AI to double oil output, keep fossil fuels dominant: Aramco chief
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Saudi Aramco CEO Amin Nasser says AI and digitalization could double oil-well productivity and strengthen fossil fuel dominance.
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Amin Nasser, the chairman and CEO of the state-run oil giant Saudi Aramco, speaks at the World Energy Congress in Abu Dhabi, United Arab Emirates, Tuesday, Sept. 10, 2019 (AP)
Artificial intelligence and digitalization could double the productivity of oil wells, Saudi Aramco President and CEO Amin Nasser said on Tuesday, asserting that fossil fuels will remain a cornerstone of global energy for decades.
Speaking at the Future Investment Initiative (FII) conference in Riyadh, Nasser said Aramco is now reaping returns from tens of billions of dollars invested in computing and thousands of new data scientists.
“Most of the savings come from adopting AI and digitalization in the plants, in the assets themselves, because this is where you get the highest value,” he said. “If you drill a well and capitalize on AI and digitalization, you can increase productivity two times as much.”
This year’s FII, which highlights artificial intelligence as a central theme, also showcased Humain, a Saudi company developing generative AI tools and data centers, reflecting Riyadh’s broader effort to diversify beyond oil.
Nasser noted that AI could enhance oil exploration through better imaging and help cut emissions by detecting leaks and corrosion.
While renewables are expanding, with solar and wind power surpassing coal for the first time this year, according to energy think tank Ember, Nasser argued that oil and gas remain indispensable.
“We think oil and gas will continue to be a significant part of the energy mix for decades to come; that’s not going to change,” he said. “We see a lot of U-turns and policy changes now, realizing the importance of hydrocarbons.”
Aramco: Oil demand remains strong as markets eye Western sanctions on Russia
Saudi Aramco President and CEO Amin Nasser said that global demand for oil remains robust, even before the latest Western sanctions on Russia’s Rosneft and Lukoil take effect.
Addressing the conference attendees, Nasser remarked that it was still too early to gauge the potential market consequences, stating, “We have to wait and see what comes out of these sanctions.”
Lukoil, headquartered in Moscow, accounts for around 2% of global oil production, highlighting the potential significance of the restrictions on global supply and pricing dynamics.
Last week, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed new sanctions targeting Russia’s two largest oil companies, Rosneft and Lukoil, in a bid to increase economic pressure on Moscow and push for an end to the war in Ukraine.
The move comes as part of Washington’s broader strategy to cut off the Kremlin’s financial lifelines and degrade its ability to sustain military operations.
Dozens of subsidiaries added to sanctions list
Designated under Executive Order 14024, both Rosneft and Lukoil are being sanctioned for their alleged roles in operating within Russia’s energy sector. In addition to the parent companies, OFAC listed dozens of subsidiaries involved in oil and gas exploration, production, and refining across Russia.
Entities owned 50% or more, directly or indirectly, by Rosneft or Lukoil are now also blocked, even if not named individually. The full list includes refineries, exploration units, and regional oil producers throughout the Russian Federation.
OFAC warns of secondary sanctions for violators
As a result of the sanctions, all assets of the designated entities in the US jurisdiction are frozen, and US persons are generally prohibited from engaging in any transactions involving them.
OFAC warned foreign financial institutions and businesses of possible secondary sanctions if they facilitate significant transactions with any of the newly designated entities.
Sanctions violators, whether individuals or institutions, may face serious civil or criminal penalties under US law.
