AI in Oil and Gas Market is expected to grow at a CAGR of 12.66%, from 2017 to 2022, to reach a projected market size of USD 2.58 billion by 2022. This growth is mainly attributed to the increasing demand for big data technology in the oil & gas industry to augment E&P capabilities, growing need for automation in the oil & gas industry, and increasing investments in joint venture capitals.
AI in Oil and Gas Market is dominated by a few global players. These include Accenture (Republic of Ireland), Intel (US), Google (US), Microsoft (US), IBM (US), and Oracle (US). Partnerships, joint ventures, and new product launches have been the key strategies adopted by major market players toward organic growth from 2014 to 2017.
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Reducing costs and increasing operational efficiency in the oil & gas sector stands as strong macro drivers for this market. AI systems help in decision making, identifying the location of new reserves, real-time drilling optimization, Exploration and Production (E&P) life cycle, and drilling capacity. While the fluctuations in oil prices on oil-dependent sectors and lack of stringent regulatory guidelines for AI in oil & gas market are some restraints affecting AI in Oil and Gas Market.
Regionally, North America is projected to account for the maximum market share during the forecast period due to higher investments in joint ventures and start-ups for AI in Oil and Gas Market. The Middle East and Africa is expected to be the fastest growing market due to increasing investments in start-ups for AI implementation during the forecast period. Most of the reserves in the country are maturing and starting to show a decline in production. Hence, with declining production and the search for new unconventional resources, AI in oil & gas market in the country is expected to grow at a fast pace.
By function, the field services segment is expected to grow at the highest CAGR during the forecast period. The field services segment mainly includes coiled tubing services, well completion, equipment and services, drilling and completion, drilling waste management services, pressure pumping services, well intervention services, and wireline services. The global demand for field services in the function segment is driven by some of the largest oil & gas reserves in Venezuela, Saudi Arabia, Canada, and Iran. The discovery of new reserves is also increasing the demand for oil & gas field services in areas such as Brazil and West Africa. Thus, this would create opportunities for the adoption of AI technologies in these countries, thereby, increasing the demand for AI in Oil and Gas Market during the forecast period.
The demand for software-based artificial intelligence is expected to increase swiftly in the next five years. This growth is attributed to the higher demand for artificial intelligence in the North American region from the upstream oil & gas applications.
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The upstream AI in Oil and Gas Market is set to grow in the next five years. AI systems are capable of automating and optimizing initial stages of the E&P life cycle such as seismic, geology, drilling, petrophysics, reservoir, and production. They have the potential to reduce risks, enhance productivity, and minimize operational costs. Precise targeting and ability to identify drilling locations can help to maximize the Return on Investment (ROI) on any drilling activity.