DUBAI — We know the region's average annual increase in energy consumption is forecasted to be around 2.1 percent over the next 27 years, nearly double that of the global average forecast for that same period of 1.6 percent per year. This is a positive reflection of the Middle East economic growth, which is today more optimistic than elsewhere in the world. Many world-class energy ventures are already under way in the region, such as the re-development of the Majnoon oil field in Iraq, one of the largest fields in the world, to increase oil production, or the setting up the Basrah Gas Company to tap into existing gas resources that would otherwise be flared. Certainly, energy opportunities are abundant in this part of the world. However, to make the most of them in order to meet the increase in demand, I think one key ingredient is necessary: technology innovation. Innovative approaches will have to be called upon to meet the energy challenge through a multi-pronged approach addressing: the need to prolong the life of existing fields; the need to unlock new resources in more challenging locations and geologies; and the need to limit environmental and social impacts as the benefits of natural resources are maximized. Advanced approaches to field management can make a difference to prolong the life of mature resources. Enhanced oil recovery (EOR) technologies could add 300 billion barrels to the world's total recovery from mature fields. Petroleum Development Oman (PDO) has several such advanced projects under way. Shell's SmartField technology on average increases oil recovery from a field by 10 percent and gas by 5 percent and can also boost the production rate. SmartField technology relays digital information on temperature, pressure and other field conditions to control centres, ensuring the right information is delivered to the right people in time for them to act. Unlocking new resources in the case of gas is likely to include a move into very ‘tight' rock formations, with gas-trapping pores much thinner than a human hair. For this goal, Shell is driving several innovations. For example, our novel seismic partnership with IT giant Hewlett-Packard is testing a microscopic motion sensor on a silicon chip to locate the most promising resource locations. Unleashing the power of innovation, a small device originally meant for data-storage is becoming an important part of accurately assessing exploration prospects. In this area of natural gas trapped in tight rock where hundreds or even thousands of wells are required, drilling automization and standardization will allow us to mass-produce these wells quickly, efficiently and safely. One of our latest ‘well manufacturing' concepts we drive in partnership with China National Petroleum Company. Increasing drilling efficiency needs to equally be applied to ‘conventional' gas fields. In Qatar's North Field for example the average delivery time of gas wells has been reduced from 75 days to an average of 45 days by the Pearl gas to liquids (GTL) team. The trick? Discover new ways and perform drilling and completion operations simultaneously. The Pearl GTL project, developed jointly by Qatar Petroleum and Shell, is not only the world's largest GTL plant but also a world-class example of innovation. Benefiting from the 3,500 patents that Shell has been granted over the last 30 years for GTL technologies, this mega project turns natural gas into cleaner-burning fuels and high-performance lubricants. The third priority is to address the challenge with a focus on environmental sustainability. An innovative design, for example, enables the Pearl GTL project to operate without any external source of freshwater. A water processing facility comparable to that of a plant for a town of a 140,000 people treats all the industrial process water for reuse. It's one of the world's largest. Another exciting approach is offered by the solar technology of GlassPoint. It installs mirrors to concentrate the warmth of sunlight to generate steam for thermal EOR – a renewable energy solution to maximising oil recovery. GlassPoint is building a pilot solar-steam plant in Oman for Shell's joint venture partner PDO. Also in Qatar, the Qatar Carbonates and Carbon Storage Research Centre opened in September this year is focused on improving carbon dioxide management, through partnerships with Qatar Petroleum, Qatar Shell, Qatar Science and Technology Park, and Imperial College London. Partnerships for innovation are central to meeting the region's rising energy needs at the speed required. No single company can meet the energy challenges that lie ahead for Middle East alone. Shell's commitment to R&D, spending around $1.1 billion a year, has earned it a place among the Massachusetts Institute of Technology's list of the 50 most innovative companies of 2012 - the only international energy company to do so with more patents than any of its international oil company peers. Innovation is not just about creating technology; it's about sharing technology and expertise; it's about working across the boundaries between the public and private sectors. Nowhere is creating the seeds for this knowledge economy more important than in the Middle East where about 80 million young people will be entering the region's workforce by 2020. Companies need to do their part, alongside governments. Programs to kindle the spark of innovation at the grass roots level have an important part to play. For example, Shell Foundation's seed funding to develop Nomou, a small and medium enterprise initiative managed by GroFin, will support young Middle Eastern enterpreneurs. Corporate knowledge sharing initiatives are also a key. The newly established Project Management Centre of Excellence between Qatar Petroleum and Qatar is one example; the Gas Research Centre in the Emirate's Petroleum Institute in Abu Dhabi is another. Working closely with regional universities is also vital. Shell sponsors professorships (Sultan Qaboos University in Oman) and has forged partnerships (King Abdullah University of Science and Technology), focusing on research programs covering geophysics, data visualization and computer modeling. Innovation is all about making a difference. There's no doubt in my mind that, working together at the forefront of innovation with governments, educational institutions and other businesses, we will be better able to meet the challenges posed by change.— The writer is Executive Vice President, Innovation R&D and Chief Technology Officer, Royal Dutch Shell
