Iran and China Partner for AI-Driven Oil and Gas Production

---

Summary:

• Iran is collaborating with Chinese tech companies to leverage artificial intelligence (AI) for digitalizing oil and gas production, aiming for a 20% efficiency improvement, as part of its Seventh Development Plan to increase oil production and reduce costs.

---

Iran is set to initiate a collaborative effort with Chinese tech firms to implement artificial intelligence (AI) for the digitization of production processes in its oil and gas sectors, aiming for substantial reforms, as reported by Mehr News Agency on December 8. Mehdi Motahhari, the head of research and technology at the National Iranian Oil Company (NIOC), highlighted that AI would play a pivotal role across the entire value chain, encompassing exploration, drilling, production, and development. According to Motahhari, the Chinese-assessed project is expected to yield a 20% enhancement in efficiency.

NIOC’s chief, Mohsen Khojasteh-Mehr, has previously emphasized the need for 15 oil and gas fields to transition to an AI-oriented approach to mitigate production costs. Motahhari emphasized that AI applications would contribute to cost reduction, efficiency improvement, and output maximization in hydrocarbon fields.

In pursuit of its Seventh Development Plan, Iran aims to boost oil production to over 4.2 million barrels per day by early 2029, representing a nearly 24% increase from the current output of 3.4 million barrels per day. The plan also outlines a target for natural gas output to exceed 1.2 billion cubic meters per day, marking a growth of over 55% from the current 773 million cubic meters per day.

Motahhari stressed the potential cost savings of utilizing AI, stating that traditional production methods would incur significant expenses, whereas AI could result in savings amounting to hundreds of millions of dollars. The NIOC has already initiated “small experiments” with AI applications and has encouraged its subsidiaries to identify challenges in exploration, drilling, development, and production that can be addressed through modern technologies.

In mid-November, the NIOC signed a memorandum of understanding (MoU) with the Iranian Presidential Office’s department for science, technology, and technology-based economy to establish “the strategic center of AI and digital oil and gas fields.” Motahhari expressed optimism that an upcoming joint meeting with Chinese companies to enhance oil and gas fields through AI would mark the commencement of significant reforms in the petroleum industry.