RESEARCH & DEVELOPMENT

Repsol YPF considers that investment in technology is essential to successfully compete on any market, be it in the short term by improving current processes and products, or in the long term, by developing exploring and applying technological innovation, and being on the alert for new technologies.

More than 11.5 billion pesetas were invested by Repsol YPF on research and development activities during 1999, employing a manpower of 500.

In line with our long term commitment to develop product and process technology, work began last year to construct a new Technology Centre, to be sited in the proximity of the King Juan Carlos University, in Mostoles (Madrid). This is an ambitious project which will allow us to centralise all our activities in research and development, and many of our technical services in-house and for external customers. The new Centre, which involves an investment of 11 billion pesetas, will be in use by 2001.

In the downstream area, the company’s pro-active attitude in seeking new technology has led to the use of cutting edge technology in such products as propylene oxide and hydrogenated rubber. Propylene oxide is a high value added product, with stable and high profit margins. It is manufactured using a technology available only to Repsol YPF and two other companies in the world. A new propylene oxide plant, with a capacity of 150,000 tonnes per year, is currently starting up in Tarragona, and will complete the vertical integration of this area. This venture involves the highest industrial investment (80 billion pesetas) ever made in Spain, using technology developed by a Spanish company.

Another example of innovation is the production of hydrogenated rubber, industrially manufactured at our facilities in Santander, based on the development of exclusive technology. This development has positioned Repsol YPF as one of the few companies able to produce this high value added and strong growth derivative.

Apart from these achievements with a high content of new technology, great efforts are also being made to up-grade current processes and products, with a view to improving performance for customers, optimising costs and reducing environmental impact.

To this end, the company’s expert know-how in catalysis and catalysts, advanced control, simulation and modelisation processes is applied and orientated towards a constant improvement in costs, operating efficiency and product quality.

The new types of automotive gasoline, racing fuel, or high resistance asphalt, together with new grades of polymers, such as agricultural sheeting and rubber, are just a few examples of new or upgraded products manufactured to achieve higher quality or specifications.

In the area of lubricating oils, Repsol YPF is adapting its products to new engine technologies as they appear on the market, thus keeping one step ahead of future technological demands.

Research, technological development and engineering activities, when applied to the exploration and production area, mainly focus on applying new technologies to reduce exploration risk and extend improved petroleum recovery techniques, whilst improving operating costs, and lowering environmental impact. Optimum use is made of modelisation and simulation technologies to improve the success rate in exploration and make the necessary developments to increase petroleum recovery, particularly in the case of heavy oils. New materials and non-corrosive covering produced with in-house technology are also used to the full to reduce operating costs in the production area.

A considerable amount of technological research is conducted in collaboration with outside companies, universities and public and private research centres in Europe, the USA and Argentina. In 1999, the Repsol YPF Group was party to more than 135 such co-operation agreements. Within Repsol YPF, there is a small group of technology experts, called "Product Champions", responsible for setting up these relationships and conducting an efficient technological surveillance. These report directly to the Corporate Director for Engineering and Technology, and mainly address the optimisation of Exploration and Production technology, where the very nature of operations has limited in-house R&D activities.