AI In Oil and Gas Market - Forecasts from 2023 to 2028

The AI in oil and gas market size was valued at US$2.918 billion in 2021 and is expected to grow at a CAGR of 23.97% to reach US$13.135 billion by 2028.

As the oil and gas industry is one of the most important sectors of the global economy, the adoption of Artificial Intelligence in the functioning of business of companies in this sector can help solve the difficulties and problems they face in relation to various departments of operation. From working on safety measures to the oil extraction process, AI can be adopted to reduce human risk and increase the productivity of the activity. Adopting AI in the oil and gas market helps explore and discover new or existing reserves, develop and automate equipment and device software, automate oil manufacture and extraction processes, and provide other on-field and off-field services. Since the adoption of AI in the oil and gas sector has begun in the last decade, it can be said that this market is in its expansion phase of the business cycle with several growth opportunities ahead.

Market Drivers

Vast amounts of data produced by the oil and gas industry

The oil and gas industry is recognized for generating vast data. The data generated is often not analyzed to its full potential, which means that the company and industry might be losing some insights and derivations that could be beneficial. Therefore, the data obtained using different techniques from different departments of the company can be processed and analyzed using Artificial Intelligence. For instance, an AI application by Shell Company includes data from collection sites to predict erosion and degradation and prevent leaks. Hence, historical and real data can be used to predict future trends and optimize operations for the current period.

Ocean exploration opportunities

Previously, due to limited technology and human incapacity, it was not possible to fully explore and discover ocean beds. Advancements in Marine Robotics and Artificial Intelligence have overcome this limitation. The innovation of AI robots is used to search through the possibility of the existence of oil and energy reserves and the methods of extracting them ecologically and sustainably. This increases the chances of field expansion for the oil and gas industry. For instance, Abyss Solution, an AI company, has received an investment of US$3.25 million to automate various risky operations in the energy and oil sector, including ocean exploration. Considering these factors, AI in the gas and oil market has strong growth engines to push the market toward expansion in the upcoming years.

The fear of data privacy and security issues and the cost of implementation could hinder the growth of AI in the oil and gas industry.

However, with the automation and digitalization of business operations in the oil and gas industry, there is a risk of data privacy violation and hacking. The oil and gas sector deals with a commodity that influences the working of the whole world. Therefore, if the systems are hacked, and the internal data and working of the company are threatened, the company could lose billions. Thus, the data security of AI in the oil and gas market must be strengthened and hardened to the extent that it becomes almost impenetrable since the stakes are high for such companies. Besides, the cost of implementing and adopting AI and Machine Learning into the company’s processes is increased. For these reasons, some companies might be hesitant to complete automation and adoption of AI in their companies.

Market Developments:

• In February 2023,Saudi Amarco, a universal Oil and Gas company, signed a deal with Accenture to use its Machine Learning, Artificial Intelligence, and other software services to help speed up the upstream and downstream activities of its oil and gas extraction processes.
• In November 2021,Shell Company, a USA-based Oil and Gas company, launched three new applications on Open AI Initiative, launched by Shell’s collaboration with C3 AI and other companies. These new offerings by Shell use data analytics and Artificial Intelligence to discover trends and patterns, utilize current and past data efficiently, and help in the decision-making for matters relating to the oil and energy industry. 

The oil and gas industry is attracting significant AI investments in the North American region, fueling the digitalization of the oil and gas industry.

North America has numerous software and technology companies offering Artificial Intelligence based solutions and services, which has driven the demand for more efficient and effective AI solutions in the oil and gas industry. This, in turn, has spurred investment into AI for leading Oil and Gas companies across the globe. Most companies offering such AI solutions to these oil and gas extracting companies are from North America. A few prominent players in AI in the oil and gas market from North America are C3 ai, IBM, Microsoft, and Google LLC. These companies have collaborated with top oil and gas companies to digitalize and adopt AI in their functioning and business operations. They are constantly evolving with their AI technology to deliver better results to their client companies and improve their product and service portfolio. Keeping their growth and market share in the global market in mind, it is most likely that North American AI in the oil and gas market will experience a steady increase over the forecast period.

 

Market Segmentation:

By Operation

• Upstream
• Midstream
• Downstream

By Application

• Surface Analysis
• Defect Detection
• Drilling and Completions
• Gathering and Transportation
• Processing and Refining Maintenance
• Others

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• Germany
• France
• United Kingdom
• Spain
• Others
• Middle East and Africa
• Saudi Arabia
• UAE
• South Africa
• Other
• Asia Pacific
• China
• Japan
• India
• South Korea
• Indonesia
• Taiwan
• Others