Saudi Aramco is the largest investor in artificial intelligence in the oil industry. This fact was recently revealed in a report by Global Data, which also revealed that the Saudi state major is investing heavily in all kinds of advanced technology. Because this is where the competition will be in the future.
Saudi Aramco spent $3.5 billion on research and development last year, Global Data said in its report, adding that the company is active in 250 areas of innovation, including AI, drone technology, robotics and electric vehicles.
As for AI itself, the technology has been deployed in areas such as oil exploration, fault monitoring, and cyber threat detection. On the one hand, it adds to the evidence of the potential of artificial intelligence that is driving its growing popularity in the information technology sector and elsewhere. On the other hand, information suggests that Aramco is actively working to achieve a new type of competitive advantage: technology-driven.
Of course, the Saudi company is not alone in this. Oil and gas, while traditionally slow to adopt emerging technologies, has recently moved quite quickly. Bloomberg reported earlier this year that US shale drillers are using artificial intelligence to improve drilling efficiency and increase recovery rates.
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The U.S. shale patch is an early adopter of such technology because production costs there are typically higher than conventional oil and gas drilling, spurring a greater appetite for new solutions. Now, thanks to tech, those costs are coming down as drilling times get faster—and accuracy gets better.
Aramco, on the other hand, is as conventional as oil companies go, at least on the face of it. Underneath that facade, the company appears keen to adopt a cutting-edge technology even in lean years like 2023, if not early.
Global Data reports that Aramco has established a digital innovation ecosystem called SAIL, or Saudi Accelerated Innovation Laboratory, to partner with other institutions, including government agencies and startups, to “develop digital innovation products.” To promote” has been established.
Aramco is also betting on future technologies. The company has been closely monitoring the startup ecosystem and in the recent past has invested in a number of companies such as Pragmatic, which makes flexible semiconductor chips, and Sunrate, a fintech company. Practice Head Saurabh Nyalkar said.
Aramco in particular and Saudi Arabia in general seem to be trying to do what the UAE did with construction as a diversification strategy to reduce their almost exclusive revenue dependence on crude oil. can be done That artificial intelligence, robots, and the rest of the new tech coming out of the startups and big tech field could be used to boost oil production should be a welcome bonus.
According to Evercore ISI, AI and other tech could reduce costs in the shale patch by double digits as soon as this year. Evercore analyst James West told Bloomberg in March that there would be “significant cost savings in the double digits at least, but perhaps 25% to 50% of cost savings in certain circumstances.
If it can lower costs for shale drillers, AI can surely lower them for everyone else, even the world’s lowest-cost producers, the Saudis. But cost reductions are only one of what appear to be many benefits that the oil industry stands to gain from using the technology, such as more productive wells, more accurate exploration, and better risk detection. Including not just cybersecurity, but spills and leaks. Best of all, the industry has the tools needed to power power-hungry AI applications.