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Intelligent Automation in Oil & Gas: Top 4 Benefits in 2024

Companies in the oil and gas industry are slower than companies in other industries in their digital transformation. Still, they have started to invest in smart technologies as the industry recovers from the effects of COVID-19. According to Frost & Sullivan, the global oil and gas automation market is expected to reach $25 billion by 2025 with a compound annual growth rate of 7.5%.

Intelligent automation is an emerging technology that combines RPA with AI capabilities which can help O&G companies to automate tasks that require human judgment. In this article, we will explore four ways intelligent automation can help downstream, midstream, and upstream O&G companies to improve productivity and modernize their operations.

1. Improves productivity with back-office automation

As in other industries, businesses in the oil and gas industry have numerous back-office processes that require human judgment to handle. This makes them harder to automate than simple rule-based tasks. Intelligent automation tools integrate AI and NLP capabilities into their bots, enabling them to understand the context of a document, extract required information, and make decisions with extracted information. 

This helps automate complex back-office processes such as:

  • Recruitment: Intelligent bots can gather and screen resumes, automatically send emails to candidates about their results,
  • Payroll processing: Bots can collect relevant data from company systems to adjust compensation, calculate commissions, and generate payroll reports,
  • Reporting: Bots can collect data from sources such as SCADA systems or production processes and generate custom reports for different stakeholders.
  • Invoice processing: It can take more than 30 days for an upstream oil and gas company to process an invoice. Intelligent bots can extract data from invoices in different formats and enter the information into company systems.

These are only a few examples of processes that can be automated with AI-powered bots. Feel free to check our article on back-office automation for 40+ other examples.

2. Enables efficient asset management and maintenance

Oil and gas companies, especially upstream and midstream ones, use various expensive and complex assets that need to be tracked, managed, and maintained efficiently to:

  • Prevent downtimes,
  • Increase production,
  • Extend asset life,
  • Reduce costs.

Maintenance of these equipment accounts for 10-15% of total production costs for oil and gas companies. Smart maintenance can reduce this cost by 10%.

By using real-time data from interconnected sensors such as the Industrial Internet of Things (IIoT), intelligent asset management can help businesses in:

  • Optimizing asset usage: Based on historical usage data, intelligent bots can forecast future demand and identify required assets to fulfill orders.
  • Predictive maintenance: Intelligent bots can predict upcoming asset failures, alert staff when maintenance is required and set scheduled tasks.
  • Preventing leakages: Intelligent bots can monitor incoming data from pipes, pumps, or filters and alert staff in case of an anomaly. This reduces manual checks and avoids financial and environmental costs.

3. Improves supply chain management and logistics

According to McKinsey, delivery logistics constitute 10-15% of total production costs for oil and gas companies. Using smart automation technologies is key to improving supply chain management and reducing associated costs. By leveraging machine learning and NLP techniques, intelligent automation can:

  • Reduce manual back-office tasks related to supply chain management, such as document processing and inventory management,
  • Increase supply chain visibility with real-time data from supply chain assets,
  • Improve forecasting accuracy about prices, inventory levels, etc.

You can also check our articles on hyperautomation in supply chain and supply chain automation.

4. Ensures regulatory compliance

The oil and gas industry is one of the most regulated industries in the US. These regulations are aimed to:

  • Reduce the negative environmental impact of oil and gas drilling, such as reducing greenhouse gas emissions or protecting water quality,
  • Protect public and worker health,
  • Protect natural and cultural resources.

Non-compliance with such regulations can result in fines up to $30 billion, in addition to reputational damage. AI-powered automation integrated with compliance software can help environmental health and safety (EHS) departments in regulatory compliance tasks by:

  • Monitoring emissions from operations or the supply chain and alerting staff if emissions breach a threshold,
  • Automatically creating regulatory reports by gathering and integrating data from disparate systems,
  • Monitoring regulatory announcements for future changes.

If you have questions about automation in the oil and gas industry, feel free to reach us:

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Cem Dilmegani
Principal Analyst
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Cem Dilmegani
Principal Analyst

Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.

Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.

Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.

He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.

Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.

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