An invasion of innovation

Gerald Schotman

October 2, 2014

Speeding up the rate of change in the oil and gas industry

Our industry has a big question to answer: Can it innovate fast enough to meet the global energy challenge? I believe the answer is yes – but only if it is never satisfied with its achievements and constantly seeks outside inspiration.

Our industry has made its share of technological breakthroughs over the years, many of them enabled by collaboration across company boundaries: oil companies working with service companies, for instance, or specialist technology boutiques working with established equipment manufacturers. But to accelerate the rate of change, I strongly believe that we need to look beyond our industry’s boundaries. So I’m extremely interested in innovations that seem to have nothing to do with oil and gas.

“Smart everything” is a good example. The term describes the growing phenomenon of everyday objects that can sense and communicate. Thermostats, refrigerators, eyewear and even clothes now inform their owners of conditions to save time, money and energy – even when the owners are far from home.

There’s also a lot we could learn from the medical sector in this regard. Contact lenses can now monitor the glucose levels in tears, and bracelets can monitor our physiological functions. These innovations are helping doctors and patients alike to manage their healthcare.

With “cognitive computing” objects will even sense our subjective states, too. They will understand the meaning of our habits and moods, our way of speaking and behaving – and they will react accordingly.

All these examples I’ve cited have something in common. They enable faster, well-informed decision-making – which is something the oil and gas industry urgently needs. So we need to welcome these innovations and embrace them. Shell certainly is.

Last year, Shell opened a center in the Netherlands where experienced engineers can diagnose the operating condition of key rotating equipment, such as compressors and pumps, with a system called SmartConnect. The equipment under examination, however, does not have to be physically in the center – or even in the Netherlands; it could be anywhere in the world. Thanks to SmartConnect, incipient breakdowns were detected among more than 2100 equipment trains and a significant amount of oil and gas that might otherwise have had to be deferred was in fact produced.

Shell has started using optic fibers not only to transmit data but also as sensors. Strung from top to bottom in a well, they make it possible to keep tabs on the temperatures, pressures and flow rates all along the well. Our wells are also being equipped with automated control systems. As a result, multiple stacked reservoirs can be concurrently produced through one wellbore.

Like the latest model cars, which have internet-enabled dashboards and driver-assisting systems based on a combination of sensors, Shell’s offices and control rooms enable engineers to display real-time reservoir data and their analysis on screens. This instant connectivity to assets gives the engineers far more insight into reservoir behavior and enables them to optimize production.

To sum up, I see a friendly invasion of innovation into our industry delivering the technologies we need. The big question now is not “will it work?” or “will it work at scale?” but “how fast can we make this work?”

Gerald Schotman is formerly the executive vice president, innovation, R&D and chief technology officer, Royal Dutch Shell. He now serves as director of the Nederlandse Aardolie Maatschappij (NAM), as of October 1. Gerald Schotman was appointed chief technology officer at Shell in 2009. Schotman was also appointed Executive Vice President Innovation/R&D during the same year, making him responsible for the technology strategy at Shell, as well as for the creation and development of new technologies. Schotman graduated as a Civil Engineer from Delft University of Technology in the Netherlands and joined Shell as a research engineer in 1985.