AI In Oil And Gas Market Size
| Study Period | 2022 - 2029 |
| Market Size (2024) | USD 3.14 Billion |
| Market Size (2029) | USD 5.70 Billion |
| CAGR (2024 - 2029) | 12.61 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
AI In Oil And Gas Market Analysis
The AI In Oil And Gas Market size is estimated at USD 3.14 billion in 2024, and is expected to reach USD 5.70 billion by 2029, growing at a CAGR of 12.61% during the forecast period (2024-2029).
The oil and gas industry is witnessing a surge in AI applications, spanning reservoir analysis and drilling optimization to safety monitoring and emissions reduction. This AI wave is set to reshape exploration, production, and environmental sustainability, propelling market growth.
Artificial intelligence, particularly in the form of predictive maintenance, is reshaping asset management in the oil and gas industry. This trend is poised to be a key driver of market growth by bolstering reliability and mitigating operational risks.
In October 2023, C3 AI, a leading Enterprise AI software firm, announced a collaboration with Shell, integrating predictive maintenance software into the C3 AI reliability application. This strategic partnership underscored the increased adoption of AI platforms in the oil and gas industry, underpinning market expansion.
AI technologies promise heightened operational efficiency in oil and gas, enabling companies to identify patterns, automate decisions, and analyze vast datasets from sensors and machinery. Equipped with AI, predictive maintenance solutions can preempt equipment breakdowns, allowing businesses to plan maintenance, minimize downtime, and optimize asset utilization.
The market is primarily driven by the oil and gas industry's need to lower production costs. Faced with volatile oil prices, companies are turning to AI to streamline operations, enhance efficiency, and cut costs.
As AI adoption accelerates, especially in the oil and gas industry, companies are leveraging its capabilities to extract deeper insights from their data. By optimizing their operations, these firms are not only cutting costs but also boosting productivity.
Russia faced an energy crisis following the 80 billion cubic meters (BCM) cut in pipeline gas supplies to Europe after its Ukraine invasion. This, in turn, hampered the operations of midstream and downstream players in the oil and gas industry, stalling market growth.
The European Union's push for energy self-sufficiency through renewable sources poses a challenge to the traditional oil and gas industry. This shift indirectly curtails the scope for AI solutions in the region's oil and gas industry, impacting market growth.
The global oil and gas industry, already navigating market dynamics, faced a severe setback during the COVID-19 pandemic. The ensuing global shutdown and reduced economic activities led to a significant drop in oil demand, plummeting international crude oil prices. Consequently, production and exploration activities in the industry were hampered, affecting the adoption of AI technologies.
AI In Oil And Gas Market Trends
The Upstream Operations Segment is Expected to Witness Significant Growth
- Upstream operations in the oil and gas industry encompass exploration activities, from geological surveys and land acquisition to onshore and offshore drilling. A key challenge in this phase is the search for new oil reserves and seeps by geologists and exploration teams.
- The integration of AI in oil and gas, particularly in exploration, is gaining traction. Advanced AI algorithms can process vast datasets, including seismic surveys, geological formations, well logs, and satellite imagery. This enables precise identification of potential oil reservoirs, both on land and in the ocean.
- ExxonMobil, a prominent player, exemplifies this trend by harnessing AI for oil exploration. By deploying AI models, the company can analyze real-time seismic data and historical drilling records, enhancing its ability to detect natural oil seeps in oceanic settings.
- Major global oil and gas corporations are increasingly turning to AI to bolster the efficiency of their exploration endeavors. By leveraging AI tools to digitize records and automate geological data analysis, these companies can swiftly identify issues like pipeline corrosion or heightened equipment wear.
- Huawei, for instance, developed a specialized cloud for oil and gas exploration. By harnessing AI and Big Data, the company reanalyzed a massive 10 PB of historical exploration data for a customer, extracting new value and revolutionizing seismic data collection.
- Advancements in cloud-based analytics and the rise of digital twins are reshaping predictive maintenance in the oil and gas industry. Notably, industry giants like BP, ExxonMobil, and Shell are utilizing predictive maintenance to assess equipment conditions and anticipate maintenance needs.
- As per OPEC's April 2024 data, the demand for crude oil is on a consistent growth trajectory, reflecting the escalating production needs in the oil and gas industry, which bodes well for the market's future.
- With a heightened focus on environmentally friendly practices, the oil and gas industry is increasingly turning to AI for early hazard detection. By analyzing aerial photos, satellite imagery, and remote sensing data, companies can swiftly identify oil spills and pipeline leaks, curbing environmental damage and limiting pollutant spread. These factors collectively underpin the market's projected growth.
North America Holds the Largest Market Share
- North America is a pivotal hub for AI, particularly in terms of its robust oil and gas industry. The region's economic prowess, coupled with widespread AI adoption among oilfield entities, a rich landscape of top AI suppliers, and substantial joint investments from both public and private sectors, propels the demand for AI in oil and gas. With oil and gas production and investments increasing, the market's potential is expected to expand further.
- The United States is poised to lead North America's AI in oil and gas market, owing to its expansive oil and gas industry and a notable uptick in AI integration. According to data from the US EIA, the United States outpaced all other nations in crude oil production for six consecutive years. In 2023, the United States hit a record high, producing an average of 12.9 million barrels of crude oil daily, surpassing the previous record of 12.3 million set in 2019. This abundant supply lowered energy costs and catalyzed private investments, further bolstering the nation's economic landscape.
- The role of AI in the oil and gas value chain is profound, especially in an industry marked by dynamic energy production. Ai has reshaped companies' operations, ranging from reservoir valuation to tailoring drilling strategies and assessing well risks. Given North America's advanced infrastructure, it is expected to lead the global market. Moreover, the surge in AI investments among start-ups is set to amplify market growth in the near future.
- The infusion of AI in oil and gas exploration has ushered in a new era of precision and efficiency, fundamentally altering how companies locate and extract hydrocarbon resources. Consequently, as investments in oil exploration activities rise, the utilization of AI in the industry also increases.
- Major US players like ExxonMobil and Occidental Petroleum are making use of this AI wave. They are channeling billions into diverse oil exploration ventures and consolidating their positions through substantial mergers and acquisitions.
- In March 2024, an advanced AI program developed by Corva LLC took the reins at a remote Nabors Industries Ltd rig. Leveraging satellite communication, this AI made split-second decisions, enhancing drilling speed by at least 30% and potentially reducing human operator commands by 5,000. The primary aim behind this technology is to cut costs and maximize oil extraction. With such bold strides in AI adoption, especially in oil exploration, US companies are poised to reshape the market landscape.
AI In Oil And Gas Industry Overview
The AI in oil and gas market is fragmented, featuring a mix of global giants and numerous small and medium-sized enterprises. Noteworthy players include IBM Corporation, Fugenx Technologies, C3.AI Inc., Microsoft Corporation, and Intel Corporation. These companies are increasingly turning to strategic collaborations and acquisitions to bolster their product portfolios and secure a competitive edge.
January 2023: C3 AI, specializing in AI application software, unveiled its C3 Generative AI Product Suite, debuting with the C3 Generative AI for Enterprise Search. This suite boasts advanced transformer models, streamlining integration across diverse value chains. The introduction of C3 Generative AI is poised to boost transformative efforts in various industries, including oil and gas.
August 2023: Wintershall Dea, a leading European player in natural gas and oil, pivoting toward a focus on gas and carbon management, joined hands with IBM Consulting to establish an AI Center of Competence (CoC). This strategic alliance, with Microsoft as a shared technology partner, is geared toward driving forward AI applications that elevate energy production.
AI In Oil And Gas Market Leaders
-
IBM Corporation
-
Fugenx Technologies
-
C3.AI Inc.
-
Microsoft Corporation
-
Intel Corporation
*Disclaimer: Major Players sorted in no particular order
AI In Oil And Gas Market News
- March 2024: ADNOC, the Abu Dhabi National Oil Company, announced plans to harness artificial intelligence (AI) for oil production in the Belbazem offshore block. It aims to boost operational efficiency, bolster safety measures, and simultaneously slash emissions and costs. Teaming up with AIQ, ADNOC will leverage AIQ's WellInsight tool to scrutinize reservoir data and streamline operations, underscoring the burgeoning demand for AI solutions in the oil and gas industry.
- January 2024: Schlumberger (SLB) forged a strategic alliance with Geminus AI, a prominent player in physics-informed AI technology for the oil and gas industry. This collaboration grants SLB exclusive rights to deploy the industry's maiden physics-informed AI model builder. This innovative tool merges physics-based methodologies with operational data, crafting highly precise AI models that can be swiftly scaled at a reduced cost compared to conventional methods. Geminus' platform, distinguished by its physics-informed AI computing, embeds real-world constraints into its digital models. Notably, this platform operates efficiently with minimal data and can be seamlessly updated with new inputs. Such capabilities empower data scientists and engineers to make real-time, data-driven decisions, setting a solid foundation for future market expansion.
AI in Oil and Gas Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Assessment of Macroeconomic Factors on the Market
4.4 Technology Snapshot - By Application
4.4.1 Quality Control
4.4.2 Production Planning
4.4.3 Predictive Maintenance
4.4.4 Other Applications
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Increasing Focus to Easily Process Big Data
5.1.2 Rising Trend to Reduce Production Cost
5.2 Market Restraints
5.2.1 Initial High Cost of Adoption
5.2.2 Lack of Skilled Professionals in the Oil and Gas Industry
5.3 Key Use Cases
6. MARKET SEGMENTATION
6.1 By Operation
6.1.1 Upstream
6.1.2 Midstream
6.1.3 Downstream
6.2 By Type
6.2.1 Platform
6.2.2 Services
6.3 By Geography***
6.3.1 North America
6.3.2 Europe
6.3.3 Asia
6.3.4 Australia and New Zealand
6.3.5 Latin America
6.3.6 Middle East and Africa
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles*
7.1.1 IBM Corporation
7.1.2 FuGenX Technologies
7.1.3 C3.AI Inc.
7.1.4 Microsoft Corporation
7.1.5 Intel Corporation
7.1.6 ABB Ltd
7.1.7 Honeywell International Inc.
7.1.8 Huawei Technologies Co. Ltd
7.1.9 NVIDIA Corporation
7.1.10 Infosys Limited
7.1.11 oPRO.ai Inc.
8. INVESTMENT ANALYSIS
9. FUTURE OF THE MARKET
AI In Oil And Gas Industry Segmentation
The oil and gas industry is increasingly turning to artificial intelligence (AI) as a cost-saving measure. AI applications, ranging from boiler diagnostics to drilling operations, are becoming integral in optimizing processes across the industry's upstream, midstream, and downstream segments. In the exploration and production areas, AI is leveraged for tasks like quality control, predictive maintenance, and planning. The report also delves into AI services, encompassing both professional and managed services.
This study evaluates the revenue generated by AI solutions from various industry players. The report not only scrutinizes market size but also delves into key parameters, growth drivers, and major vendors, all crucial for estimating market trends and growth rates during the forecast period.
The AI in oil and gas market is segmented by operation (upstream, midstream, and downstream), type (platform and services), and geography (North America, Europe, Asia-Pacific, Latin America, and Middle East and Africa). The market sizes and forecasts are provided in value terms (USD) for all the above segments.
| By Operation | |
| Upstream | |
| Midstream | |
| Downstream |
| By Type | |
| Platform | |
| Services |
| By Geography*** | |
| North America | |
| Europe | |
| Asia | |
| Australia and New Zealand | |
| Latin America | |
| Middle East and Africa |
AI in Oil and Gas Market Research FAQs
How big is the AI In Oil And Gas Market?
The AI In Oil And Gas Market size is expected to reach USD 3.14 billion in 2024 and grow at a CAGR of 12.61% to reach USD 5.70 billion by 2029.
What is the current AI In Oil And Gas Market size?
In 2024, the AI In Oil And Gas Market size is expected to reach USD 3.14 billion.
Who are the key players in AI In Oil And Gas Market?
IBM Corporation, Fugenx Technologies, C3.AI Inc., Microsoft Corporation and Intel Corporation are the major companies operating in the AI In Oil And Gas Market.
Which is the fastest growing region in AI In Oil And Gas Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in AI In Oil And Gas Market?
In 2024, the North America accounts for the largest market share in AI In Oil And Gas Market.
What years does this AI In Oil And Gas Market cover, and what was the market size in 2023?
In 2023, the AI In Oil And Gas Market size was estimated at USD 2.74 billion. The report covers the AI In Oil And Gas Market historical market size for years: 2022 and 2023. The report also forecasts the AI In Oil And Gas Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
How does AI improve safety and efficiency in the Oil and Gas Market?
AI improves safety and efficiency in the Oil and Gas Market by predicting equipment failures, optimizing systems, analyzing data for better exploration, and providing data-driven insights
How does AI improve safety and efficiency in the Oil and Gas Market?
AI improves safety and efficiency in the Oil and Gas Market by predicting equipment failures, optimizing systems, analyzing data for better exploration, and providing data-driven insights
How does AI improve safety and efficiency in the Oil and Gas Market?
AI improves safety and efficiency in the Oil and Gas Market by predicting equipment failures, optimizing systems, analyzing data for better exploration, and providing data-driven insights
Artificial Intelligence in Oil and Gas Industry Report
The AI in Oil and Gas Market Report is segmented by operation, type, and geography. The market is driven by a focus on enhancing operational efficiency, safety, and environmental compliance. The use of AI technologies such as machine learning, predictive analytics, and automated control systems is optimizing processes, improving decision-making, and reducing costs. AI is utilized across various industry segments, including upstream, midstream, and downstream operations, aiding in tasks like reservoir simulation, automated drilling, predictive maintenance, geological mapping, safety monitoring, process automation, and asset management.
The market's expansion is further propelled by the increasing data explosion in the industry, strict environmental regulations, and advancements in AI algorithms. This growth trend is supported by industry reports and forecasts, providing a comprehensive overview of the market's trajectory. Mordor Intelligence™ Industry Reports provide statistics for the AI in oil and gas market share, size, and revenue growth rate, including a market forecast outlook and a historical overview. Get a sample of this industry analysis as a free report PDF download.
The industry analysis highlights the importance of AI in enhancing operational efficiency and safety within the oil and gas sector. Industry information reveals the growing reliance on AI technologies for tasks such as predictive maintenance and process automation. The industry outlook remains positive due to advancements in AI algorithms and increasing data volumes. Industry reports provide a comprehensive overview of market trends, market segmentation, and market value.
Industry research indicates that the AI in oil and gas market is experiencing significant growth. Industry sales are expected to rise as companies adopt AI technologies to optimize operations. The industry size is expanding, supported by market data and market forecast. Industry statistics show a steady increase in market growth, with market leaders driving innovation. Market outlook suggests continued investment in AI technologies, while market overview and market predictions point to a promising future. Market review and market segmentation highlight the diverse applications of AI across the oil and gas industry.
The market value of AI in oil and gas is reflected in the report example provided by Mordor Intelligence™. The report PDF offers valuable insights into the market trends and growth rate. Research companies are focusing on developing advanced AI solutions to meet the industry's evolving needs. The comprehensive industry analysis and market forecast provide a clear understanding of the market's trajectory, ensuring informed decision-making for stakeholders.
