The adoption of Artificial intelligence (AI) across the oil and gas sector has significant potential to transform the industry. From predicting equipment failures to reducing drilling risks in seismically unstable areas and monitoring hard-to-reach areas, AI offers oil and gas companies the ability to work with greater accuracy and efficiency. In subsea environment, for example, robots equipped with cutting-edge software to monitor the condition of pipelines and report potentially hazardous areas, while in earthquake-prone regions, AI will analyze huge amounts of data to ensure accurate drilling. The benefits to be reaped by the oil and gas industry are huge, starting from significant financial operational costs savings up to improvements in health and safety conditions for staff.
In the Middle East, home to some of the biggest industry players globally, AI was initially approached with some hesitancy. Today, however, attitudes are changing as companies are waking up to the value it can afford their businesses. In October 2018, a global survey of oil & gas c-suite executives published by KPMG showed that 97% of respondents understood the potential value which technological innovation could add to their business. Half of the respondents were actively implementing such solutions. On account of the growing uptake of AI, the industry is currently valued between $1.4 - $1.7 billion globally, and by 2022, it is expected to exceed $2.8 billion.
Across the region, there are already many successful case studies on the implementation of AI solutions within the sector. Trailblazers in the adoption of AI include Saudi Aramco, the national oil and gas company of Saudi Arabia, and one of the largest companies in the world by revenue. Aramco is actively using advanced analytics and AI solutions to improve productivity across its facilities. In January 2019, its Uthmaniyah Gas Plant facility was recognized by the World Economic Forum as a “Lighthouse” manufacturing facility and leader in the fourth industrial revolution. It is the first energy company to have been included among this exclusive list of manufacturing sites worldwide.
The state oil company of the United Arab Emirates, ADNOC, is similarly pursuing digital transformation. Thanks to the company's "Predictive Maintenance" project launched in 2018, a flagship initiative in ADNOC’s Digital Transformation Strategy, overall operational costs were reduced by 10-25%.
In Bahrain, national oil company Tatweer Petroleum entered into a partnership agreement with the University of Bahrain (UOB) to facilitate innovation in the fields of Data Science and AI. The two parties signed a Memorandum of Understanding (MoU) in 2018, which will see them working on investigating and implementing new ways to analyze, visualize and understand data analytics algorithms and machine learning processes, leveraging Tatweer Petroleum’s existing big data and IoT infrastructure.
The appetite for AI across the region is only set to grow. At Zyfra, we have already seen growing interest in our offerings from regional oil and gas players. Our solution, for example, is in particular demand. Ensuring the accuracy of oil drilling up to 30 cm, more than 4,000 wells – ranging from 500 m sidetracks to 6 km horizontal wells - have already been drilled with this tool. It allows for a 5-7% reduction in non-productive drilling time while improving in-zone drilling by 40% compared to conventional tools.
Other AI solutions which we expect to see a growing demand for, include a system which is based on machine learning technology for electrical submersible pumps. Usually, optimal operating modes are set manually and changed every three months. Thanks to our solution, data on historic oil well production is analyzed and compared against current operating parameters, to recommend the optimal mode of well operation, thereby maximizing oil production. This technology has already been tested across 500 oil wells in western Siberia, Russia. It has proved highly effective, boosting production by 1.5% and leading to additional profits of $2m.
Advances in AI offer the oil & gas sector the opportunity to save millions of dollars on exploration and production and achieve healthy profits, even during times of low oil prices. By 2030, PwC estimates that the sector will account for 12% of Saudi Arabia’s and 14% of the UAE’s GDP alone. With many more regional industry players set to follow in the footstep of the oil and gas giants, the market potential for AI solutions in the Middle East is huge.