By Mike Allan, Xodus
As the global energy industry continues its transition toward greater sustainability, the value of digital technology and artificial intelligence (AI) in achieving operational excellence is becoming ever more evident. Digital transformation has the potential to revolutionize operations—improving production efficiency, reducing costs and enhancing real-time decision-making. Yet, this transformation isn’t without its potential pitfalls. While digitizing a robust process can multiply its effectiveness, integrating technology into a poorly structured system risks magnifying inefficiencies, leading to costly mistakes.
AI challenges
Despite its vast resources, the Middle East faces significant operational challenges as it works to meet rising global demand, while adhering to sustainability goals. Given the region's extensive energy infrastructure, it is particularly well positioned to benefit from digital transformation opportunities.
Although AI has shown great promise in certain parts of the sector to date, applying it to other operational settings presents unique challenges. For instance, maintenance and integrity operations or midstream logistics, which involve inconsistent free text fields and variable naming conventions, may not yet have the data infrastructure necessary to fully leverage AI's capabilities.
In addition, a siloed approach to technology adoption, where new solutions are implemented in isolation, can lead to data bottlenecks that hamper operations. Addressing these challenges will require more than just technological investment; it will demand a deep understanding of existing workflows and pain points.
Crucially, the industry must take the time to create the solid foundations on which AI will be built and implemented. To find the optimal digital solutions, it takes resources and people with the foresight needed to deliver the transformation. The industry must take a holistic systems approach, which may mean higher investment up front, but ultimately increased efficiencies in the long run.
It is also essential to understand that a new digital system is not a silver bullet. A lot of the AI success stories to date have tended to be in pockets of the energy industry that are data mature, such as the subsurface sector, but not all areas of operations are quite there yet. Each aspect of the industry is on its own timeline and should not be rushed to meet an undefined agenda.
The next step for the energy industry, and in particular the Middle East, is increased efforts in aligning data. Taking the time to do this will allow the timely uptake of digital developments that have already occurred in mature sectors, meaning best practice can be applied as and when it is appropriate.
The black box nature of some AI solutions does not sit comfortably with many engineers responsible for implementing the outcomes being suggested by the AI tools. It is important that this is acknowledged, and AI is applied in a manner that is best suited to the company and asset. This may mean applying AI to traditional analysis methods to make them more efficient and insightful while still retaining the ability to interrogate the solution, rather than the blanket adoption of a proposed system. These steps are necessary, allowing progress, yet still ensuring people come along on the digitalization journey.
Strategies moving forward
Global energy consultancy Xodus has formulated digital optimization methods to enable asset managers to make the right decisions and improve performance—minimizing fuel consumption, reducing emissions and maximizing production.
Xodus has gained insight into the pain-points companies encounter on the digitalization journey, meaning it can better advise on the steps forward needed, delivering near-term value while setting up for long-term success.
The Xodus team often sees companies taking one of two approaches, a scatter gun tack with every department running off in its own direction or just one single team trying to implement an "everything for everyone" solution. The answer lies somewhere in between, and the Middle East represents a key opportunity for companies to create an environment of collaboration, where expertise and insights are shared to drive the digital transformation forward.
If the Middle East successfully harnesses AI and digitalization, it will undoubtedly spark transformative change on a global scale, driving efficiencies that will benefit the entire energy sector, from major operators to smaller suppliers. The UAE, in particular, has the unique potential to lead this evolution at a faster pace than anywhere else in the world.
