Wim Thomas, chief energy advisor, Royal Dutch Shell speaks about developing resources within the evolving worldwide energy mix and the potential of digital technology to promote efficiency via such methods as live information data streaming
What do you see as the future of the world’s energy mix over the coming decades and is Shell changing its approach to reﬂect any evolution?
The Paris Agreement has sent a signal around the world for a much higher aspiration to reduce CO2 emissions to keep global warming well below 2°C. A new energy system must then emerge, but it will unfold over decades, moving at different paces in different places.
However, the transition is far from certain in scope and timing and offers challenges, opportunities and tough choices for governments, businesses and customers.
For Shell, this means that we will continue to sell the oil and gas that society needs, while preparing our portfolio to move into lower-carbon energy in pace with overall societal progress and when this makes commercial sense.
We believe Shell’s strategy, portfolio and strong ﬁnancial framework give us the ability to thrive in the energy transition.
How will digitalisation effect the production of oil and gas and is the industry making full use of its potential?
Digitalisation is transforming how energy companies like Shell operate. Engineers are increasingly using Big Data and digital technology to improve efﬁciency and boost production.
Industrial machinery is increasingly embedded with software and sensors which connect wirelessly to provide live data streams and which respond to digital commands.
Analysing such data improves decision-making and efﬁciency.
Which areas of the globe is the company currently prioritising for developing its operations?
Our capital discipline supports growth across Shell’s strategic themes and we are looking to spend between $25-30 billion per year in capital investment between 2018 and 2020.
This includes $4-5 billion per year in Integrated Gas, for example. Shell announced in October that it has taken a ﬁnal investment decision (FID) on LNG Canada, a major liquiﬁed natural gas (LNG) project in Kitimat, British Columbia, Canada, in which Shell has a 40 per cent working interest. Supplying natural gas over the coming decades will be critical as the world transitions to a lower carbon energy system. Global LNG demand is expected to double by 2035 compared with today, with much of this growth coming from Asia where gas displaces coal. LNG Canada is well positioned to help Shell meet the growing needs of customers at a time when we see an LNG supply shortage in our outlook.
When it comes to Deep Water, our capital investment per year is $5-6 billion. Shell has helped develop many of the deep- water technologies and processes that energy companies use today. In the Gulf of Mexico lies Shell’s Stones project, a ﬂoating production, storage and ofﬂoading (FPSO) facility which produces oil and gas from reservoirs nearly 30,000 feet below sea level. In Malaysia, our ﬁrst deep-water project uses Shell’s advanced technology to safely produce and pipe oil from the Gumusut-Kakap ﬁeld.
We launched our new energies business back in 2016 and are looking to have a capital investment of $1-2 billion a year on new energies - as and when we identify the right opportunities.
We hope to collaborate with Oman in the coming years to further this strategic aim.
Oman offers great advantages. It has plenty of sunshine, areas along its coastlines offer the potential for wind power. And these sources of energy can help it to free up valuable gas resources for higher value uses, while generating greater economic activity in the process. We are proud to have signed an MOU with the Government of Oman that was announced earlier this year. It covers upstream gas exploration and development, gas-to-liquids (GTL), LNG and renewable energies.
Has Shell any plans which focus on the Middle East region?
Our strategy, in the region and globally, seeks to strengthen our leadership in the oil and gas industry, while positioning Shell for growth as the world transitions to a low- carbon energy system.
Shell has a solid historical presence in the Middle East and North Africa, going back over 100 years in certain countries, with an extensive portfolio of chemicals manufacturing, storage, logistics and trading operations based in e.g. the UAE, Iraq, Kuwait, Oman, Jordan and Egypt. We continue to look for opportunities to provide energy solutions for the future.