Oil, Gas, AI and the Promise of a Better Tomorrow
The price of oil has fallen over 60% since summer 2014.
With all of the negativity portrayed in the day-to-day headlines, many forget that the oil and gas business is one of the largest, most globally important industries in the world.
All is not lost. In fact, there is much to gain.
There is a huge amount of opportunity in the oil and gas industry, notably because it has weathered times like this before.
Innovating the Old
One of the things that happens during downturns is that companies innovate. As we have seen historically, the companies that emerge the strongest during these times are the ones who adopt innovative technologies to promote growth.
These companies are now embracing technologies like machine learning and artificial intelligence (AI) to optimize operations in all areas — most notably in upstream drilling and downstream production.
To delve further into how they are being used, machine learning AI algorithms are being fed by down-hole (MWD) and surface (EDR) data systems to predict the likelihood of catastrophic or downtime-related events.
For example, what if you had the ability to predict events like kicks or a blowout? This would be significant for two unique reasons.
Blowouts are catastrophic, often resulting in the loss of life. Look at how the Deepwater Horizon blowout affected BP operations. On top of the loss of life, BP had over $42.2 billion in fines, reparations, and court costs.
Identification of potential blowout conditions long before they occur, allows for control system settings to be modified for optimal production. This means that not only is the likelihood of a catastrophic event reduced, the potential for revenue is maximized.
How is this done?
Predicting the Dynamic
One of the unique capabilities of machine learning is the ability to identify how shifting conditions result in different events.
Instead of just measuring pressure differentials between zones, machine learning algorithms can look at a variety of data. They can look at asset operational data, pressures, mud properties, temperature and any other data to understand exactly what is happening down-hole at that specific well.
More impressively, these algorithms are able to do this without ever leveraging the physics-based equations that have been the staple of this industry for decades.
All of this data is then analyzed in an automated fashion to understand if the existing conditions could lead to a non-optimal event such as a kick, blowout, or wellhead failure.
It can then craft recommendations to feed into the control system to not only minimize the odds of an event occurrence, but also to maximize output.
Striking (Technological) Oil
Machine learning and AI are redefining how the oil and gas industry operates on a daily basis. They are helping to cut costs, optimize efficiency and, in the end, push through another downturn.
While prices will always fluctuate, by capitalizing on innovation, the O&G industry will continue to thrive.