When we talk about artificial intelligence (AI) today, it can often be spoken of with a dystopic undertone. However, there are three ways, according to the Harvard Business Review, in which AI can support a business: automating processes, analysing data, and engaging with customers or employees.
In the oil and gas industry, the first two examples are most immediately relevant. Machine learning in energy trading is not a novel concept – with a fluctuating and volatile market, the ability to predict price trends using complex coded algorithms, for example, has been part of the trading strategy for many large oil producers and traders.
Beyond the usefulness of AI in a trading office, there are also benefits to deploying AI in the upstream and midstream. One of the avenues through which investments are being made in AI is for the prospection of oil. This is technology where robots can assess drilling sites and predict well performance, saving time and capital expenditure.
AI can also be used to predict the duration of refinery shutdowns thereby reducing millions of dollars that unplanned outages tend to cost the oil industry. Refiners can also take advantage of AI analytics to anticipate potential mechanical failures before they even occur.
There is also the optimistic outlook that the use of AI methodologies can increase efficiency in the chain, thus indirectly reducing carbon emissions in the long run.
In the natural gas industry, AI is being used by producers to lower methane emissions. One such data company is Project Canary which differentiates gas. Natural gas that is produced with lower emissions can be labelled differentiated, low-carbon, or responsibly-sourced, which makes it more appealing to environmentally-conscious consumers.
Having the right AI capabilities, however, is instrumental for companies to reap the benefits of machine learning. Companies must also redesign their day-to-day operations and be equipped to implement the automation. Ultimately, cognitive technology will change the landscape in which we as an industry operate.
Beaman, Jeremy. “Power of AI: Oil and Gas Sector Drills down into Methane Emissions Data.” S&P Global Commodity Insights, S&P Global Commodity Insights, 24 Oct. 2023, www.spglobal.com/commodityinsights/en/market-insights/latest-news/natural-gas/102423-power-of-ai-oil-and-gas-sector-drills-down-into-methane-emissions-data.
Sharma, Gaurav. “How Multibillion Dollar Investments in AI Are Driving Oil and Gas Sector Innovation.” Forbes, Forbes Magazine, 5 Oct. 2023, www.forbes.com/sites/gauravsharma/2023/08/14/how-multibillion-dollar-investments-in-ai-are-driving-oil-and-gas-sector-innovation/?sh=1f18c4a71ff7.