In a fast-changing and highly competitive world, technological innovation is a key differentiator for Shell. So we have linked technology development to our strategic objectives and the needs of our customers and partners. And a single, integrated R&D organisation drives it forward, bringing together in-house developments with external scientific, engineering and commercial partnerships. This partnering, which sometimes involves openly sharing results, helps to ensure a healthy influx of new ideas and to speed up the deployment of technology.
We continue to invest in technology for our Downstream business across the range of its activities – from the refining of oil products to the manufacture of bulk 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 catalysts 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 is used instead of glass in many products.
As Shell seeks to grow its production on the basis of deep-water fields and tight/shale formations onshore, drilling safely and efficiently is becoming even more important for Shell. We are therefore commissioning state-of-the-art rigs and well technologies that comply with the highest industry standards for safety and the environment. We also took the front-runner position in implementing “underbalanced” drilling techniques. Such drilling results in higher inflow rates after the well is completed. That extra flow is particularly important in tight/shale 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/shale resources 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 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, or in energy-efficiency programmes for our refineries or for our customers.
WELL MANUFACTURING SYSTEM
Shell and China National Petroleum Corporation formed the Sirius Well Manufacturing Services venture to develop a highly automated well manufacturing system aimed at reducing drilling’s environmental footprint and making its logistics more manageable.
The system is based on specialisation, automation and an assembly-line approach. Mobile or transportable rigs carry out certain tasks, such as initiating the hole or finishing a well. Each rig is designed to do its job as quickly, efficiently and safely as possible, with the smallest possible footprint. Once a rig has finished its specific task, it moves on to the next well, allowing another kind of rig to move into place to take the next step. At any given time, multiple wells may therefore be in various stages of drilling and completion throughout a field. The rigs will be deployable to fields around the world.
This kind of well manufacturing requires standardised designs and repeatable procedures. It also relies on a computerised system that autonomously and continuously evaluates and controls the drilling process. Such automation not only lowers the cost of drilling but also improves safety, as it keeps people away from hazardous areas. It furthermore provides a way to cope with the severe shortage of trained rig crews that has been an obstacle to the large-scale development of tight gas and coalbed methane resources.
The venture is making good progress; its first contract was signed with Australia-based Arrow Energy in 2012. By the end of 2013, five fit-for-purpose drilling rigs and one fracturing unit are expected to be deployed, and the fleet is expected to grow to about 35 rigs and fracturing units by 2015. The venture had about 100 employees in 2012.