The oil and gas industry is thirsty for new technological advancements and developments that help expedite capital opportunities. By taking advantage of reduced inaccuracies and improved productivity courtesy of artificial intelligence (AI), the energy sector can enjoy faster data analysis and more informed business decisions.
AI has the potential to reduce some significant capex and, more importantly, preserve the sector’s most valuable resources. Shell, one of the five biggest oil and gas companies in the world, is leading the way. According to The Wall Street Journal, Shell is relying on technology from Microsoft to create predictive maintenance solutions that increase uptime, improve yields and elevate safety for employees and customers alike.
As the oil and gas sector continues to grow, so will the opportunities for incorporating AI. According to Mordor Intelligence, AI in the space will experience a compound annual growth rate of 12% through 2023. And predictive maintenance is only the beginning—improvements in AI capabilities will increase possible implementations, including everything from streamlining production to reducing or eliminating waste.
People mostly use the term “AI” to refer to predictive algorithms or machine learning, not a truly autonomous system that can make its own decisions. Viewed in this light, companies herald AI as the answer to a wide array of issues in the oil and gas sector. In many cases, it can provide a better solution that is more cost-effective than existing options.
Companies in the oil and gas sector should view AI as a way to accelerate human involvement. AI certainly can process wellhead data much faster than humans, for example, but any erroneous conclusions could be costly. Building a system where AI processes data and humans confirm it will unlock significant benefits while minimizing unnecessary risks. Studies show that the market for AI in oil and gas will reach $2.85 billion by 2022.
Organizations need to prepare to take advantage of these solutions by incorporating an integrated strategy that will drive tangible results. Having a set strategy in place with defined objectives can help reduce misdirection. Without a specific desired outcome, sideline objectives can take over or impede the greater goal. An AI-powered resolution should save companies time and help in allocating resources to specific checks and balances.
Implement a clear strategy to authenticate collected data as well as security measures, which is a component of AI-powered solutions that many businesses overlook. When combined with off-chain storage systems, blockchain is a promising technology to help audit decisions made by AI.
Allocate resources to areas and departments that are influenced by a data drive through AI. Employees are ready for it. Accenture research reveals that more than 60% of employees view AI’s effect on their work positively; about two-thirds of respondents admit they need to develop their own abilities to work with AI-powered machines.
Despite workforces that are willing and able to be trained, only 3% of business leaders plan to increase their training budgets to meet the growing need. By and large, AI solutions won’t be “plug and play.” AI requires large amounts of clean, organized data to inform decisions something many organizations lack. By training employees to perform these tasks and giving AI the tools it needs to succeed, organizations are getting an invaluable head start on AI implementation.
Multiple options should be vetted. Make prototype test environments, and then test again. Have people on staff who are able to implement the needed solutions. As the labor shortage in the oil and gas industry continues to worsen, the only way companies can keep pace with growing production demands is by improving efficiency.
Internet of Things solutions will generate data from ongoing operations, and AI systems will analyze these data to inform better decisions. These software systems can make employees more efficient and productive, provided companies have the technology and the experts to implement them.
Chevron Corp.announced today that it has entered into a definitive agreement with Anadarko Petroleum Corp. to acquire all of the outstanding shares of Anadarko in a stock and cash transaction valued at $33 billion, or $65 per share.
Foothills Resources retained EnergyNet for the sale of an operated package of Texas Gulf Coast assets through a sealed-bid offering closing Sept. 5.
Here’s a snapshot of energy deals from the past week including Williams’ $3.8 billion JV in the Marcellus/Utica and a Delaware Basin bolt-on by Contango Oil & Gas.