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Lower oil prices and the race for higher returns are pushing regional and national oil and gas companies to spend billions of dollars on artificial intelligence.
The hope is that the technology will improve margins and reduce operating costs.
Saudi Aramco last year invested around $3.5 billion in research and development including in AI, according to analytics house GlobalData.
Last week Abu Dhabi National Oil Company (Adnoc) launched EnergyAI, an initiative it described as “the world’s first of its kind custom-built agentic AI.” Agentic means autonomous.
Adnoc also awarded a $920 million contract last week to expand what it says is an AI-driven oil-well digitalisation programme across its main oilfields in Abu Dhabi. The plan is that this will enable remote monitoring and control of more than 2,000 wells by 2027.
“The role of artificial intelligence in our industry is quite transformational because it enables it to take faster decisions, improve operations, reduce cost,” George Bou Mitri, general manager for the Middle East and North Africa for Honeywell, a North Carolina-based industrial conglomerate, told AGBI.
According to Honeywell’s Industrial AI Insights survey, almost half of the executives in the Middle East believe that AI will increase productivity by 40-50 percent in the energy industry over the next five years.
Adnoc CEO Sultan Al Jaber said that EnergyAI will increase the accuracy of production forecasts by up to 90 percent. The company said earlier this year that AI tools generated $500 million (AED1.84 billion) in “value” in 2023.
Rob McGreevy, chief product officer of Aveva, a software provider, said that Aramco and Adnoc use analytics to monitor equipment performance, predict failures, and recommend maintenance actions. AI can also improve energy consumption and lower emissions saving tens of millions of dollars, he said.
McGreevy said that Adnoc had saved over $100 million over six months in its Panorama project, which collects information across 14 subsidiaries and joint venture companies.
Another AI pilot programme, Neuron 5, has cut the number of unplanned shutdowns by half and enhanced planned maintenance intervals across operations by a fifth, he said.
Widad Haddad, general manager for the UAE, Oman, Yemen and Lebanon for Emerson, an industrial group, said that a lot of technology that would fall under the AI umbrella was initially used in remote and unsafe places “where things were difficult to do”.
On offshore platforms and wells, AI is replacing humans. “That optimises safety and cost of personnel going back and forth,” said Haddad. “In places where you need advanced analytics that can use historical patterns to make decisions, AI starts also peaking up.”
Automation and better software can also reduce energy consumption by 10-15 percent in refining operations, according to Emerson.
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Vikas Dhole, senior vice president of AspenTech, a Massachusetts based software provider, said that for a 200,000 barrels per day refinery, automation and AI could potentially increase margins by $4 to $5 per barrel.
“As an asset goes through operational changes … AI automatically readjusts for it,” he said.
Industry experts also believe that AI could help with labour shortages. Mitri said that the oil and gas sector may be short of up to 40,000 workers by 2025, “Younger generations find a career in the field broadly unappealing,” he said.
Honeywell studies have found that over a third of employees are over 50, and only 12 percent are under 30, making it difficult to replace retiring experts with younger workers.
“AI has to play a major role in driving the same industry productivity, but equally in knowledge transfer.”