Artificial Intelligence and associated technologies could be more than just a way for oil and gas companies to improve operations.
The oil and gas industry isn’t shy of technology. Today, it manages three of the world’s most powerful supercomputers, each one of them a room-sized machine, able to process trillions of equations per second.
A good portion of this processing power helps build predictive models that shape how the industry explores, produces and eventually refines oil and gas. Yet there’s potential to do much more – especially when it comes to Artificial Intelligence (AI).
As margins in the industry tighten, oil and gas companies are already looking to AI to optimize costs. So it’s not surprising that close to half of the respondents to a recent EY survey say the technology is a top investment priority.
An AI-led efficiency boom
Despite its computing power relative to other industries, the oil and gas sector has so far been slower to adopt and integrate AI technologies. But advances are being made.
Across its upstream and downstream operations, the industry is ramping up AI investments. More than half the oil and gas companies we surveyed are currently implementing AI applications. As a whole, these companies invest about $65 billion a year in R&D. From 3D seismic imaging to horizontal drilling, over its recent history the industry’s deep research capabilities have led to game-changing innovation. This expertise is now also driving the development of in-house AI applications.
One Spanish energy supplier has applied AI and data tools across its refineries. These measure pressure, temperature and processing rates to ensure the entire plant is operating at optimal efficiency – while also reducing downtime by preventing breakages and accidents. According to the firm, these analytics could increase profits by as much as 30 cents per barrel.
AI is also improving the distribution of refined products. One of the world’s largest oil companies uses analytics to better anticipate fluctuations in demand and supply, maximizing the value generated by each barrel of oil produced. A US oil major is working to capture all operating data generated by its refining and chemical operations. The amount of data – up to 1 billion bits per minute – is unprecedented, and can be used to unlock unique operational efficiencies.
While we know AI is starting to transform downstream operations, it’s also moving into other parts of the value chain. AI and associated technologies – including deep learning – are transforming upstream operations. Recently a Paris-based International Oil Company (IOC) struck a partnership with Google Cloud to develop AI applications, including Computer Vision technology to improve the interpretation of sub-surface images. Some of the innovations will also automate the analysis of technical documents.