Gulf oil and gas firms seek big advantage from AI

The Gulf’s oil and gas sector has been transformed by AI advances during the past few years, marking a dramatic technological shift in an industry that comprises a huge share of the region’s GDP.

That reflects a global adjustment: Worldwide, Rystad Energy estimates that AI and digitalization will save upstream oil and gas companies close to USD 500 bn between 2026 and 2030 through a mix of greater efficiency, reduced drilling downtime, and increased oil recovery.

But the shift is especially prominent in the Gulf, where gargantuan state-run oil companies and vast energy reserves are paired with rapidly expanding national AI champions and governments that are banking on AI as the next big driver of their economies.

“We have a slogan: ‘energy for AI and AI for energy.’ We don’t look at these as two separate things,” Saravan Penubarthi, chief technology officer at AIQ, tells EnterpriseAM. “Our AI systems optimize energy output, while, at the same time, energy runs our AI systems.”

The biggest test case: AIQ is a joint venture between Abu Dhabi’s national oil company, ADNOC, and Presight, a listed unit of the UAE’s AI champion, G42. It’s perhaps the clearest example of the symbiosis Gulf nations are trying to create between their historic economic driver — fossil fuels — and their big new investment — AI.

The company’s broad premise: That it can pilot large-scale AI systems at ADNOC, which has a crude oil production capacity of about 4.85 mn barrels per day, then sell those systems to other companies, confident that they’re already producing results at one of the world’s largest oil firms.

• It’s done that with several AI products during the six years since the company launched, including RoboWell. The system automates well processes, including the amount of gas that’s injected and the amount of oil that’s extracted from wells. RoboWell has been deployed at roughly 550 wells worldwide, resulting in increased operating efficiency of about 5% per well, Saravan says.
• In another move, AIQ and ADNOC’s gas division announced an agreement with Gecko Robotics to deploy AI and robotics across ADNOC gas facilities. The companies expect the program to generate over USD 300 mn in cost savings over the next five years through predictive maintenance, fewer shutdowns, and other efficiency improvements.

Big picture: AI allowed ADNOC to make new oil and gas discoveries totaling more than 1.2 bn barrels of oil equivalent, per a report from its board.

Coming soon: AIQ is currently testing a new product called Genesis on ADNOC systems, which Saravan describes as its most industry-shifting AI technology to date. While previous AIQ products have focused on automating particular aspects of oil production, Genesis is capable of automating data extraction, analysis, and visualization across an entire company, Saravan says.

“It pretty much does the entire orchestration for the energy industry to automate your analysis and visualization and help you with better decision-making,” he says, adding, “I believe two years from now, the entire analysis and visualization [across the oil and gas sector] will be automated with AI.” Saravan declined to get more specific about Genesis’s capabilities ahead of the product’s public launch at Abu Dhabi’s annual ADIPEC conference in November.

AIQ reflects the Gulf’s strategic advantage when it comes to linking AI with fossil fuels. But it’s not the only player.

Saudi state-run oil firm Aramco captured USD 1.8 bn in value from AI in 2024, the company says. It then went on to record what it says was USD 5.3 bn in value from AI and other technologies in 2025, according to its annual report. Aramco declined to comment for this story.

BY THE NUMBERS-

• Aramco has identified a total of 442 uses for AI, more than 200 of which it had already addressed with AI tools by late 2025, the company says.
• Among other processes, it’s using AI to analyze drilling operations and examine geological data “to simulate reservoirs and help engineers make better-informed decisions.”
• Aramco and the Kingdom’s Public Investment Fund took the first step toward Aramco becoming a significant minority shareholder in Saudi Arabia’s AI champion Humain in October 2025. The agreement envisions Aramco sharing its AI assets with Humain and ultimately using Humain’s AI infrastructure to build industrial applications.

SOUND SMART- Saudi ❤️ Chinese AI? While UAE AI players have been forced to turn their backs on Chinese AI tech as a condition of getting access to the latest US chips, Aramco’s venture unit, Prosperity7, hasn’t faced the same pushback. P7 is an investor in Zhipu AI, since rebranded as Z.ai, which made headlines this summer with GLM-5.3, held out by many as China’s closest rival to the US frontier labs in AI coding and cybersecurity — for a fraction of what Claude and ChatGPT sell for. Prosperity7 wrote a USD 30 mn check in early 2024, becoming the first known foreign backer of a major Chinese AI lab. It still holds about 1.1% of the company, according to our math, following Z.ai’s listing in Hong Kong this past January. After a wild run in the stock, that stake is still worth north of USD 800 mn on paper. Z.ai shares are down about 75% since June and P7 is locked up until January 2027.

“Every major energy company is chasing AI right now. What’s harder to replicate is what several MENA producers have: enormous asset portfolios, patient long-term capital, and genuine alignment between national policy and corporate strategy,” Baron Lamarré, an oil and gas expert and former oil trader for Petronas, Malaysia’s state-owned oil firm, tells EnterpriseAM. “That combination lets them deploy at enterprise scale faster than most international competitors can manage,” says Lamarré, who co-founded the International Digital Exchange, a blockchain-based platform for oil and gas trading.

Important caveats: Oil and gas firms are notorious for their messy data, industry insiders say. Data from sensors and other technology is often gathered and stored separately by different parts of the same company, often in different file formats — and rarely shared between divisions.

That makes it far more challenging to gather all the necessary data to train AI systems. When AIQ sells its products to other companies, its engineers spend an average of 100 days on-site, mapping and consolidating the company’s data sources and training AI systems, Saravan says.

There’s also an especially high cost for errors in the field because an oil well that’s mismanaged or offline could cost mns of USD in revenue. “A wrong answer from ChatGPT is cute, but a wrong decision in the oil and gas space can be catastrophic,” Saravan says.

This shift comes as Gulf nations are making massive investments in AI, looking to diversify their economies and to hedge against the possibility of losing both income and global sway if the planet shifts toward renewable energy and away from fossil fuels.

AI is projected to contribute USD 100 bn or more to both the Saudi and UAE economies by 2030, according to the consultancy PwC, or around 13% of GDP.

Hydrocarbons, meanwhile, currently account for around 47% of Saudi Arabia’s GDP and 22% of the UAE’s, according to the World Bank’s 2025 Gulf Economic Update. (A separate report from the International Monetary Fund using different accounting practices found that hydrocarbons accounted for just 24% of Saudi’s GDP.) Both governments say they expect oil’s share to keep shrinking.

These AI investments also come as global oil markets are being rocked by the Iran war and the ongoing closure of the Strait of Hormuz. Net income for ADNOC’s gas division dropped 52% y-o-y in 2Q 2026 amid the closure of the Strait, EnterpriseAM reports. Saudi Arabia, meanwhile, saw a 33% spike in profits during the war due to a mix of higher energy prices and alternate paths to ship oil out of the country, The New York Times reports.

AI investments are unlikely to meaningfully affect how oil companies respond to the Strait closure, because those investments pay off over a longer time frame, analysts say. But the closure does underscore the importance of long-term investments in technological improvements to hedge against volatility.

“The Strait of Hormuz is topical. It’s newsy, but it’s not affecting capital investment because that’s not [oil companies’] lens. Their lens is zoomed out,” Brian Spector, CEO of Assure, a company that designs AI tools for energy firms, tells EnterpriseAM.

Longer term, there’s also potential for AI to transform the basic science of drilling, allowing companies to profitably extract far more oil from wells than they have in the past.

Companies typically leave about two-thirds of a field’s oil in the ground. A reservoir’s natural pressure pushes out maybe 5-15%, and pumping in water or gas to keep it flowing brings the total to about a third. Injecting CO2, steam, or chemicals can take recovery past 50%, but it’s expensive — and the environmental impact significant. Analysts speculate that AI could meaningfully increase that yield.

“Squeezing that oil out of reservoirs would be game-changing stuff,” Chuck Yates, a longtime US energy finance executive and founder of Collide, which sells AI software to oil and gas firms, tells EnterpriseAM.