 1pc increase in mechanical availability has been estimated to result in greater safety and a 10pc reduction in maintenance costs."
BP expects all forms of renewable energy to compete with fossil fuels for new power generation needs by as early as 2020, and said this "now underpins a compelling business case for renewable energy".
The company sees onshore wind power becoming "the most economical source of electricity" by 2050 and "grid-scale solar power also becoming much more competitive". But it highlights integration costs needed to overcome intermittency issues when wind and solar power start meeting a high proportion of grid demand.