The map of permeability distribution in the reservoirs is considered one of the most essential steps of the geologic model building due to its governing the fluid flow through the reservoir which makes it the most influential parameter on the history matching than other parameters. For that, it is the most petrophysical properties that are tuned during the history matching. Unfortunately, the prediction of the relationship between static petrophysics (porosity) and dynamic petrophysics (permeability) from conventional wells logs has a sophisticated problem to solve by conventional statistical methods for heterogeneous formations. For that, this paper examines the ability and performance of the artificial intelligence method in permeability prediction and compared its results with the flow zone indicator methods for a carbonate heterogeneous Iraqi formation. The methodology of the research can be Summarized by permeability was estimated by using two methods: Flow zone indicator and Artificial intelligence, two reservoir models are built, where the difference between them is in permeability method estimation, and the simulation run will be conducted on both of the models, and the permeability estimation methods will be examined by comparing their effect on the model history matching. The results showed that the model with permeability predicted by using artificial intelligence matched the observed data for different reservoir responses more accurately than the model with permeability predicted by the flow zone indicator method. That conclusion is represented by good matching between observed data and simulated results for all reservoir responses such for the artificial intelligence model than the flow zone indicator model.