BP is to invest $100m (£60m) over ten years in a UK-led research centre to help its search for oil in deeper and more challenging environments.

The oil major said it had picked the University of Manchester as the ‘hub’ for the BP International Centre for Advanced Materials, following a “global search”.

The University of Cambridge, Imperial College London and the University of Illinois Urbana-Champaign will also partner in the project, which is expected to support 25 new academic posts, 100 post-graduate researchers and 80 post-doctoral fellows.

The centre aims to develop new materials for use across the oil and gas industry. Bob Dudley, BP’s chief executive, said that advanced materials would be “vital” for the safe and efficient future of the energy industry as energy producers “work at unprecedented depths, pressures and temperatures”.

The materials would also aid refineries, manufacturers and pipeline operators to “combat corrosion” and improve their operations.

Chancellor George Osborne said BP’s decision showed the Government was “creating an environment where innovation can flourish”. It was committed to “putting innovation and research at the very heart of its growth agenda”, he said.

Mr Dudley will announce the investment a UK Trade & Investment (UKTI) event in London.

Ministers will hail a raft of deals including GDF Suez, Centrica and Bayerngas formally signing the field development plan for a £1.4bn investment in a gas field in the North Sea.

Speaking at the UKTI event yesterday, Deputy Prime Minister Nick Clegg denied that the coalition was riddled with division over energy policy, insisting the Government supported low carbon targets. He said the UK offered “political stability – most of the time, anyway”.