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bp has received final government ratification for its contract to invest in the redevelopment of several giant oil fields in Kirkuk, in the north of Iraq, following the agreement of terms in February

The contract between North Oil Company (NOC), North Gas Company (NGC) and bp includes the rehabilitation and redevelopment of the fields, spanning oil, gas, power and water with potential for investment in exploration.

“bp has a decades-long history in Iraq, and we look forward to building on this as we embark on our next chapter of production in the country,” said bp chief executive Murray Auchincloss. “From signing a memorandum of understanding last year to now fully completing our agreement, we’re looking forward to getting to work. Together with our partners, we aim to deliver world-class operations, combining deep local knowledge with our expertise in managing giant fields and safely executing major projects.

bp sees the project as an enormous opportunity aligning with its plans to ramp up oil and gas production and scale back renewables investments, as part of a revised growth strategy focusing more on hydrocarbons.

bp will now work under the guidance of the Government to set up a new operator – an unincorporated organisation comprising predominantly personnel from NOC and NGC, but also with secondees from bp – to prepare for the initial stages of development.

The agreement is for an initial phase that includes oil and gas production of more than 3bn barrels of oil equivalent. It includes the Baba and Avanah domes of the Kirkuk oil field and three adjacent fields in Federal Iraq – Bai Hassan, Jambur and Khabbaz – all of which are currently operated by the NOC. The wider resource opportunity across the contract and surrounding area is believed to include up to 20bn barrels of oil equivalent.

bp has a long history at Kirkuk, supporting NOC and the Iraq government on technical studies between 2013 and 2019 to explore the potential for redevelopment. It was also a member of the consortium of firms that discovered oil at Kirkuk in the 1920s.

LNG remains the dominant alternative marine fuel readily available to the shipping industry, according to Lloyd’s Register’s (LR) latest Fuel for Thought report

The report highlights LNG’s growing adoption and its cost-effectiveness under tightening emissions regulations, and the growth in orders for LNG-capable vessels, with an expanding global fleet and rapidly growing bunkering infrastructure. Currently, 14% of all vessels on order will have LNG dual-fuel engines installed.

The report forecasts that LNG will remain the most cost-effective fuel choice for foreseeable transition pathways up to 2049. LR’s modelling suggests that LNG-fuelled vessels could generate substantial compliance savings compared to ships running on very low sulphur fuel oil (VLSFO), with additional benefits from regulatory mechanisms such as pooling.

However, the report cautions that LNG’s long-term sustainability depends on tackling methane slip — unburned methane emissions that reduce its overall GHG advantage— and that its ability to meet stricter targets in the 2040s will depend on advances in cleaner LNG production, particularly through biomethane and synthetic e-LNG, as well as the development of onboard carbon capture technologies.

Panos Mitrou, LR’s global gas segment director, said, “As regulations emerge that place a real financial impact on greenhouse gas emissions, ship operators are realising that LNG is one of few low-carbon fuels to be available immediately, widely, with established safety protocols and at relatively predictable cost.

“There are several opportunities to improve the long-term sustainability of LNG. These are already being addressed, and the measures that are being worked on – from cleaner production and supply processes to bio-LNG and OCCS, through the uptake of onboard methane abatement technologies, as well as regulatory acceptance of these improvements – are likely to increase uptake of LNG even further.”

The report also highlights specific examples of innovation, such as the use of high-manganese steel for LNG tanks, which has significantly reduced costs while maintaining cryogenic handling properties. This technology has been successfully implemented in vessels like the Advantage Tankers LLC’s VLCCs, demonstrating the increasing uptake of LNG across diverse vessel segments.

Nick Potter, president & CEO of AET, said, “LNG is a key component of AET’s Decarbonisation Strategy, providing immediate emissions reductions while we also invest in net-zero carbon solutions. Through our tiered decarbonisation strategy, we are integrating energy efficiency technologies, innovative propulsion systems, and future fuel capabilities, including ammonia, to help meet our 2030 GHG emissions intensity target.

“While LNG is a viable option today, its long-term role will depend on developments in bio-LNG, synthetic LNG, and the commercial and regulatory landscape for fuels such as methanol, ammonia, and hydrogen. We see LNG as part of a multi-fuel future, complementing alternative energy sources as we move towards our 2050 net-zero goal as part of the MISC Group.”

As the world pivots towards a low-carbon future, the petrochemical industry finds itself at a crossroads, balancing growth prospects with evolving regulatory and sustainability challenges

The global energy transition is reshaping industries, compelling them to integrate clean energy solutions alongside their continued reliance on fossil fuels. While much of the focus has been on the deceleration of oil and gas consumption as primary energy sources, petrochemicals remain a critical segment with sustained demand projected well into the coming decades.

This sector, heavily dependent on fossil fuel-based feedstocks, produces essential chemicals that form the backbone of numerous industries, including plastics, fertilizers, and pharmaceuticals. Unlike transportation fuels, whose consumption forecasts have fluctuated, petrochemicals are expected to witness steady demand with fewer disruptions. The International Energy Agency (IEA) projects that petrochemicals will account for more than a third of oil demand growth by 2030, primarily driven by rising consumption in developing economies. In India, for example, demand for key petrochemicals such as ethylene and propylene is expected to increase two- to three-fold over the next two decades, fueled by urbanisation, industrial expansion, and the drive for decarbonisation.

Complex sustainability imperatives

However, this growth trajectory exists alongside increasing scrutiny of the industry’s environmental footprint. Governments and regulatory bodies worldwide are tightening climate policies, imposing restrictions on single-use plastics, and advancing circular economy initiatives. As a result, petrochemical producers must navigate complex sustainability imperatives while maintaining competitiveness.

The environmental impact of petrochemical production has become a focal point for policymakers, investors, and consumers. The industry accounts for approximately 18% of global industrial carbon emissions, with energy-intensive processes such as refining and steam cracking being major contributors. Key challenges include:
• Regulatory pressures: Carbon pricing mechanisms, plastic bans, and stricter emissions controls are being implemented globally, increasing production costs and pressuring profit margins.
• Circular economy and recycling: Advances in chemical recycling, biodegradable alternatives, and closed-loop manufacturing systems threaten to reduce reliance on virgin petrochemical feedstocks, reshaping traditional demand patterns.
• Investor sentiment: ESG-focused investment strategies are compelling oil majors and petrochemical producers to present credible decarbonisation roadmaps, with capital allocation increasingly favouring companies with sustainable practices.

To ensure long-term viability, petrochemical producers are exploring multiple strategic pathways:
• Feedstock diversification: Investments in bio-based and recycled feedstocks are gaining traction as companies seek to lower emissions and align with sustainability goals.
• Carbon capture and utilisation (CCU): The integration of CCU technologies is emerging as a key solution to mitigate emissions, though economic feasibility remains a challenge.
• Advanced materials innovation: Research into high-performance polymers, biodegradable plastics, and alternative chemicals is accelerating, offering new avenues for growth beyond conventional petrochemicals.
• Integration with renewable energy: Shifting production facilities towards renewable power sources and hydrogen-based processes is becoming a priority for reducing the sector’s carbon footprint.

The petrochemical industry stands at a pivotal juncture, balancing robust demand with the imperative to adapt to a rapidly evolving regulatory and sustainability landscape. While traditional growth drivers remain intact, companies that embrace innovation, diversify feedstocks, and integrate low-carbon solutions will emerge as industry leaders. The coming decade will serve as a litmus test for the sector’s resilience, ultimately shaping its role in a decarbonising world.

This article is authored by Synergy Consulting IFA.

In Part 2 of a two-part interview with Oil Review Middle East, Dany Rahal, SLB's head of digital for MENA, shares his insights on the transformative impact of AI and digital technologies in the oil and gas sector, AI adoption in the Middle East and the next evolution of AI

Having first worked in the Middle East in 2014, SLB’s Dany Rahal was pleasantly surprised at the progress the region has made in digital and AI adoption on his return to the region in 2022 as SLB’s head of digital for MENA. 

“Back in 2014, talking about cloud to national oil companies in the Middle East was not something that could be easily discussed,” he recalls. “Today, all the global hyperscalers are in the region – Microsoft, Google, AWS. The pace of investment from corporates and governments into digital and AI specifically, is increasing. Tech companies are coming into this space in the Middle East very, very fast. Now we can compare the region, in terms of adoption, to the US and China."

Nowhere is the opportunity greater than in the oil and gas sector, where AI and machine learning are transforming operations and helping operators to address their industry challenges.

“Our customers today want to reduce cycle times, reduce risks, increase returns and improve productivity. They want to reduce and optimise costs, and reduce emissions,” Rahal says. “These are the challenges. AI and ML today are revitalising industries worldwide, not just the energy sector, and we have a great opportunity in the energy and oil and gas sector to apply these technologies to bring value. For example, in terms of accelerating field development, planning, reducing operational risks around drilling, automating mundane, repetitive tasks and enabling production uptime.”

Key role of data

Rahal notes here the key role of data as the foundation for AI and Gen AI. “You cannot have a successful AI or GenAI implementation unless you have a clean data foundation that is ready to be consumed by AI or GenAI. It’s all about the data—both current and future—which has enormous potential to generate value for the industry, if it’s managed well.

“Oil, gas and energy operators generate terabytes of data, be it large size seismic data, be it production time series data or high frequency data. And in the Middle East, we have a lot of historical data, because it is home to a lot of ageing reservoirs. And client data can be scattered, in different databases in different formats.

So it is important that this data is cleaned and is available to be consumed by AI and domain workflows. This is a big focus for us at SLB.”

Scaling AI adoption

Scaling and democratising the adoption of AI is the next step, Rahal says. “Even though everyone is talking about AI, it is still really at the proof of value stage. Today, AI is mainly a tool in the hands of experts that is creating individual pockets of value. We haven’t really scaled AI adoption and deployment to enterprise level or across all the assets in the organisation. So the next evolution is, how do you democratise access to AI? How will you reimagine work so that these tools are available to everyone in the organisation, not only to the data scientists and the experts?”

Rahal refers to his earlier comments on SLB’s focus on talent upskilling, adding that the company is facilitating adoption by embedding AI in its software. SLB’s global footprint and its partnerships with technology providers are also helping in this regard.

“From a technology perspective, having large language models (LLM’s) that are energy-specific and trained in the language of energy is critical, so that they can deliver trusted energy-specific and robust answers. This is the big challenge today. In SLB we talk about engineered AI, where we marry the AI with domain knowledge and expertise to answer questions at the level of quality our customers have come to expect from SLB. We are working today on multiple topics around specific engineered AI. For example, we have a seismic foundation model trained on seismic data, which helps geophysicists in fault identification which leads to higher quality and a lot faster turnaround. So having AI engineered specifically for the domain is key to ensure that the next evolution of AI speaks the language of energy.”

Technology innovations

Turning to SLB’s technology innovations in the AI space, and how they are helping operators in the region, he highlights the Lumi™ data and AI platform which integrates advanced AI capabilities—including generative AI—with workflows across the energy value chain, unlocking access to high-quality data across subsurface, surface, planning and operations, increasing cross-domain collaboration and providing insights to improve the quality and speed of decision making at enterprise-level. “We are seeing a lot of success in the region in terms of customer interest and adoption, it really addresses what customers see as a foundational enabler for business transformation” he says.

SLB is at the same time augmenting their software by embedding and augmenting them with AI . For example, its Petrel™ subsurface software, which provides a full spectrum of geological workflows to solve the most complex geological and modelling challenges, has AI embedded to accelerate the work and improve the productivity of geoscientists, and there are at least 150 such examples across the organization.

“We’ve also embedded AI in our edge solutions,” Rahal notes. “So for example, in the case of chemical injection to address flow assurance issues and improve recovery, we can completely automate the chemical injection by controlling the timing and dosage. This can save on costs as well as the environmental impact.”

Rahal also highlights SLB’s Innovation Factori™ AI collaboration workspace, which aims to accelerate digital and AI adoption by bringing together SLB’s domain, data and AI experts together with customers to collaborate on developing tailored solutions addressing specific customer challenges, which can then be commercialised. “It’s a great concept.”
He adds that the Innovation Factori™ centre in Abu Dhabi, which opened in December 2022, has had great success with customers in the UAE and throughout MENA.
Rahal concludes that he is very optimistic about the future of digital adoption within the MENA region.

“As I mentioned, most of the production is coming from ageing reservoirs. Many of the customer wells and fields are not instrumented today. Data is still sitting in silos. So the opportunity is huge in terms of the value that we can bring, going forward. I see potential for growth across all domains.”

Now the question is, how do you bring all this AI expertise and technology into the operations space?

One area which he does specifically highlight is autonomous operations whether in the drilling or production domains. “We have had great success with one of the operators in the Middle East around autonomous drilling.

“We’re also working with a major operator in the region to deploy a smart production solution that leverages AI on the edge to optimise the customer’s operations without any human intervention.

“So there are a lot of great things happening in the Middle East. I’m very excited about this, and the growth prospects are amazing.”

See Dany's views on the essential ingredients for successful digital transformation here

Oil Review Middle East hosted a very well-attended webinar on 20 November on the future of offshore operations, in association with SAFEEN Group, part of AD Ports Group

The webinar explored the latest trends and challenges in the rapidly evolving world of offshore operations, focusing on groundbreaking innovations that are driving sustainable and efficient practices. In particular, it highlighted SAFEEN Green – a revolutionary unmanned surface vessel (USV), setting new benchmarks for sustainable and efficient maritime operations.

Erik Tonne, MD and head of Market Analysis at Clarksons, gave an overview of the offshore market, highlighting that current oil price levels are supportive for offshore developments, and global offshore capex is increasing strongly. The Middle East region will see significant capex increase over the coming years, with the need for rigs and vessels likely to remain high. Offshore wind is also seeing increased spending. Global rig activity is growing, while the subsea EPC backlog has never been higher, with regional EPC contracts seeing very high activity. Tonne forecast that demand for subsea vessels and other support vessels will continue to increase.

Tareq Abdulla Al Marzooqi, CEO SAFEEN Subsea, AD Ports Group, introduced SAFEEN Subsea, a joint venture with NMDC, which offers reliable and innovative survey, subsea and offshore solutions to support major offshore and EPC projects across the region. He highlighted the company’s commitment to sustainability, internationalisation and local content, and how it is a hub for innovations and new ideas, taking conceptual designs and converting them to commercial projects. A key project is SAFEEN Green, which offers an optimised inspection and survey solution.

Tareq Al Marzooqi and Ronald J Kraft, CTO, Sovereign Global Solutions ME and RC Dock Engineering BV. outlined the benefits and capabilities of SAFEEN Green as compared with commercial vessels, in terms of safety, efficiency, profitability and sustainability. It is 30-40% more efficient through the use of advanced technologies, provides a safer working environment given it is operated 24/7 remotely from a control centre, and offers swappable payload capacity. Vessels are containerised and can be transported easily to other regions. In terms of fuel consumption, the vessel is environment-friendly and highly competitive, reducing emissions by 90% compared with conventional vessels, with the ability to operate on 100% biofuel.

As for future plans, SAFEEN Green 2.0 is under development, which will be capable of carrying two inspection work-class ROVs simultaneously. A priority will be to collect data to create functional AI models for vessels and operations, with the first agent-controlled payload systems in prospect by around 2027.

To view the webinar, go to https://alaincharles.zoom.us/rec/share/mNHjZhAhQzn1sPzmFWZCgrq7_SckfLRcSb4w81I7aVlokO9sgHM_zVeOqgN3DgJS.bO4OIRqNeFP09SPu?startTime=1732095689000

Aramco has launched Saudi Arabia’s first CO₂ Direct Air Capture (DAC) test unit, capable of removing 12 tons of carbon dioxide per year from the atmosphere

Direct air capture (DAC) technologies extract CO₂ directly from the atmosphere at any location, for storage or utilisation, unlike carbon capture which is generally carried out at the point of emissions,. It is the most expensive application of carbon capture, although the IEA points out that Innovation in CO₂ use opportunities, including synthetic fuels, could drive down costs and provide a market for DAC. There are currently around 130 DAC facilities in various stages of development globally.

The Aramco pilot plant, developed in collaboration with Siemens Energy, will be used as a testing platform for next-generation CO₂ capture materials and will also seek to achieve cost reductions that could help accelerate the deployment of DAC technologies in the region. Aramco and Siemens Energy intend to continue working closely together with the aim of scaling up the technology, potentially leading to the establishment of large-scale DAC facilities in the future.

Carbon capture is a key pillar in Aramco’s ambition to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly-owned operated assets by 2050. The company is exploring options to capture CO₂ both at the point of emissions and directly from the atmosphere, through its circular carbon economy approach and the deployment of innovative technology solutions.

The launch of the DAC test facility follows the announcement in December 2024 that Aramco and its partners, Linde and SLB, had signed a shareholders’ agreement progressing the development of a Carbon Capture and Storage (CCS) hub in Jubail, set to be one of the largest in the world. Phase one of the CCS hub will have the capacity to capture nine million tonnes of CO₂ from three Aramco gas plants and other industrial sources, with the potential for expansion in later phases.

Ali A. Al-Meshari, Aramco senior vice president of Technology Oversight and Coordination, said, “Technologies that directly capture carbon dioxide from the air will likely play an important role in reducing greenhouse gas emissions moving forward, particularly in hard-to-abate sectors. The test facility launched by Aramco is a key step in our efforts to scale up viable DAC systems, for deployment in the Kingdom of Saudi Arabia and beyond. In addition to helping address emissions, the CO₂ extracted through this process can in turn be used to produce more sustainable chemicals and fuels.”

In December, King Abdullah Petroleum Studies and Research Center (KAPSARC) and Climeworks, a global leader in carbon dioxide removal technology, signed a Memorandum of Understanding (MoU) to jointly explore and advance Direct Air Capture (DAC) technologies within Saudi Arabia. The MoU outlines a roadmap to assess the deployment of new DAC systems in the Kingdom, focusing on availability of natural resources including subsurface CO₂ storage.