The implementation of AI in oil and gas ecosystem has gained momentum in recent years, thereby changing the perception that this industry is not a great AI innovator. The increasing demand for energy has put pressure on manufacturers to focus more on discovering new oil wells. This, in turn, has encouraged the adoption of new technologies in the oil and gas industry.
Due to increasing challenges and complexities faced by the oil and gas industry in the exploration and exploitation of oil and hydrocarbons, the industry is gearing up to reshape its operations by integrating AI. This is going to give rise to the emergence of digital oilfields of the future, with radical changes in processes like exploration, drilling, inspection, and reservoir management. Further, the integration of AI will ensure improved operational performance and predictive maintenance.
The two main applications of AI in the oil and gas ecosystem are machine learning and data science. While the former enables computer systems to learn from and interpret data, the latter leverages AI to extract information and insights from data. In the oil and gas industry, machine learning allows effective monitoring of internal operations, as well as the detection of patterns. It also enables faster response to concerns that may not been easily identifiable by human operators.
On the other hand, data science can be used to get crucial insights from data, which in turn, can help discover new exploration opportunities and make the best use of the existing infrastructure. At present, AI in oil and gas ecosystem has found several important applications, right from surveying to planning and forecasting, excavation, drilling, predictive maintenance, facility management, and safety.
With declining cost of IoT sensors, the integration of sensors is expected to increase further in various upstream, midstream, and downstream operations of the oil & gas industry. During 2019 to 2020, the AI in oil and gas ecosystem is expected to grow at a CAGR of 16.2%. The growth of the market will be fueled by the increasing investment in AI by major oil and gas companies across the world.
For example, in January 2019, BP invested in Belmont Technology, a Houston-based technology startup, to strengthen its AI capabilities by developing a cloud-based geoscience platform known as “Sandy”. This platform helps BP in interpreting geology, geophysics, historic and reservoir project information. Another example is the partnership between Aker Solutions and SparkCognition in March 2019. With this partnership, Aker Solutions will enhance AI applications in its ‘Cognitive Operation’ initiative.
All such initiatives taken for implementing AI in oil and gas ecosystem will boost the growth of the market. In 2018, the global AI in oil and gas ecosystem market was valued at $413 million. Over the next 5 years, various energy projects undertaken in the Middle East and North Africa are expected to bring in about $1 trillion investments. The Middle Eastern region is exhibiting increasing interest in leveraging AI tools for oil exploration and various other operations. This will boost the integration of AI in the oil and gas industry.
North America is the largest market for AI in oil and gas market, and the region will continue to play a key role in the development of the global market. The dominance of this region can be explained by the increasing adoption of AI technologies by oilfield operators and service providers. Further, the presence of prominent AI software and system suppliers in the United States and Canada will foster the growth of the region. However, the Middle East and Africa region will hold the tag of the fastest growing market, owing to increasing investments by startups for AI implementation.
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