Market Size of AI In Oil And Gas Industry
Study Period | 2019 - 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 |
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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 increasing application of AI in reservoir analysis, drilling optimization, anomaly detection in pipelines, safety monitoring, emissions reduction, revolutionizing exploration, production, and environmental sustainability in the oil and gas industries is expected to fuel the growth of the market.
- The emergence of predictive maintenance powered by artificial intelligence in the oil and gas market is transforming companies in the sector's asset management. This ensures better reliability and reduces operational risks, which is expected to drive the growth of the market in the future.
- For instance, in October 2023, C3 AI, the Enterprise AI application software company, announced that the C3 AI reliability application would include predictive maintenance software developed by Shell. This would strengthen the use of C3AI's AI ecosystem to maintain the oil company's critical equipment. This shows the increasing adoption of AI platforms in the oil and gas sector, supporting market growth.
- AI technologies present the potential for increased efficiency in oil and gas operations to find patterns, streamline workflows, automate decision-making, and examine enormous amounts of data from sensors, machinery, and industrial processes. Predictive maintenance solutions, equipped with artificial intelligence (AI), can forecast equipment breakdowns beforehand, allowing oil & gas businesses to plan maintenance tasks in advance, save downtime, and maximize asset usage.
- The global AI in the oil and gas market is driven largely by the growing trend of lower production costs. In the face of fluctuating oil prices and shifting market dynamics, oil and gas businesses increasingly seek artificial intelligence (AI) technologies to optimize operations, streamline procedures, and alleviate costs.
- AI adoption is accelerating across industries, including the oil & gas sector, as it processes massive datasets across the value chain. AI can extract more value from data through machine learning that uncovers hidden insights. Optimizing complex operations enables oil & gas companies to reduce costs and enhance productivity.
- The International Energy Agency (IEA) reported that after Russia invaded Ukraine, Russia cut 80 billion cubic meters (BCM) of pipeline gas supplies to Europe, which caused an energy crisis in the region. This impacted the operations of midstream and downstream companies in the oil and gas industry, restricting market growth.
- The European Union's objective to become self-sufficient in energy production with the emergence of renewable source-based energy initiatives can potentially hinder the growth of the oil and gas industry in the European region. This indirectly impacts market growth by limiting the implementation scope of AI solutions and services in the oil and gas industry.
- The COVID-19 pandemic led to a global shutdown and decreased economic activity worldwide, restricting the demand for oil used for industrial activity, travel, and other applications. The international crude oil price also fell during the COVID-19 pandemic, reducing production exploration activities in the oil and gas industries worldwide and impacting AI technology adoption in the market studied.
AI in Oil and Gas Industry Segmentation
The oil and gas industry has been investing in artificial intelligence (AI) to save money. From boiler diagnostics to actual drilling, AI is increasingly used to enhance various industries' upstream, midstream, and downstream processes. AI is used in the exploration and production sector for quality control, predictive maintenance, and prediction planning. Services, such as professional and managed services, are also included in the report's scope.
The scope of the study focuses on the market analysis of AI in the oil and gas market, and market size encompasses the revenue generated through AI solutions for the oil and gas industry offered by various market players operating in the market. The study also tracks the key market parameters, underlying growth influencers, and major vendors operating in the industry, which supports market estimations and growth rates during the forecast period.
The AI in the oil and gas market is segmented by operation (upstream, midstream, and downstream), by type (platform, services), and by geography (North America, Europe, Asia-Pacific, Latin America, and Middle East and Africa). The market sizes and forecasts are provided in 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 Size Summary
The AI in oil and gas market is poised for significant growth, driven by the increasing integration of artificial intelligence technologies across various industry operations. These technologies are being applied to enhance reservoir analysis, optimize drilling processes, detect anomalies in pipelines, and improve safety monitoring, among other applications. The adoption of AI is transforming asset management through predictive maintenance, which enhances reliability and reduces operational risks. This shift is supported by advancements in data analytics and digital twins, which are expanding the capabilities of predictive maintenance technologies. Companies like ExxonMobil and Huawei are leveraging AI to analyze vast datasets for oil exploration and to optimize production processes, thereby increasing efficiency and reducing costs. The market's expansion is further fueled by the need to lower production costs amid fluctuating oil prices and the pursuit of environmental sustainability through early detection of potential hazards.
North America, particularly the United States, is a leading region in the AI in oil and gas market, benefiting from a robust economy, widespread AI adoption, and significant investments in research and development. The region's well-established infrastructure and the presence of major AI software suppliers contribute to its dominance. The integration of AI into exploration and production activities is revolutionizing the industry, with companies like Nabors Industries Ltd and Corva LLC utilizing AI to enhance drilling efficiency and reduce operational costs. The market is characterized by a fragmented landscape with both global players and SMEs, with key companies like IBM, Microsoft, and C3.AI Inc. actively engaging in partnerships and acquisitions to strengthen their market position. The ongoing collaborations and technological advancements are expected to drive further growth, as seen in initiatives by companies such as Wintershall Dea and SLB, which are exploring innovative AI applications to enhance energy production and operational efficiency.
AI In Oil And Gas Market Size - Table of Contents
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1. MARKET INSIGHTS
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1.1 Market Overview
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1.2 Industry Attractiveness - Porter's Five Forces Analysis
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1.2.1 Threat of New Entrants
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1.2.2 Bargaining Power of Buyers/Consumers
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1.2.3 Bargaining Power of Suppliers
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1.2.4 Threat of Substitute Products
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1.2.5 Intensity of Competitive Rivalry
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1.3 Assessment of Macroeconomic Factors on the Market
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1.4 Technology Snapshot - By Application
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1.4.1 Quality Control
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1.4.2 Production Planning
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1.4.3 Predictive Maintenance
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1.4.4 Other Applications
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2. MARKET SEGMENTATION
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2.1 By Operation
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2.1.1 Upstream
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2.1.2 Midstream
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2.1.3 Downstream
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2.2 By Type
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2.2.1 Platform
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2.2.2 Services
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2.3 By Geography***
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2.3.1 North America
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2.3.2 Europe
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2.3.3 Asia
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2.3.4 Australia and New Zealand
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2.3.5 Latin America
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2.3.6 Middle East and Africa
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AI In Oil And Gas Market Size 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.