On a visit to Shell's Rijswijk Technology Centre, Rigzone contributor Nicholas Newman finds out the key ingredients behind the firm's strong innovation record.
Royal Dutch Shell plc established its reputation for ground-breaking innovation with the design and construction of the world's first commercial liquefied natural gas (LNG) plant in Algeria in 1964. Today, the need to be ever more innovative is crucial, given the crash in oil and gas prices, which is forcing extreme cuts throughout the industry value chain. In addition, the fossil fuel industry is coming under pressure from the adoption of policies aimed at combating climate change making long-term investments commercially much more difficult to justify.
"Currently, Shell employs 93,000 people and spends $1.1 billion on R&D [research and development]," Shell spokesperson Wendel Broere told Rigzone at a recent event at the Shell Technology Centre in the Netherlands. Despite this it has realised it needs more bang for its bucks.
According to Dr. Victor Newman, Industrial Fellow at Greenwich University, London, Shell "has realized that, despite the presence of internal excellence, there are smart people and technologies in the external world, that can add value to their innovation portfolio". Change came in 1996, when the company implemented its Shell GameChanger Program that according to Marian Marino, who heads the program for Shell, "identifies and nurtures unproven ideas that have the potential to drastically impact the future of energy".
Successful innovations arising from Shell's GameChanger Program are wide ranging and include advances in gas-to-liquids technology, the use of microbes to scrub clean raw natural gas and the introduction of liquefied natural gas plants, for converting natural gas into LNG and vice versa, onto seaboard barges and tankers.
Taking this development further, Shell is constructing the world's first large-scale floating liquefied natural gas (FLNG) project. Known as Prelude, this project is due to come on stream in two years' time, according to Broere. The Prelude project will be anchored off Northern Western Australia to serve the offshore Prelude and Concerto gas fields. The facility is expected to produce 5.3 million tons per annum (mtpa) of liquids of which 3.6 mtpa of LNG, revolutionizing the economics of developing offshore gas fields in remote areas.
Turning a Frog into a Prince
The aim of the program is to "turn a frog into a prince," according to Marino. "It's about becoming better at spotting a good idea, whether from inside or outside the firm, that will meet Shell's corporate needs and ambitions," she said.
GameChanger incorporates seven stages of scrutiny, brainstorming and testing starting with submission of an idea through to proof of concept, after which it is ready for commercialization. Prior to entry to the program is a preliminary ideas collection phase from universities, research centers, conferences, workshops and seminars.
"We have a worldwide network of spotters who keep their eyes open for potential innovative ideas," Marino said. "We call our spotters 'Friends of GameChanger'."
Entry into the program begins with formal submission of concept statements to the weekly GameChanger meetings and allocation of a sponsor, who takes the idea to a two-person panel, for acceptance or rejection.
"The concept has to be of potential value, novel, and also has to have the capacity to be developed and deliverable, together with meeting the needs of Shell," Marino said.
Successful applications enter a maturation phase where the GameChanger sponsor works with the idea proponent. Once ready, the proposal is pitched to a three-person GameChanger team panel, plus three experts with extensive technical and business knowledge relevant to the proposal.
At this stage, a process similar to a PhD viva takes place. The proposal is debated, questions are encouraged and opinions developed. The invited experts are asked to provide on- the- spot recommendations. The GameChanger team members, will discuss among themselves, all elements of the proposal and their experts' views, a process which may tweak, modify or reject the proposal and make their decision known within 48 hours.
"In fact, our moderation process helps to refine and speed up the value of the proposal," Marino said.
The decision, and its justification together with the summary minutes of the discussion, is delivered to the proponent of the original idea.
Success ensures that the proposal enters an approved proof-of-concept research program in which successive panels evaluate performance and modify plans. On average it can take half a million dollars and up to two years for the investment proposal to be proved, after which it is moved on to the next stage of turning the proven concept into a commercial reality.
Once the idea has successfully passed through the GameChanger process, it can move forward in one of three ways:
An example of an insider or proprietary idea, is the utilization of Vertical CT Scanner geological analysis to examine the behaviors of rocks and fluids. It took Shell some 18 months to prove the concept and a year before the technology was adopted, according to Marino, while a closely-related concept using nuclear magnetic resonance to determine the water, gas and oil molecules behavior within a pipe sample took some four-and-a-half years to realize.
Three challenges stand out in Shell's innovation process: communications, timescales and allocation of intellectual property rights. Establishing and maintaining open, frequent and fluid communications amongst all players during the innovation process is key, according to Marino. Equally challenging is the length of time the process can take to reach commercialization. Lastly, there is allocation of intellectual property rights amongst all parties.
The GameChanger program has made Shell "better at spotting potential princes from the frogs and it has been extended to Shell's core as well as its business and research partners," Marino said.
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