Power losses in a typical 4 stroke engine.
Several ways to decrease the amount of power lost in an engine are:
Using synthetic, low drag oils. Most racers use custom blends of oil to reduce the fiction in their engines. The out come of this is a longer lived engine, and more power.
Some engines use a ceramic coating on the pistons and combustion chamber to reduce the amount of heat that the engine absorbs. Coating the pistons and combustion chambers can produce power improvements of up to 10%.
Materials used in the engine can also affect how much friction and heat absorption is occuring.