How AI is Helping Europe's Oil and Gas Industry Operations

Leading companies in Europe's oil and gas industry are increasingly leveraging AI to optimise operations across its value chain as the region faces growing energy security concerns, according to a new research report published today by Information Services Group (ISG), a leading global technology research and advisory firm.

Findings in the 2024 ISG Provider Lens Oil and Gas Industry – Services and Solutions report for Europe finds AI is being used by major companies such as bp, Shell and TotalEnergies to enhance operational efficiency in exploration, production, refining, predictive maintenance and supply chain management.

Offshore production gains increased attention

The sector increases its use of technology as it improves operations comes at a vital moment for the region's oil and gas industry. As offshore production gains increased attention amidst the energy security concerns caused by the conflict in Ukraine – with the North Sea a focal point for exploration and production. 

Along with this, the European Union (EU) must be ready to give aid to its member states moving away from fossil fuels, to avoid destabilising the region. Europe's oil and gas demand is projected to decline by 25 to 50% in the next five years, the report notes.

"Europe's upstream oil and gas industry is at a turning point," says Julien Escribe, Partner and Managing Director, ISG SEMEA.

"The industry must increase production in the short term to combat supply challenges while at the same time prepare for a lower-carbon future. Technology is playing an increasingly important role in the transition."

Supply chain disruptions means stronger measures 

Supply chain disruptions, particularly in relation to the war in Ukraine, are pressuring Europe's oil and gas producers to adopt stronger measures for managing their assets, complying with stricter country and EU regulations and controlling costs.

Producers are meeting these challenges by turning to technologies such as generative AI (GenAI), machine learning (ML) and digital twins to improve their existing enterprise asset management (EAM) processes as well as enhance their cybersecurity. Being asset-intensive, the oil and gas industry has been slower than most at adopting digital technologies.

However, with petroleum and natural gas prices likely to increase while demand decreases, amid the EU's continued push for net-zero emissions, producers are forced to find ways to improve efficiency while reducing costs.

"Geopolitics, geology and ecology are conspiring to shift the world's energy trade patterns," adds Jan Erik Aase, Partner and Global Leader, ISG Provider Lens Research.

"The providers that emerge as leaders in the oil and gas sector will be the ones that guide producers through the maze of new, and sometimes conflicting, energy regulations; help them shift their capital allocations to invest in greener, more sustainable processes and improve the security of their supply chains."

The increase of cybersecurity threats

There are other trends being explored in the report, which includes the increase of cybersecurity threats to the EU's critical infrastructure. With providers in the oil and gas sector reacting to the new European Commission Cyber Resilience Act by bolstering their cybersecurity services, particularly related to their use of cloud-based storage, data and infrastructure.

The 2024 ISG Provider Lens Oil and Gas Industry – Services and Solutions report for Europe evaluates the capabilities of 33 providers across four quadrants: Enterprise Asset Management, Next-Gen IT/OT Services, Data Management and Cloud Computing and Energy Transition Services.

The report names Accenture, Capgemini, Deloitte, IBM Consulting, Infosys, TCS and Wipro as leaders in four quadrants each.

Cognizant is named a leader in three quadrants. EY, Hitachi Digital Services and LTIMindtree are named leaders in two quadrants each. LTTS and PwC are named leaders in one quadrant each.

The 2024 ISG Provider Lens Oil and Gas Industry – Services and Solutions report for Europe is available here.

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