Today, the oil and gas sector is facing an array of social, economic, environmental and political challenges. Novel technology, including Artificial Intelligence (AI), provides a means to address many of these challenges and help meet the demands of a transitional energy market. AI is set to become a major part of the energy sector, with its value in the petroleum industry alone predicted to be several billion dollars by 2022. In the longer-term, consulting firm McKinsey & Company estimates AI has the potential to create annual value of approximately $200 billion across the oil and gas sector, and $3.5-5.8 trillion of annual value in the global economy.
The term AI was first coined in 1956 by celebrated computer scientist John McCarthy and can be defined as a system capable of perceiving its environment and taking actions to maximise its chances of success. Machines with the capacity to learn in a way that can be compared to processes in the human brain. Thanks to developments in computational power, algorithms, data collection and digitalisation, AI that can mimic general human cognitive capabilities (rather than just make improvements within a single, narrow field) is now starting to become a reality. There is a current debate bridging ethics, philosophy and science around the possibility that mankind could soon create computers that are capable of learning independently at a speed that is infinitely faster than those who created them. For some, the possibilities of unheralded advancement are appealing. For others, the risks that a world totally beyond our control might emerge at an incomprehensible speed are a significant cause for concern.
Major issues facing the oil and gas sector include:
Additionally, the finite availability of hydrocarbons means that there are increasingly fewer unexploited accumulations left, whilst those remaining are often more technically challenging to produce or are in difficult locations, for example, the Arctic. “However, the biggest short-term challenge is cost reduction and AI will have a positive impact on it.” All in all, fossil fuels are set to play a major role over at least the next few decades as energy demand continues. To survive in this challenging climate, oil and gas companies must embrace new technology, including AI, to maximise efficiency and revenue.
What are the applications of AI?
If you would like to speak to either of the Experts who contributed to this article, or other require other AI specific expertise, please reach out to Mr Callis on 020 7551 0782 or by email [email protected].
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