June 24, 2024

Aramco Leverages AI and Big Data for Profit Optimization, According to Senior Executive

Last Updated on March 19, 2024 by Saad Farooq

A top official at Saudi oil giant Aramco told Reuters that the company is expanding its AI and big data section, which connects its assets to optimize profit and helps with trading and acquisition decisions.

Aramco’s executive vice president for products and customers, Yasser Mufti, stated that they currently have seventy people working on this project and want to add more.

AI And Big Data: Aramco’s Approach To Optimizing Profit

Aramco wants to invest in ways that more accurately represent its wide-ranging presence and enable it to react to developments in the market more quickly. Moreover, Aramco is doing asset-specific studies to increase profits.

According to Mufti, Aramco is still looking into possible trades, such as the acquisition of a portion of the retail company Gas & Oil Pakistan this week, as well as refineries in Asia.

After a series of investments in Chinese refineries, Aramco listed shares of its base oil unit Luberef and bought a stake in the liquefied natural gas company MidOcean Energy as part of a larger push into gas. It is also reportedly in talks to buy a stake in Shandong Yulong Petrochemical.

Oliver Wyman, who provided project advice, estimates that more advanced commercial models, such as the Global Optimizer, can convert into $1.5–$2 per barrel of higher earnings before interest and taxes when compared to more traditional models.

According to Mufti, they had significantly increased their ability to trade, optimize, manage risk, and deal with unpredictability. The use of premium assets and a business-oriented approach, he continued, might raise these figures to the upper end of that range, if not above it.

LSEG data shows that analysts expect Aramco’s net profit to drop from $161.1 billion to $121.9 billion in 2023. The average rate for a barrel of Brent crude, which was trading at approximately $74.85 recently, is $82.33 this year, down from an average of about $99 last year.

Mufti clarified that when they make money and get returns from these endeavors, it creates a baseline that eventually becomes expected. As he said, the constant struggle is to maintain the maximum attainable recurring EBIT.

He added that certain refineries might still have unrealized potential but that there are probably “a handful of refineries” that are already using the Global Optimizer to the fullest extent possible in order to increase their revenues.

Aramco’s joint venture partners will gain from the increased profits in addition to increased shareholder returns, according to Mufti.

The head of oil and gas for India, the Middle East, and Africa at Oliver Wyman, Nadim Haddad, stated that Aramco’s size, M&A activity, and expansion into industries like retail make system optimization particularly appealing when it comes to identifying and seizing opportunities and generating value.

Takeaways

With its calculated investments in AI and big data, Aramco is demonstrating how to optimize profits in the ever-changing energy sector. Along with targeted asset-specific investigations and possible deals, the expansion of its specialized unit demonstrates Aramco’s commitment to remaining flexible in reaction to changes in the market.

Saad Farooq

Saad Farooq brings a blend of engineering prowess and a passion for writing to technewsme.com. As a tech engineer based in the vibrant tech landscape of the UAE, Saad has immersed himself in the latest technological advancements, making him an invaluable asset to our team. His deep understanding of tech intricacies comes from hands-on experience in the field, coupled with a genuine love for all things tech.

In his role at technewsme.com, Saad specializes in demystifying complex tech subjects, making them accessible and engaging for our readers. His articles are a reflection of his life in the UAE, a hub of technological innovation, offering a unique perspective on global tech trends and local developments. Whether it’s exploring new tech gadgets, delving into software innovations, or analyzing tech market trends, Saad’s writing is fueled by his extensive engineering background and his enthusiasm for sharing knowledge. Join him on a journey of discovery and insight into the world of technology, right from the heart of the UAE.

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