6 ways AI has helped businesses save money in the Oil and Gas industry

AI has significantly impacted the oil and gas industry, providing innovative solutions that help businesses save money by optimising operations. This, according to Offshore Technology, involves utilising “advanced algorithms and machine learning (ML) to analyse geological, geophysical, and seismic data to predict potential oil and gas reservoirs, optimise drilling locations, and enhance decision-making processes throughout the exploration and drilling phases.” Here are six ways AI has contributed to cost savings in the oil and gas sector:

Predictive Maintenance:

AI enables predictive maintenance by analysing data from sensors and equipment to predict when machinery is likely to fail. As per a recent study by McKinsey & Company, predictive maintenance—a data-driven approach that analyses the condition of a piece of equipment to predict when it will require maintenance—will save companies $630 billion by 2025, This allows companies to schedule maintenance activities proactively, preventing costly unplanned downtime and reducing maintenance costs.

Forbes has also found that “more than 92% of oil and gas companies around the world are "either currently investing in AI or plan to in the next two years.” This shows that AI solutions are being considered to achieve more cost-efficient technology-enabled operations.

Optimised Operations:

AI algorithms can optimise drilling and production operations by analysing vast amounts of data, such as geological information, well performance, and real-time operational data. In an article by the Journal of Petroleum Technology, at least 50% of oil and gas executives are using it to solve challenges across their organisation. This helps in making more informed decisions, optimising production efficiency, and minimising resource wastage.

Energy Management:

AI helps in optimising energy consumption across various processes in the oil and gas industry. By analysing data from sensors and equipment, AI can identify opportunities to reduce energy consumption, leading to significant cost savings and improved sustainability.

Supply Chain Optimization:

 AI contributes to the optimization of the supply chain by analysing historical data, market trends, and external factors affecting the industry. This allows for better demand forecasting, inventory management, and logistics planning, ultimately reducing costs associated with transportation, storage, and procurement.

Safety and Risk Management:

AI is employed in monitoring and assessing safety risks in real-time. This includes the use of computer vision for monitoring worksites, analysing patterns to identify potential hazards, and alerting operators to take corrective actions. By enhancing safety measures, AI helps prevent accidents and the associated financial and reputational costs.

Exploration and Reservoir Management:

AI plays a crucial role in analysing seismic data, well logs, and other geological information to optimise exploration efforts. It helps identify potential drilling locations more accurately, reducing the number of unsuccessful wells and associated exploration costs. AI also aids in reservoir management by providing insights into reservoir behaviour and optimising production strategies.

In summary, AI technologies have revolutionised various aspects of the oil and gas industry, contributing to increased efficiency, reduced downtime, and overall cost savings. These advancements help companies navigate the challenges of the dynamic energy sector and enhance their competitiveness in the market.