Oil & gas are the most valued commodities in the whole of the energy sector. Over the past decade, the use of technology in the oil & gas industry has witnessed an immense growth, mainly to enhance efficiency, reduce costs, and minimize the downtime. Owing to the increasing concerns over the impact of energy production on the environment, the oil & gas companies are actively adopting innovative approaches and integrate technologies like artificial intelligence to meet their business goals while reducing the impact on the environment. In the present day scenario, artificial intelligence (AI) is largely helping the oil & gas industry to shape its future. AI is predicted to highly impact the oil and gas industry over the coming years.
Market overview
The global AI in Oil & Gas Market that was USD 1.42 Billion in 2016 is predicted to grow at a CAGR of 12.66% between 2017 and 2022, reaching a value of USD 2.85 Billion by 2022.
Based on type, the software segment led the market with the highest share in 2016, and is expected to be the largest market over the forecast period as well, growing at a decent pace. This growth can be mainly attributed to application of software in upstream oil & gas exploration and production activities. The hardware segment is likely to witness a swift growth from 2017-2022, owing to the increasing need for sophisticated hardware system configurations and components that can handle massive data.
Based on function, the predictive maintenance and machinery inspection was the largest market in 2017, and is also one of the fastest growing segments in this market. This growth is mainly because predictive maintenance is crucial in running operation without any interruptions and predicts accurate equipment status to avoid the costly downturn.
Among applications, the upstream segment of this market is expected to hold the largest market share, and also witness the highest growth over the forecast period as well.
Which region is expected to be the leading market, and why?
Among regions, the market for AI in oil & gas in North America is estimated to hold the largest market share, owing to the increased adoption of AI technologies in oilfield operations and service providers and the presence of prominent AI software and system suppliers, especially in the U.S. and Canada. However, the Middle East and Africa is the fastest-growing market, mainly due to increasing investments in start-ups for implementation of AI, which is likely to further increase the demand for AI in the coming years.
What are the factors driving and restraining the market growth?
The growth of the global AI in oil & gas market is being primarily influenced by the following factors:
- Rising adoption of Big Data technology in the oil & gas industry
- Digitalization of the oil & gas industry
- Increasing investments in AI-related start-ups
- Growing pressure to reduce production costs and enhance efficiency
- Growing need for automation
Moreover, improving operational efficiency in the oil & gas industry is expected to further create good growth opportunities for this market.
On the flip side, high installation costs of AI and ambiguous regulatory guidelines for AI in the oil & gas market are the major factors expected to hamper the growth of this market to a certain extent. Moreover, concerns related to data privacy and increased risks of cybersecurity are the key challenges being faced by the players in this market.
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Key players and growth strategies adopted
IBM (US), Intel (US), Microsoft (US), Accenture (Republic of Ireland), Google (US), Microsoft (US), Oracle (US), Numenta (US), Sentient technologies (US), Inbenta (US), General Vision (US), Cisco (US), FuGenX Technologies (US), Infosys (India), Hortonworks (US), and Royal Dutch Shell (Netherlands) are the major players involved in the global AI in oil & gas market. These companies are adopting strategies such as partnerships and collaborations, new product launches, investments and expansions, and contracts & agreements in order to expand their horizon as well as to witness a sustained growth in the coming years.
