Buzzwords like Digital or Agile change, disappear and evolve. Often its old wine in new sacks. The same is happening in the Oil and Gas industry with the digitalization or digitization Buzz, often used in IOF, DOF or RTOC contexts and lately in OT and IT integration, for example. Every discipline and profession seems to must come up with own definitions of contents, to the latter creating confusion.
The new Buzzword in Upstream is Artificial Intelligence, often named wrongly because what we really address are things like machine learning or more accurately, predictive and analytic algorithms, and automation. In the upstream segment of the industry AI has garnered some attention and talking about Digitalization will rapidly become unfashionable, which may as well be positive as nobody could agree on a common definition anyway.
The AI market in oil and gas has been estimated to reach US$2.85 billion by 2022, growing by a compound annual growth rate of 12.66 percent as per Oilprice.com. This AI market involves the mentioned predictive algorithms, automation systems, and analytics, which are not exactly artificial intelligence as said, but the trend is clear: oil and gas are adopting more and more software solutions to improve their results and bottom lines, with far-reaching consequences for Humans executing these tasks today.
As per Techopedia, Artificial intelligence (AI) is an area of computer science that emphasizes the creation of intelligent machines that work and react like humans. Let’s be clear about this, AI is out there to substitute as much as possible humans by doing the same faster, better, more secure and cheaper. So it will erase an undefined but high number of Upstream and related jobs.
AI will not only impact the asset, but disrupt the way Upstream business is done, so will affect all related stakeholders as well, and how operations are organized and executed. AI is not an asset thing! All current systems and organizations, connected or not, are built for human interaction, while AI is here for Thing to Thing interaction, aiming at excluding humans from the equations. That’s a new reality.
You may think I am exaggerating or this won’t happen or technology is not ready or this is unethical. That all may be true, or I may be right, but the bottom line is AI is here to stay and will grow up. Only yesterday Chinese Upstream movers announced this Conference in Xian for the 8th and 9th of November next.
One of the main agenda points is Technology applications in unmanned oil or gas field.
I am sure the topic will also go mainstream in a few weeks in Aberdeen https://www.engeniousglobal.com/. The word Digital has already disappeared from the Conference title which is now a Symposium and Exhibition for Upstream Innovation.
I will be in Aberdeen addressing the short-term consequences of innovations for upstream leadership. The Chinese solutions are evolving in an expanding and ambitious Communist Culture as where most other enterprises will have to develop in a capitalist bean counting setting.
Capitalist upstream management will have to lead their crews towards total transformation, knowing that the end of the road for them is one of important layoffs as that’s currently the way capitalism deals with any type of changes.
The large still undefined number of workers which will see their jobs in Upstream disappear, may not be all that willing to collaborate in their own slaughtering. So after Tech, Buzz, and Ops, there is a clear Politics layer on top of this transformation stack that needs to be addressed soonest.
I don’t think we will see a politician or Upstream CEO in Aberdeen yet, but I take bets on that there will be some in Xian in November next, taking notes on Chinese steps.