Not long ago, it seemed like a futuristic fantasy to develop technology that is able to gather geological data with sensor-equipped drones to help find new oil and gas deposits, improve oil drilling, detect equipment corrosion, conduct predictive maintenance to cut down on unplanned repairs, and reduce operational costs. Now, artificial intelligence (AI) – the ability of computer-driven machines to think and execute tasks like intelligent beings – is a cornerstone of the energy sectors of the United Arab Emirates (UAE) and Saudi Arabia.
Together with AI, these countries are also deploying big data analytics to obtain real-time information on oil and gas operations; Internet of Things to connect and communicate people with industrial equipment and computer devices; and robots and drones to prospect new fossil fuel deposits and conduct inspections, to name a few technological changes. While the use of advanced technologies is on the rise across the Gulf Cooperation Council member-states, the UAE and Saudi Arabia have emerged as regional leaders in adopting AI and other digital know-how.
The UAE and Saudi Arabia are pioneers of the Arab world in embracing the so-called Fourth Industrial Revolution, driven by rising automation and communication of smart machines.
Indeed, the UAE and Saudi Arabia are pioneers of the Arab world in embracing the so-called Fourth Industrial Revolution, which is driven by rising automation and communication of smart machines and robotics that replace traditional industrial practices.
The UAE created the world’s first AI university in Abu Dhabi in 2019. That same year, Saudi Arabia established a new government institution called the Saudi Data and Artificial Intelligence Authority (SDAIA) to oversee the country’s AI strategy and inform people about AI. For both Saudi Arabia and the UAE, AI serves a dual purpose of making fossil fuel production more efficient and less costly, while building a technology-based economy over the long-term as these countries seek to rely less and less on income derived from oil and gas exports.
Traditional oil and gas sectors in the UAE and Saudi Arabia, where oil exports still constitute more than 70 percent of their annual government revenues, are expected to undergo major changes as they integrate AI into the entire value change of energy development – exploration, production, transportation, distribution, and sales.
As a regional groundbreaker in the use of advanced technologies, the UAE has taken advantage of AI, blockchain, and data analysis to maximize efficiency, profitability, and safety of oil prospecting, production, maintenance, storage, and transportation. The Abu Dhabi National Oil Company (ADNOC), an Emirati energy giant, is collaborating with European and American companies to use unmanned drones for conducting seismic studies to find new hydrocarbon deposits as well as to collect and use real-time data for assessing the condition of operational equipment and predicting maintenance needs.
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Since 2018, the state-run ADNOC has been working with IBM to create a computerized accounting program that tracks, authenticates, and completes transactions between its subsidiaries. ADNOC is also investing in promoting technological and scientific educational programs in the UAE. In October, the company kickstarted a joint venture to develop AI products that would make energy development more efficient, more profitable, and safer.
Microsoft opened its first ever AI Center for Energy Studies in Dubai this year to develop technological know-how for the energy industry.
This is consistent with the UAE’s effort to develop and use state-of-the-art technologies to maintain the productivity of its energy industry. Accordingly, Microsoft opened its first ever AI Center for Energy Studies in Dubai this year to develop technological know-how for the energy industry.
Saudi Arabia is also deploying advanced technologies to improve cost saving and operational efficiencies of its energy sector. The state-run oil company Saudi Aramco is aiming to become the world’s leading hi-tech energy business to economically and sustainably produce oil and gas. Last year, the company turned an office building in Dhahran to a 4IR (Fourth Industrial Revolution) center to help hone the technical expertise of its employees, develop advanced technological solutions for oil production, and improve the company’s operational activities to detect flares of methane gas (a primary component of natural gas that is released as a byproduct of oil extraction) and any malfunctions. Saudi Aramco is also digitizing its commercial activities, such as bidding, contract management, and selling.
At the same time, Crown Prince Mohammed bin Salman (MbS) is pushing to make AI a critical part of his Vision 2030 economic reform plan to reduce reliance on oil income and increase production of renewable energy. As he seeks to diversify the oil-based Saudi economy, he wants to position his country as a future global technology hub. According to MbS, everything will be connected to AI in his ambitious future hi-tech city of Neom on the Red Sea coast, which is expected to be built in the next decade. AI will also be important in harnessing solar and wind energy, as the Saudi government aims to meet 50 percent of its electricity needs through renewables by 2030.
Energy analysts expect that digitization and automation of the fossil fuel industry will further accelerate in oil producing countries in the Gulf.
Due to the collapse of global oil prices since 2016, which has taken another hit since the onset of the COVID-19 pandemic this spring – after recovering somewhat in 2018, energy analysts expect that digitization and automation of the fossil fuel industry will further accelerate in oil producing countries in the Gulf, including the UAE and Saudi Arabia.
The low oil price environment calls for more operational efficiencies and reduced production costs to keep fossil fuel companies in business. This will likely fundamentally reshape the oil and gas sectors of these countries as they speed up the transition from labor-intensive processes toward more automation and technological solutions.
However, the Gulf nations face a challenge of improving the technological skills of their workforce and creating enough jobs for the growing number of unemployed young people in the region, which has been a problem long before the rise of advanced technologies.
Unemployment will likely be an even bigger predicament for the rising population of the Gulf countries as technology replaces human labor in major economic sectors, such as energy, that have traditionally employed many people.