According to a research report released by Booz Allen Hamilton (BAH), despite roadblocks to innovation, more oil and gas companies than ever are investing in new, innovative technologies, in addition to Renewables.
Shell leads the pack, with over $1.18 billion (Dh4.33 billion) spent per year on innovation, with Exxon Mobil, investing $1.02 billion annually on new technologies, as per BAH’s analysis.
Meanwhile, the Virginia-based consultancy estimates that Saudi Aramco will spend around $40 billion over the next decade, based on the oil giant’s commitments.
The majority of that investment will be allocated to upstream and offshore innovations.
BP is the third largest investor in innovation, spending an average of $646 million each year on developing and researching new technology.
Oil and gas firms in the Gulf region, which holds around a third of the world’s proven crude oil reserves, have been forced to improve their efficiencies through innovative technologies, following the crash in oil prices three years ago.
The amount of money committed to renewables, excluding large hydro-electric projects, rose to $285.9 billion, exceeding the previous record set in 2011, according to BAH.
In the Gulf, the climate and geography presents a unique set of challenges to companies trying to invest out of oil and gas and in to Renewables.
“Here in the UAE, this diversified mix is happening, but the challenge that you face with the humidity, heat and tough climate conditions has an impact across the whole chain of infrastructure you deploy outside,” said Adham B. Sleiman, vice-president of Booz Allen Hamilton.
“All technologies require testing and hardening in extreme conditions. That creates components that are a bit more expensive,” he added.