Some of the biggest names in Canada oil and gas industry have formed a non-profit association to try to reverse a serious decline in research and development spending.

Eric Lloyd, the first president of the Petroleum Technology Alliance Canada (PTAC), said the Canadian oil industry is in danger of falling behind other producing nations unless it begins to focus on new technologies.

The association, which announced Tuesday at the National Petroleum Show, was launched by top industry executives to draw attention to the issue and to spur more collaborative efforts in the Canadian oilpatch.

"We're concerned things are going in the wrong direction," said Lloyd.

"Companies are cutting their R&D budgets, government is cutting back its funding - compared to other industries, we're falling behind."

According to Statistics Canada, resources dedicated to R&D in the oil and gas industry fell by more than one-third between 1988 and 1993.

The initiative to launch PTAC started in a fall breakfast meeting of the Vice-Presidents Breakfast Club, an informal gathering of oilpatch VIP's.

Lloyd, former vice-president of operations for Poco Petroleums Ltd., said universal concern about the decline in R&D, prompted the executives to launch a study to see if there was interest in pursuing collaborative projects.            

A positive response led to the formation of PTAC this spring.

A total of 31 companies, including such major players as Alberta Energy Co. Ltd., Amoco Canada Petroleum Co. Ltd., and PanCanadian Petroleum Ltd. have already made a three-year commitment to the organization.

PTAC is now setting up eight technical sub-committees, including forums on the Internet, to focus on production an processing of natural gas, drilling, oil production, well completion, stimulation, oil and gas transportation, reservoir recovery, geoscience, and basic research.