The oil and gas industry is booming. Remaining one of the major exports for huge countries like the US and Russia, the oil and gas industry is one of the largest sectors in the world – generating an estimated $5 trillion in global revenue as of 2022.
And just like other industries, artificial intelligence is making huge waves in the oil and gas sector. But how is the sector being transformed by AI, and what are data and AI leaders looking for when leveling up their business in the space?
Key use cases of AI in the oil and gas industry
Demand forecasting: AI can predict demand surges for offshore drilling services by analyzing data from past projects and global energy needs, allowing companies to allocate resources efficiently and maximize profits.
Additionally, AI helps in forecasting demand for petroleum products, enhancing production optimization, inventory management, and adapting quickly to market changes. This revolutionizes decision-making, resource utilization, and operational efficiency in the oil and gas industry, leading to increased profitability.
Oil exploration: The search for new oil reserves, historically a challenging and expensive venture, is being revolutionized by artificial intelligence (AI), significantly improving efficiency and accuracy in oil and gas exploration. AI and machine learning (ML) technologies analyze extensive datasets, such as seismic surveys, well logs, satellite imagery, and geological data, to detect patterns and anomalies indicating potential oil reservoirs.
This advanced approach allows exploration teams to more accurately identify promising drilling sites, drastically reducing exploration time, costs, and environmental impact by focusing efforts on areas with a high likelihood of oil presence. AI not only streamlines the identification of new reserves but also optimizes the output of existing fields, enhancing production rates and prolonging the lifespan of mature assets.
Predictive maintenance: Traditional maintenance approaches, often reactive or scheduled without precise need, can lead to inefficiencies or unforeseen equipment failures. AI enables the analysis of extensive sensor data, historical maintenance records, and operational data in real-time, allowing for the anticipation of potential equipment failures.
This proactive strategy ensures maintenance is performed just when necessary, based on AI-driven predictions. It not only prevents unexpected downtime but also optimizes the maintenance schedules, increases equipment longevity, and improves safety across various operations, from offshore rigs to refineries and pipelines.
Texas and the AI boom
Let’s zoom in on Texas; by far the largest oil-producing state in the US, Texas produced 1.8 billion barrels last year (triple that of New Mexico, the second largest US state for oil).
The oil and gas industry in Texas is taking on AI in a big way. Historically relegating AI to back-office and admin tasks, oil and gas are now using AI much more frequently in a bid to cut costs and operate more efficiently. The shale basins of Texas, for instance, have been utilising ML and remote operations to drill faster, suggest better ways to frac and predict when active pump wells will fail.
One big indicator of this growth is the rate of graduates coming into the industry. According to The University of Texas at San Antonio (UTSA), Texas will see a 27% increase in AI and data science jobs over the next decade.
“Across all industries locally, everyone’s making an AI play. We’re noticing a huge need for talent in and around Texas and Arizona as companies look to scale the tech side of their business, particularly when it comes to data science and machine learning.”
Kyle Anzalone, Associate Vice President at Harnham
Another big indicator is Texas leaders coming together recently to discuss policy around AI; something which local and national governments are quickly pivoting towards as the space develops exponentially.
What should data and AI leaders be looking for in the oil and gas space?
Operational Efficiency: Implementing AI and machine learning algorithms can significantly improve operational efficiency in the oil and gas industry, especially in exploration, drilling, production, and distribution processes. This includes predictive maintenance of equipment, optimization of supply chains, and automation of repetitive tasks.
Advanced Analytics for Decision Making: Utilizing big data analytics for real-time decision-making can enhance exploration activities and reservoir management. By analyzing geological data, historical production data, and real-time sensor data, companies can make more informed decisions about where to drill and how to manage reservoirs.
Talent and Culture: Building a culture that embraces change and innovation is crucial. This includes investing in training for current employees and attracting new talent skilled in data science, AI, and machine learning. A good AI strategy is nothing without the people behind it.
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