Episode 9

Digitization in the Energy Sector

The Energy Transition series is comprised of one hour panel sessions involving executives and industry experts dedicated to improving awareness on various elements of the energy transition, as well as identifying investment opportunities for corporate and institutional investors.

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By Biraj Borkhataria and guest speakers
Published November 29, 2021 | 3 min watch
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Key Points

  • Does Digitalization have the potential to transform the oil & gas industry, from streamlining processes to enhancing operational performance and safety?
  • How can Technology help address the challenges of the energy transition?
  • How Digital tools including AI and machine learning can help all areas of the business?
  • How have Digital tools impacted the energy transition so far and what could happen in the coming year?

How will the digitalization of the energy sector accelerate the Energy Transition? RBC Capital Markets asked Dan Jeavons, General Manager of Data Science at Royal Dutch Shell to share his insights.


Energy transition and digitization, two megatrends going hand in hand

The momentum for energy transition is growing, amid pressure from investors and society at large, and a compelling need to transform energy systems. In parallel, we are witnessing an acceleration of digital technology. “It’s a very exciting time to be in the energy industry because these two things are coming together very quickly,” says Dan Jeavons. Royal Dutch Shell is already working with its customers to leverage some of the digital technologies developed within the company to help them accelerate their decarbonisation and make energy systems more efficient. “Shell has worked with some new technologies developed some time ago called real time production optimisation and applied it to improve production and decrease CO2. In one of our LNG facilities, one algorithm managed to deliver a 75% reduction of boil off gas associated with flaring, reducing C02 at about 130k/t per annum. It gives you an idea of how AI can be applied to reduce C02 emissions in our own operations.”

Digitalization can drive significant efficiencies in the energy sector

In 2019, despite the impact of the COVID-19 crisis, Royal Dutch Shell brought in U.S.1 mln from the impact of digitalization – through lower costs, improved production and increased utilisation/downtime - double the 2020 figure. Meanwhile, the number of customers using the company’s AI powered loyalty programme increased to 2.1 mln from 1.7 mln in the same period. “The company now has over 100 AI powered applications in production, 6000 pieces of equipment that are being monitored in real time powered by AI – this shows how quickly digital is starting to hit the energy industry and how that will translate into an acceleration of the energy transition.” Another use case of AI to increase efficiencies in the sector is in seismic processing, where data is taken its rawest form and undergoes a series of processes to generate insights about the subsurface - AI can help “de-noise” that data, he points out. “Using Machine Learning, we can reduce that cycle time significantly by 25%.”

Key to success: changing the culture

“Royal Dutch Shell established its digital strategy in 2017 to create the space and vision to go out after it as we see it as key to our future success.

First, we created top-down roadmaps for different parts of the organisations. We then developed a network of change agents,” explains Dan Jeavons. The group has over 1000“Do-It-Yourself” Software Development engineers and a similar number of DIY data scientists, encouraged to come up with new ideas, with the tools to solve problems for themselves and access to all the data they need.

This open culture includes striking effective partnerships that tap into Shell’s expertise of the energy industry to accelerate developments in the digital space. For instance, Shell developed a technology, JAWS, able to reduce C02 emissions by 7% on its own ships, which it now licenses to Kongsberg. Another notable initiative is the Open AI energy initiative (OAI) – or using all the sensors on machinery and AI to improve maintenance with real time insights.

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