April 20, 2024
Artificial Intelligence (AI) in Oil and Gas Market

Artificial Intelligence (AI) In Oil And Gas Market Driving Innovative Solutions In Oil & Gas

The global artificial intelligence (AI) in oil and gas market is estimated to be valued at US$ 2.99 billion in 2024 and is expected to exhibit a CAGR of 12% over the forecast period 2024 to 2031. Artificial intelligence utilizes algorithms and software to perform tasks commonly associated with human intelligence such as visual perception, speech recognition, decision-making, and translation between languages. Companies in the oil and gas industry are increasingly adopting AI technologies to gain insights from data, automate decision making, and optimize operations.

Key players operating in the artificial intelligence (AI) oil and gas market are Google, IBM, SAS, Accenture Plc., Baidu, Inc., H2O.ai., Microsoft Corporation, Oracle Corporation. These players are implementing artificial intelligence across the value chain for upstream, midstream, and downstream operations to improve productivity and reduce costs. With increasing digital transformation initiatives and growing data volumes in the oil and gas industry, the demand for AI solutions is expected to surge in the coming years. Major oil companies are also expanding their AI departments globally to develop new-age solutions for the energy sector.

Key Takeaways

Key players: Key players operating in the artificial intelligence (AI) oil and gas market include Google, IBM, SAS, Accenture Plc., Baidu, Inc., H2O.ai., Microsoft Corporation, Oracle Corporation. These companies are focusing on developing AI-powered predictive maintenance, production optimization, and autonomous robotics for the industry.

Growing demand: The demand for Artificial Intelligence (AI) in Oil and Gas Market Demand in oil and gas is growing due to rising adoption of digital technologies across E&P, refining operations, and distribution channels. AI improves oil rig maintenance, enhances output quality, optimizes logistics, and ensures safety and environmental compliance.

Global expansion: Major AI vendors and oil companies are expanding their AI departments globally to develop new-age solutions for the energy sector. They are also making acquisitions and entering into partnerships to strengthen AI capabilities for oil and gas applications.

Market key Trends

One of the major trends in the artificial intelligence (AI) in oil and gas market is the growing focus on predictive analytics. AI algorithms can analyze vast amounts of production and machine data to predict equipment failures and optimization opportunities. This helps minimize downtime and maximizes output. Advanced predictive maintenance solutions using machine learning are helping oil companies achieve significant cost savings by preventing catastrophic failures and automating repairs.

Porter’s Analysis

Threat of new entrants: High capital requirements and economies of scale in data and model training set barriers to entry.
Bargaining power of buyers: Large oil and gas players can demand lower prices and more customized solutions while smaller players have less negotiation power.
Bargaining power of suppliers: Major AI providers like IBM, Google and Microsoft have strong bargaining power given their technological leadership and ownership ofSpecialized data.
Threat of new substitutes: Alternate analytics technologies do not currently match AI’s unique ability to gain insights from massive, diverse datasets and constantly improve.
Competitive rivalry: Fierce competition to attract talent and partnerships has led to heavy investments in R&D to rapidly develop new applications.

Geographical Regions

North America currently accounts for the largest share of the artificial intelligence in oil and gas market owing to presence of major AI players and oil producers in the region. The U.S. and Canada are early adopters with Texas and Alberta being pioneering hubs for AI energy innovation.

Asia Pacific is poised to become the fastest growing regional market between 2024-2031 due to increasing investments by national oil companies and local AI startups especially in China and India. Both countries are ramping up AI capabilities to capitalize on vast reserves and deal with challenges of scale in the energy sector. Partnerships with global technology majors will help disseminate AI adoption in emerging Asia Pacific markets.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it.