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From the signing of the concession by King Abdulaziz Ibn Saud to explore for oil in Saudi Arabia, it took 15 years until the first discovery of crude oil at the abundant Dammam Number 7 well in 1938.
If the American and Saudi explorers who eventually made the strike had the benefit of modern artificial intelligence and digital survey techniques, that same process could have been completed in months – or even weeks.
Such is the transformational potential of AI in global oil and gas. The industry is jumping enthusiastically on the AI bandwagon as a silver bullet for its challenges – not only in exploration and production, but also in the long-term goal of energy transition and decarbonisation.
At the recent CERAWeek conference of energy leaders in Houston, at least 25 per cent of panels were specifically on the AI and digital revolution, and almost every conversation included it as a top priority in the energy agenda.
The Arabian Gulf oil producers were particularly enthusiastic.
Adnoc CEO Dr Sultan Al Jaber told the conference: “Using AI, we are speeding up our upstream seismic analysis from months to hours. We are increasing the accuracy of production forecasts by up to 90 percent and we are on course to make Adnoc the most AI-enabled energy company in the world.”
Not to be outdone, his Saudi counterpart Amin Nasser, CEO of Aramco, said: “AI will be a game-changing enabler in energy”.
Gulf national oil companies (NOCs) and energy ministries are increasingly investing in AI not only to streamline exploration and optimise production but to model demand, manage risk, and to forecast price movements on global markets.
In Houston, the discussion was about how AI can process millions of data points – weather patterns, tanker traffic, refinery outages, economic indicators, geopolitical sentiment, even Twitter (or rather, X) chatter – to generate price scenarios that are faster and more accurate than traditional analyst models.
An AI-powered oil market may sound like science fiction. But for Gulf energy leaders, it could be the next step
Saudi Arabia and the UAE are both pouring billions into AI initiatives under their broader economic visions, building predictive models not just for seismic analysis and efficiency but for market insight, exploring price modeling as a tool for trading and hedging.
The idea of an AI-powered oil market may sound like science fiction. But for Gulf energy leaders, it could be the next step in transforming from hydrocarbon exporters to information superpowers.
There is an interesting side question of whether the rest of the global trading community will accept the validity of trading data derived from Gulf-originated AI systems.
Are the Gulf NOCs just “talking their book”, or does their decades-long expertise in energy give them a natural advantage in analysis that will only be enhanced by AI? How would the traders regard an AI-powered Opec, for example?
Whatever, it is clear that AI can do a lot for the energy industry. But the flip side of the coin is what the energy industry – with the trillions of dollars of assets on the balance sheets of NOCs and independent oil companies – can do for AI.
The other big theme of CERAWeek concerned the huge amounts of energy that will be required to power the AI revolution. One estimate had it that by next year, the energy needs of all new data centres would be the equivalent of the entire annual electricity consumption of Japan.
The Gulf can help to satisfy this demand by ensuring continued supplies of reliable and affordable energy in the form of hydrocarbon fuels, but also via investment into big AI projects at home and internationally.
This process is under way too, with multi-billion dollar investment deals announced recently by the Saudi Public Investment Fund and by MGX, the new Abu Dhabi technology investment company.
AI is no longer just a Silicon Valley obsession – it has become an essential tool in the oil and gas world, especially in the Arabian Gulf where energy remains the economic backbone of government strategy.
In 2017 The Economist magazine carried a cover story calling data “the world’s most valuable resource”, which popularised the phrase “Data is the new oil”.
Many thought that premature, as crude grabbed the headlines again and again through pandemics, wars and economic turbulence. After CERAWeek in Houston, it looks like a scoop.
Frank Kane is Editor-at-Large of AGBI and an award-winning business journalist. He acts as a consultant to the Ministry of Energy of Saudi Arabia
