Adding artificial intelligence to energy production

Artificial intelligence helps oil and gas companies address multiple challenges.
Written by Bob Violino, Contributor
Image: Shutterstock

These are turbulent times for the energy industry, and oil and gas companies need every technology innovation they can get. Artificial intelligence (AI) might soon become one of the biggest competitive differentiators for these businesses.

As consulting firm McKinsey & Company noted in an April 2017 report, soaring demand in emerging markets, new energy sources, and the expected growth of electric vehicles are among the factors disrupting the industry.

Within the oil and gas industry, AI and machine learning are already being used for processing high volume data and to achieve operational efficiency, said Arunkumar Ranganathan, associate vice president and head of the domain and process consulting groups for energy, utilities, and services at technology consulting firm Infosys.

"AI techniques are yet to be applied [for] interpreting geophysical and geological functions and in other core business functions," Ranganathan said. "However, AI is gaining in popularity to further optimize, automate and improve business efficiencies and to enhance the efficacy of complex operations."

For example, AI is being used to optimize the drilling process and improve operational efficiency, leading to a reduction in drilling costs. "Applying AI techniques during operational planning and monitoring can drastically improve the success rate across the various stages of the process," Ranganathan said.

In addition, drilling engineers with the help of AI-driven, augmented reality-enabled platforms can have better control of the rate of penetration (ROP) improvement, drilling equipment condition recognition, real-time drilling risk recognition, and procedural decision making.

"Real-time drilling optimization, production monitoring and asset management are some of the areas where AI techniques have started gaining ground," Ranganathan said.

Recent Infosys research examining AI adoption in the resource and utilities sector shows that 81 percent of senior-level employees at these companies want to adopt AI to manage or organize data. To a lesser extent, they want AI to provide human-like recommendations for automated customer support/advice, or to process complex structured and unstructured data and to automate insights-led decisions.

About half of utility respondents reported they want AI to create a simulated experience that is essential to decision making processes.

"In the new pricing normal, which the industry is trying hard to adapt, everyone looks for operational efficiency in any task leading to cost reduction," Ranganathan said. "Artificial intelligence, by way of tools and techniques, can bring in huge transformation in the way the business is run."

AI techniques can add efficiencies in asset management, production optimization, drilling process, reservoir management, refining process and supply chain. "Oil and gas IT's age old data management problems can be solved by effective use of AI techniques," Ranganathan said.

More broadly, deploying AI will allow oil and gas companies to deliver what is essential for the grid of the future. "AI will be used to manage demand, balance grids, enable preventative maintenance and self-healing processes," Ranganathan said. "Finally, AI will enable more efficient and effective operations by improving accuracy and availability of [the] right information from data."

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