In a fast-changing and highly competitive world, technological innovation is a key differentiator for Shell. We continue to invest in technology for our Downstream business across the range of its activities – from refining to chemicals. For example, our technology leadership in lubricants – as a portfolio of more than 150 patent series attests – provides a key competitive advantage to help create some of the most advanced oils and greases.
Our cutting-edge technology continues to deliver powerful catalysts and proprietary processes to help give us a competitive edge in core petrochemical markets. Our catalysts, for example, lie at the heart of some of the most efficient manufacturing units for ethylene oxide and mono-ethylene glycol. And a new process chemistry we are developing has the potential to create a more sustainable route to diphenyl carbonate: a key raw material for polycarbonates, which substitutes for glass in many products.
As we enter a new wave of growth based on deep-water projects and the development of tight, shale and coalbed-methane resources, drilling is becoming a key determinant of Shell’s success. Shell already has a strong performance record there. For several years running, it has been ranked first in benchmarking studies of the Independent Project Analysis Institute and in the top quartile in terms of cost competitiveness. As we further develop our drilling operations, we are commissioning state-of-the-art rigs and well technologies that comply with the highest industry standards for safety and the environment.
We also lead the industry in the use of “underbalanced” drilling. Such drilling results in higher inflow rates after the well is completed. That extra flow is particularly important in “tight” gas reservoirs, where – even under the best of circumstances – the gas moves through the rock a thousand times slower than it would through conventional reservoirs. The successful development of tight-gas fields also depends critically on drilling costs. Here too we have developed ways to save money without compromising safety or putting the environment at undue risk. Our soft-torque rotary drilling system, for instance, dampens the uncontrolled twisting of drill pipe, making it possible to finish wells quicker and with fewer drill-bit changes.
We persist in pursuing technological breakthroughs across the spectrum of our businesses: from novel seismic acquisition technology to enhanced oil-recovery methods, from advanced biofuels to ultralow-friction lubricants. We also work on technologies to reduce the environmental footprint of our operations and products. These are applied, for example, in carbon capture and storage schemes to reduce CO2 and other emissions or in energy-efficiency programmes for our refineries or for our customers.
The development of Shell technology is intrinsically linked to our strategic objectives and based on the needs of our customers. It is driven by a single integrated R&D organisation that complements in-house development of proprietary technologies with external scientific and technological partnerships. This partnering, which sometimes involves openly sharing results, helps to ensure a healthy influx of new ideas and to speed up technology developments.
WELL MANUFACTURING SYSTEM
We aim to further improve our drilling efficiency and control costs through innovative automation. In 2011, we reached an agreement with China National Petroleum Corporation (CNPC) to develop jointly a well manufacturing system that can repeatedly drill and complete standardised wells in a automated manner. Such a system will help us unlock resources that so far had been uneconomic to develop.
A new Shell technology – SCADAdrill – will play an important role in the well manufacturing system. SCADAdrill is the control software that enables computerised drilling to proceed autonomously, with continual self-adjustment of the bit trajectory. In this way, well engineers can be kept away from the worksite hazards as drilling proceeds faster and more reliably.
The Shell/CNPC venture expects to build nine of these automated rigs in 2012 and offer support services on a world-wide basis. We expect the venture to spend about $1 billion, employ 700 staff and have more than 40 rigs operational by 2015.