Thriving through times of unprecedented change
Feb 4, 2020
At the Baker Hughes Annual Meeting in Florence, Italy, Shell CTO Yuri Sebregts spoke on the common themes for addressing both the energy transition and digitalisation. This is a summary of the speech that was delivered.
Digitalisation and the energy transition are two fundamental transformations that are changing the world and the energy industry. There are commonalities in the way we could rise to the challenges and opportunities of these transformations. In his speech, given at the Baker Hughes Annual Meeting in February 2020, Yuri Sebregts (EVP Technology) set out three of these common ways: collaborating with others, building capability and giving customers choice.
The world needs to move to a cleaner energy system if it is to meet growing energy demand for human development while preventing catastrophic climate change. This transition has begun and is driven by many factors, including economic growth, customer choice, emerging technologies, and national policies. At the same time, digital technologies are transforming our lives in ways that were unimaginable even a decade ago and digitalisation is changing the energy industry.
The energy transition and digitalisation are two fundamental transformations that are changing the world and our industry. They are two transformations that are not intrinsically connected, and are independent transformations, yet they could impact each other positively.
Collaborating with others
As an example of how collaborating with others helps us rise to this challenge, Shell has collaborated with Baker Hughes to develop a new static reservoir modelling tool, JewelSuite, which has been incorporated into our integrated modelling platform, PetroSigns. Together, we’ve created a ground-breaking working environment for our subsurface and wells engineers to create fully integrated models. We’ve deployed PetroSigns in the Gulf of Mexico in 2018 on the Stones asset, and now have multiple other deployments in key assets in other regions as well. Once completed, we expect to add value to our business through improved, faster field development and optimisation decisions.
This is just one example that shows how our entire industry grapples with large siloed data. Across our industry, our geoscientists spend up to 70 percent of their time just looking for data and getting it ready for analysis. This clearly slows down our speed of decision making and magnifies the need for collaboration to overcome energy transition challenges.
For this reason, Shell was a founding member of the Open Subsurface Data Universe or OSDU forum together with the Open Group consortium. The forum’s aim is to create the industry standard for a cloud-based data platform that delivers secure, reliable, and global access. OSDU enables new digital technologies and best business practices to innovate across the subsurface community. We see the fast replication and scaling of digital solutions as a critical enabler for sustainable digital transformation.
We must also collaborate with others outside our industry to thrive through the energy transition. If we want to progress the infrastructure to make any emerging fuel, like hydrogen a viable alternative for mobility, we must collaborate with vehicle manufacturers, energy companies and retailers and other players along the value chain. And we rely on governments to ensure enabling laws and regulations are in place. At this time, we’re part of a joint venture in Germany called H2 Mobility to develop a nationwide network of hydrogen refuelling stations. There are currently 81 hydrogen refuelling stations built (total will be 100 stations), 40 of which will be at Shell retail sites in Germany. Through this collaboration, we are building capability in refuelling technology and construction of hydrogen refuelling stations, whilst ensuring the highest safety standards.
One way to build energy transition capability in a large organisation like Shell, is to bring start-up companies into Shell to change our perspectives and challenge us. Sonnen is an acquisition that provides battery storage systems to households and small businesses with rooftop solar panels. Apart from covering their own power needs, owners of sonnen batteries can share their surplus of energy with each other in a smartly, optimised way.
Another example is in electric vehicle charging: according to the International Energy Agency, almost half of all vehicles sold in 2030 in Europe could be electric vehicles, a huge potential market. Shell has acquired two companies – Greenlots and New Motion – both in the electric charging business.
In the digital space, we have been building our in-house capability organically and today, our core team of specialists – cutting-edge data scientists – is almost double compared to only two years ago. Many specialists joined us from iconic companies, including digital native companies. The team is spread across four hubs across the globe and we are actively growing the team further. Our Digital Centre of Excellence has over 280 digital initiatives in-flight covering all the major businesses – from exploration to new energies. We have over 2000 members in the Shell.ai network, a network we use to share knowledge and good working practice on AI across the organisation.
Providing customer choice
We believe that how the energy transition plays out over the coming decades will depend on the choices customers make. The market – encouraged by the right government policies – will decide which cleaner energy solutions will thrive in the future. Customer choice will drive transformation at scale, and we can provide them with a range of cleaner energy products and cleaner power – to give them choice and flexibility.
We are working with original equipment manufacturers (OEMs) to develop a line of fluids engineered specifically for the powertrains of hybrids and electric vehicles. The development of e-fluids builds on decades of research in Shell laboratories. E-fluids allow greater choice by improving the driving experience of electric vehicles.
Shell offers drivers in the UK and in the Netherlands the option to offset their own carbon emissions from traditional fuels through nature-based solutions. In these countries, customers can drive carbon-neutral using nature-based carbon credits. This means that for each litre of fuel customers buy, an equivalent amount of carbon credits is purchased to offset the emissions from the production, delivery and use of that fuel purchased.
We’re also using our loyalty programme (GO+ in the UK) to improve customer experience. Digital technology and AI solutions help us understand customers’ patterns of energy consumption as well as how they consume our other goods and services. We can serve them better by aggregating their data to look for meaningful patterns, to tailor offers and rewards to their preferences.
In summary, the energy transition and digitalisation are two transformations that are redefining our industry and creating great opportunities. Shell is responding to stay competitive and resilient in a changing world with three strategies: collaborating with others, building capability and giving our customers choice.
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