Abu Dhabi National Oil Company (ADNOC), through a new agreement with OpenAI and technology group G42, aims to create a transformation in the oil industry and energy economy. This agreement was announced on November 2 at the ADIPEC energy exhibition, and if its goals are achieved, it could change decision-making in one of the world's most complex industries.
Developing Oil Fields with Artificial Intelligence
The United Arab Emirates intends to transform the processes of field development, investment, transportation, and sales into a connected decision-making system with the help of artificial intelligence. Thus, competition in the oil industry will no longer be solely based on the volume of reserves or production capacity, but will depend on the speed and quality of converting information into economic decisions.
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ADNOC has announced that it will be the first active company in the energy industry to use the OpenAI Frontier platform to coordinate artificial intelligence factors in its extensive operations. The goal of this project is to reduce the time required to prepare and optimize the comprehensive development plan of fields from several months to just a few hours. This timeline is currently a stated goal and has not yet been confirmed on an operational scale.
Benefits of Artificial Intelligence in Decision-Making
Developing oil fields requires complex decisions that depend on geological, engineering, and financial data. ADNOC's new system is capable of analyzing information from decades of activity, thousands of wells, and hundreds of facilities simultaneously, and instead of optimizing each section separately, it proposes the most economical scenario for the entire field.
The second part of this agreement aims to achieve a more accurate assessment of the economic value of each barrel of oil by combining production, refining, transportation, sales, and trading information with supply and demand forecasting. This new model calculates the value of oil barrels based on multiple factors such as product quality and transportation costs.
Sultan Al Jaber, CEO of ADNOC, announced in his speech at ADIPEC that nearly one billion barrels of global oil reserves have been consumed, and the share of transportation and logistics costs from the cost of a barrel has risen from less than 5% to over 30%. This statistic highlights the importance of decision-making regarding transportation routes and sales timing, which can be as significant as production itself.
Ultimately, this agreement is part of the UAE's effort to turn oil wealth into a technological advantage. ADNOC has previously utilized smart technologies and is now seeking to create a coordinated system for better exploitation of oil resources.
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