Artificial intelligence refers to the ability of machines to perform cognitive functions normally associated with humans such as learning, decision making, problem solving, perception and decision making. In oil and gas industry, AI is being used for various applications such as predictive maintenance, production optimization, supply chain and logistics optimization, risk management, autonomous drones, digital assistant, exploration and drilling etc. AI helps in accurately predicting equipment failures and scheduling maintenance accordingly, facilitating precise production planning, route optimization for transferring oil and gas, analyzing risk patterns and mitigating hazards, mapping terrain using drones and robots and automating exploration process. It enhances productivity, reduces costs and improves safety in oil and gas operations. The Global Artificial Intelligence (AI) in Oil and Gas Market is estimated to be valued at US$ 2.99 billion in 2024 and is expected to exhibit a CAGR of 12% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the artificial intelligence (AI) oil and gas market are Google, IBM, SAS, Accenture Plc., Baidu, Inc., H2O.ai., Microsoft Corporation, Oracle Corporation. Google provides AI tools like TensorFlow and Kubernetes for oil and gas applications. IBM offers Watson for oil and gas industry to improve productivity, efficiency and safety.
Growing energy demand across Artificial Intelligence (AI) in Oil and Gas Market Demand the globe is propelling the oil and gas industry to adopt AI solutions to ramp up production and exploration activities. AI helps oil and gas companies to access remote reservoirs, optimize field performance, predict equipment failures and inspect infrastructure in a cost effective manner.
Advent of technologies like machine learning, deep learning, predictive analytics and Internet of Things (IoT) has opened up new opportunities for AI deployment in oil and gas industry. Oil and gas companies are investing heavily in AI startups and collaborating with technology players to develop industry specific AI solutions. This is encouraging innovation and advancing the capabilities of AI systems in oil and gas domain.
Market Trends
Edge/Fog computing in oil & gas : Edge and fog computing technologies are gaining traction as they enable AI processing near oil rigs and fields in real-time without latency issues. This helps in autonomous operations.
Converting raw data into insights: Oil companies are focusing on converting raw sensor and operational data into useful insights using AI. Techniques like predictive maintenance and production optimization are becoming common.
Collaborations between oil and tech firms: Partnerships between oil majors and AI firms are accelerating development of customized AI systems for upstream, midstream and downstream functions like exploration, drilling, transportation etc.
Market Opportunities
Safety and risk management: AI can analyze vast amounts of operational data to identify risk patterns, predict hazards and aid decision making to enhance workforce safety.
Renewable energy transition: Oil companies are exploring use of AI in diverse areas like carbon sequestration, renewable energy production, green hydrogen to transition to low carbon future.
Upstream exploration: Technologies like autonomous robots, drones and seismic-data analysis using AI/ML are expected to transform exploration processes and make new reserves accessible.
Impact of COVID-19 on Artificial Intelligence (AI) in Oil and Gas Market Growth
The outbreak of COVID-19 pandemic has significantly impacted the growth of artificial intelligence in oil and gas market. The lockdowns imposed across various countries led to decline in oil demand and decline in oil prices. This reduced the capital expenditure of oil and gas companies on new technologies like artificial intelligence. However, as oil and gas companies aimed to improve productivity and optimize operations with limited workforce, they increased focus on implementing AI solutions. Contactless operations and remote asset management became more important. Post pandemic, as oil demand recovers with economic activities resuming, AI adoption is expected to grow significantly. Oil and gas companies will focus on leveraging AI to improve efficiency, optimize production and supply chain management. Advance AI technologies like predictive maintenance will help reduce downtime and operational costs. Companies will need to plan strategies for seamless transition to new digital ways of working and asset management.
Geographical Regions with Highest Value Concentration in AI in Oil and Gas Market
North America region holds the highest value concentration in artificial intelligence in oil and gas market currently. This is mainly due to presence of major oil and gas producers and technology companies in countries like United States and Canada. The companies in the region are leaders in adopting new digital technologies and have been early adopters of AI solutions. High focus on productivity improvement, asset performance optimization and autonomous operations have propelled AI investments in North America. Another major region is Middle East countries with national oil companies at the forefront of digitization and IoT implementations. Countries like Saudi Arabia, UAE, Kuwait etc. offer huge opportunities for AI companies due to ongoing technology modernization projects in oil and gas sector.
Fastest Growing Region for AI in Oil and Gas Market
Asia Pacific region is expected to witness the fastest growth in artificial intelligence in oil and gas market during the forecast period. This is due to rapidly expanding oil and gas industry across countries like China, India along with rising focus on digital transformation. National oil companies and independent oil producers in the region are investing heavily in remote and autonomous operations to gain efficiencies. Advancing digital infrastructure is also supporting AI deployments.Furthermore, presence of global technology giants and local AI startups are fostering innovations. Countries like China provide huge market opportunity with large scale smart fields and refinery projects undergoing digitization. Overall, immense potential for productivity and safety improvements make Asia Pacific the fastest growing region for AI in oil and gas market.
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