Shell’s technology chief has his eye on innovation

Dave Rossman For the Chronicle: Royal Dutch Shell's chief technology officer Jan van der Eijk.

 By KRISTEN HAYS Copyright 2008 Houston Chronicle

Oct. 22, 2008, 11:09PM

Jan van der Eijk, Royal Dutch Shell’s chief technology officer, oversees the oil major’s technology initiatives, such as use of seismic imaging to map out possible oil deposits beneath the sea floor, mining Canada’s oil sands and squeezing more oil from existing wells. The industry acknowledges that easy-to-reach oil is largely gone, meaning technological advances are critical to extracting hard-to-get resources in remote areas.

Van der Eijk recently visited Houston for a gathering of Shell’s chief scientists from throughout the world at a nanotechnology conference. The event was closed to the public, but van der Eijk spoke with the Chronicle about how the recent fall in oil prices and the global financial crisis could hinder development of technological advances and how such breakthroughs have increased the industry’s ability to find oil and gas.

Q: Oil prices had been really high for some time. Given how they’ve fallen with the worsening global economic situation, do you have any concern that that could hinder technological advances that need higher prices in order to be economic?

A: We in general pride ourselves with having a long-term strategy. We work with scenarios that try to give us pictures of how the culture could develop. Having said that, of course, we and the industry are not immune to what’s going on outside the company. I would say the high oil prices over the last few years have definitely added fuel to technology and innovation. More things that could not be justified at lower oil prices were made possible — not only fossil energy, but renewable energy and biofuels. I believe we have tried not to become carried away with very high oil prices. We need to make sure we keep a steady course because apart from the ups and downs of the economy, there is a real hard truth that the world is going to need substantially more energy. Why? The number of people is growing, and that equates to more energy consumption.

It’s also clear that the easy oil and gas will not be able to keep up with that growth. So we need new technology to get access to more difficult sources of energy. That can be renewables, heavy oil, deep water or arctic.

Q: Do you have any concern that your vendors or contractors might be affected?

A: I think in general a drying of credit, more importantly erosion of confidence and trust about what the future will bring, will definitely have an effect on our customers. It will have an impact on our suppliers, and it will have an effect on our partners in countries where we develop new energy sources.

Q: What do you think is the industry’s biggest technological advance in the last 10 years?

A: Of course that’s in the eye of the beholder. From my perspective, I continue to be tremendously impressed by our ability to characterize the subsurface (the layers of rock, sand and salt below the sea floor). Seismic imaging and interpretation of seismic, combined with gravitational measurements and electromagnetic reflections, that altogether gives us an ever-growing insight into what the subsurface looks like. We can’t claim it’s the equivalent of going in a room and switching on a light. But I definitely see that as a revolutionary development also enabled by faster and faster computers.

Q: Along with technological advances, there is a big push to find ways to get more out of what you have. What sorts of things do you foresee to get more oil out of the rock?

A: This, of course, is a very big topic now. Getting more out of what you have makes a lot of sense, and the industry has been working in this space for a long time. Typically when you have passed the primary production, you then start to stimulate further flow by injection of water. Then you can start to inject also gases that make oil more mobile. There basically are two other trends. If you have a reservoir of relatively heavy oil, you need to find a way to mobilize it. You can do this by heating it typically by using steam, or you can try to dissolve it in another medium, a gas or a solvent. You can do this with carbon dioxide.

It is technologically a very interesting and promising area, but it is also along with highly technical complexity.

Q: Both primary and enhanced efforts can recover a portion of the oil in a reservoir. Is it realistic to believe you can recover 100 percent?

A: It’s very dependent on the reservoir. Every reservoir has its own characteristics. Today we see recovery from reservoirs is, on average, 25 percent but it varies a lot per field. You’ll have very viscous oils, like in Canada, where primary recovery may not be more than 5 percent.

There are also very light oil reservoirs where you may get to 50 percent. Is it realistic to go to 100 percent?

That’s always a good aspiration, and in one field you’ll get closer to that than in another. If you look at the average, I would say we’re at 25 percent now. Depending on the oil price, I think we’ll see that creeping up from 25 percent to maybe 45 percent. If you have 45 percent, there will be fields where you recover 80?percent.

It’s also true, I believe, that this is an area a bit like deep water. It’s an area where people will continue to put effort in and you will see that recovery number creeping up.

Now, almost by necessity, it will never reach 100 percent, but there’s a very good incentive to move the recovery up.

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