How Artificial Intelligence is disrupting the Oil & Gas Industry
You have probably already heard the term ‘Data is the new Oil’. The oil and gas companies are set to profit once again from their resources, this time- from the vast amounts of data that is in their possession.
Today, the capabilities of computer processing have enabled insights and decision- making solutions unimaginable before. The oil and gas companies are set to significantly reduce their operating costs, improve administrative processes and transform the business using disruptive technologies. Some are calling this as the ‘Oil and Gas 4.0’ revolution.
So why is this disruptive and how will Artificial Intelligence add value to the oil and gas industry?
First of all, imagine the flow of the oil or gas life cycle:
Oil or gas is first explored, then it is extracted, stored, refined, financed, shipped, finishing in a form of an end product. This cycle requires continuous decision-making and optimisation processes and techniques in order to go through it in the most efficient and business-wise manner.
At the beginning of the life cycle of oil and gas products, an upstream sector focuses on exploration and production. Research and investigative studies are being conducted to identify the biggest value add resources, while decisions are being made based on data that is collected during the studies.
Today, sensors are being used everywhere in drilling and plant operations. The sensors collect data and transmit it to be analysed and processed to make decisions. Prior to the development of technology, humans were making those decisions based on data available to them; today, we have computers that are trained to process more information at a faster speed and make decisions instead of us. The future promises unmanned oil and gas plant stations that operate autonomously.
Why is this relevant now?
Artificial Intelligence together Machine Learning and Deep Learning techniques are applied in analysing vast amounts of data to optimise the decision-making processes. These are not new technologies or data analysis tools: Artificial Intelligence has existed before. In fact, Artificial Intelligence already existed in the 70’s and the 80’s and experienced booms and setbacks in computer science research already back then. However, the computer power was limited and there was not enough processing power to accomplish what is possible now.
Today, the evolution of the technology made computer processors so small that they can be integrated everywhere and share the data, which they have measured. In the meantime, computers have become so powerful that they can process large amounts of data in a significantly shorter period of time, requiring much less resources.
The data-analysis based decision-making capabilities are the key innovation that the Artificial Intelligence is bringing. In short- it creates better decision-making opportunities based on data, and this produces significant cost efficiencies, increase profit margins and open up the opportunities not possible before.
Artificial Intelligence and Big Data is already resourcefully applied by the oil and gas sector with pioneers such as Chevron, Shell, and Engie. These giant global brands and conglomerates are using the tools of digital transformation to keep the business of their companies at the most competitive level.
Chevron, for instance, has reported production rise of 30% when using the Artificial Intelligence over the conventional methods at its operations plant in California. Gazprom, Total, China Petroleum and Chemical Corp have also reported about the use of Artificial Intelligence in their operations.
According to the World Economic Forum, the oil and gas industry is set to unlock $1.5 trillion in industry and societal value through digital transformation.
The opportunities that the technological developments enable today are immense and for the oil and gas companies that need to meet the challenges of raising global energy demand, the innovations come just at the right time.