Saudi Aramco’s non-fuel future

At Aramco’s headquarters, the training facilities include a virtual reality model of the Shaybah oilfield that takes people inside the well, 5,000 feet below the desert floor. (Courtesy of Aramco)
Updated 15 May 2018

Saudi Aramco’s non-fuel future

  • Aramco wants to rank itself among the hi-tech industrial giants of the digital age, using its huge resources in oil and gas for much more than simply burning in car engines.
  • Oil major looking to use technology to optimize production and boost downstream investments, while preparing for the post oil-era

DHAHRAN: You are deep inside the field of dreams watching tendrils of bright green snaking through the red world that envelopes you, while small black balls rush through tubes leading up to the surface 7,000 feet above your head. A psychedelic dream? A scene from a science-fiction movie? Neither of these. Welcome to the Geosteering Operations Center (GOC) at the headquarters of Saudi Aramco in Dhahran in the Kingdom’s eastern province.
The “field of dreams” — so described by American oil geologists when it was found in the 1940s — is Ghawar, the largest onshore oil field in the world; the green fingers are the multi-branch drill lines that reach out for each available drop of oil; the black balls represent nano-molecules of advanced ingredients to ease the flow of crude to the desert well-heads.
Aramco’s state-of-the-art technology allows you, via a virtual reality headset, to look deep inside the well that supplies something like half of the 9.9 million barrels of crude the Kingdom produces every day.
You are able to experience what it’s like deep inside an oil well thanks mainly to two bits of tech — geosteering and billion cell simulation — that enable the technicians and engineers who man the center to keep the wells running at optimum efficiency and to exploit every last barrel of the Kingdom’s most precious resource.
These workers refer to themselves as “Aramcons,” and all around Aramco HQ is evidence of the central role they have played in the country’s economic development since oil was discovered at Dammam well number 7 some 80 years ago.
The “Prosperity Well” that first produced oil in 1938 is memorialized nearby; there are old derricks that still look usable on the slopes of Dammam Dome; and the longer-serving Aramcons offer the opinion that there are still significant amounts of crude beneath our feet.
Whether it will ever be pumped again — when Saudi Arabia has the biggest and most productive fields in the world elsewhere in the Kingdom — is another matter.
But in 2018 Aramco is looking to ensure future prosperity by getting away from the old image as a mere pumper of crude. These days, as a look around Dhahran makes clear, the company wants to rank itself among the hi-tech industrial giants of the digital age, using its huge resources in oil and gas for much more than simply burning in car engines.
It wants to optimize upstream operations so that Aramco crude can be produced and shipped in the most efficient way possible in a volatile oil market. Despite the advance of US shale production, Saudi Arabia remains the world’s biggest exporter of crude, so the speed with which it can adjust to changing global demand is crucial.
It also wants to prioritize the downstream element of its business. Aramco is the sixth biggest refiner of crude oil in the world, but most of this capacity is still producing petrol for vehicle engines. Aramco would like to increase the amount of non-fuel products it makes, the higher value-added products such as petrochemicals and other industrial materials.
Just last week it announced plans to develop a $44 billion refinery and petrochemical complex in India, amid other reports that it was planning a multibillion-dollar expansion of its Motiva refinery in Texas to boost its non-fuel capacity there.
The third element of the strategy is in sustainability, using its resources in conventional oil and gas to meet future environmental requirements and prepare for the age when the internal combustion engine has
had its day. Through six research centers around the world, Aramco is pioneering new techniques in fuel and engine technology to prepare for the end of the oil age, whenever that may come.
There is another imperative driving the move toward hi-tech and new non-fuel products, which more financially-minded Aramcons acknowledge is a key element of the overall strategy. Aramco is in the midst of preparing for the biggest stock market flotation in history, with an early official estimate setting a valuation of $2 trillion on it, making it by far the most valuable company in the world.
Some experts have doubted it can reach that valuation via whatever kind of IPO is eventually decided on, whether on international markets or on the Saudi stock exchange.
But it is beyond dispute that financial markets rate technology companies more highly than oil companies. Shares in Exxon Mobil, the biggest independent oil company, are valued at a multiple of their earnings in the high teens; Google owner Alphabet — perhaps the archetypal digital company — commands a rating in the high 20s.
It is only one of the variables that can help boost the IPO valuation. The level of dividend payments is another crucial one, as is the valuation of Aramco’s oil reserves and the efficiency with which it can keep exploiting them.
In Dhahran HQ, the focus is on the latter. In the GOC, a giant digital screen shows a map of the Arabian peninsula, with Aramco’s wells picked out in cyphers. Sensors on the tip of the drill lines relay real-time information about the conditions underground, allowing technicians and engineers to adapt the rate of production according to geological and commercial conditions. When people talk about Saudi Arabia turning the oil taps on or off, this is where it would actually be done.
They monitor 90 wells simultaneously, steering the drill lines toward exploitable reserves thousands of feet underground, which they can see in 3D imagery thanks to the billion cell simulations technology that Aramco itself developed. Even more powerful simulation capacity is on the way.
A short walk away is OSPAS, the oil supply planning and scheduling center, which is really the nerve center of the entire Saudi oil industry. OSPAS makes NASA’s mission control in Houston look quaint. Gigantic digital screens, each around 10m wide, cover the walls, showing where oil and gas is being produced at that precise moment right across the Kingdom. It tells the technicians where is it being treated in GOSPS — gas and oil separation plants — and where it is being shipped via pipeline and roads around the country to refineries on the east and west coasts.
One Aramcon joked that it showed him how much it cost to fill up in nearby Alkhobar that morning.
Another set of screens sets out, again in real time, the condition of the tankers pulling into the Kingdom’s oil ports — which are still at sea a couple of days away, which are being loaded in port, and which are sailing away down the Arabian Gulf.
A third display shows the exact situation of the entire Saudi electricity grid and the power requirements of Aramco operations. In addition to fueling its own plans, the company also makes a major contribution to the national grid.
But it is not all hi-tech. In EXPEC — the exploration and petroleum engineering center — they have real samples of the substances that made the entire thing possible — row upon row of drilled core samples.
An enthusiastic senior engineer explains the different qualities that made eastern Saudi Arabia the richest oil center in the world. He handles rock samples millions of years old with loving affection, pointing out the gradations of porosity and permeability that gave Saudi crude its unique qualities.
A few minutes later, a younger Aramcon explains, equally enthusiastically, how the entire core collection, going back to the first test drills in the 1930s, has been digitalized for permanent computer storage and electronic access. With a flick of his finger on a screen, he picks out a 30-year-old sample from 3,000 feet below the surface. Less Dammam Dome, more like Silicon Valley. 

Saudi Arabia signs AI agreements with IBM, Alibaba and Huawei

Updated 52 min 29 sec ago

Saudi Arabia signs AI agreements with IBM, Alibaba and Huawei

  • Deal with Alibaba cloud will 'help Saudi Arabia’s journey to develop world-class smart cities'

RIYADH: The Saudi Data and Artificial Intelligence Authority (SDAIA) signed three agreements with IBM, Alibaba and Huawei on Thursday.

The memorandums of understanding came on the second day of the  Global AI Summit being held in the Kingdom.

The deal with Alibaba Cloud is designed to “empower Saudi cities with intelligence-driven smart city solutions,” Saudi Press Agency reported. 

The partnership will support Saudi Arabia’s journey to develop world-class smart cities.

SDAIA and Alibaba Cloud will work together to develop digital and AI solutions in safety and security, mobility, urban planning, energy, education, health, among others.

“Saudi Arabia’s Vision 2030 has clear goals to transform KSA cities into smart ones by unlocking the value of city data as a national asset to realize Vision 2030 aspirations,” SDAIA president Abdullah bin Sharaf Al-Ghandi, said.

“Our journey to creating smart cities that rank among the smartest in the world is already well underway with Riyadh City. 

This partnership with Alibaba Cloud will support the acceleration of the transformation of our cities, through enabling intelligence-driven technologies and AI techniques that will fuel sustainable economic development and a high quality of life to our citizens.”

Phillip Liu, General Manager of Middle East and Africa, Alibaba Cloud Intelligence, said: “We are proud to bring Alibaba Cloud’s proven cloud and AI products as well as our global experiences and to combine these with the expertise from SDAIA.”