Good tech and management to aid Shell success

Technology is to play an increasingly important role in the business strategy of oil and gas producer Royal Dutch Shell , in the face of a volatile market.

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Technology is to play an increasingly important role in the business strategy of oil and gas producer Royal Dutch Shell , in the face of a volatile market.

Although no formal technology announcement were made as part of its 2008 strategy review and annual results for 2007, both reports cited the growing importance of technology and the pressures it creates.

“Our financial performance was satisfactory, with record income of $31.9 billion and the return of $13.4 billion to shareholders,” said chief executive Jeroen van der Veer. “This is an unprecedented phase of activity for the company, leveraging our strong brand, technology, integration and scale.”

The company reported profits of $27.6 billion in 2007 and announced 50 large projects for 2008, which will "underpin new cash flows for decades to come".

Commentators said it is a move to stem falling oil production by the oil corporation. Van der Veer said Shell is refreshing its portfolio in the face of "more volatile commodity prices, increased competition and higher costs".

"Operation excellence, technology and good project management remain central to our efforts to produce more energy from conventional oil and gas and unconventional sources such as oil sands,” van der Veer said in the annual report.

He described the development and application of technology as well as project management skills as the key strengths of Shell. “If we do not develop the right technology or do not have access to it or do not deploy it effectively, it may affect delivery of the strategy as well as our operational performance and financial position,” he said of the importance of technology.

Pressure on technology processes at Shell currently includes standardisation projects, as well as “more reliance on global systems, relocation of information technology services and increased regulation” he said.

Earlier this year it was announced that Shell would be outsourcing 3,200 IT jobs in July to three major providers: EDS, T-Systems and AT&T. It is expected that 400 IT management jobs will remain in-house.

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