IBM Using AI Tech to Boost Efficiency in Oil and Gas Sector

- April 3rd, 2018

Tim Workman of IBM’s Calgary-based Natural Resources Solutions Center explains how AI can help oil and gas companies with sustainability and efficiency.

The green energy revolution is undeniably in full swing, with renewable sources like wind and solar continuing to gain traction. 

Even so, it will take time for these new technologies to supplant traditional power sources. In fact, as of 2015 only 13.4 percent of the world’s energy supply came from renewable sources.

To that end, many oil- and gas-focused companies are working to improve their business models by taking new approaches to safety, risk management and more. And some are looking to high-profile partners for help.


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IBM (NYSE:IBM) is one major player that’s stepped forward to offer its assistance. The company recently announced a four-year program that will see its Calgary-based Natural Resources Solutions Center (NRSC) partner with oil and gas firms. According to NRSC Director Tim Workman, the idea is to use artificial intelligence (AI) to work toward improvements in sustainability and operational efficiency.

“A lot of oil and gas companies have access to huge amounts of data,” Workman told the Investing News Network via phone. “It’s in their information systems, it’s in sensors that come off of their equipment, it’s in the electric systems that power their facilities. [But] very few companies really understand how they can leverage all the information that’s in there.”

That’s where IBM comes in. According to Workman, the company will use its AI platform Watson “to help take all of that information in, structure it, analyze it and ideally come up with insights that people alone might not have found just looking at the raw data.” 

Watson has plenty of experience doing just that, having come to prominence in 2011. “Most folks remember when we used Watson to beat Jeopardy,” Workman joked — the “supercomputer” beat 74-time Jeopardy winner Ken Jennings and 20-time champion Brad Rutter in competition that year.

Since then, Watson has been given more practical jobs. Notably, said Workman, it’s seen traction in the healthcare and financial services arenas, where its ability to “create linkages and insights that people previously hadn’t seen” has proven valuable.

Workman hopes to see similar success with the NRSC program, and noted that interest is already strong. IBM called on nearly two dozen of its clients last year to gauge their interest, and had 12 respond saying they wanted to participate. Since then, other companies have approached IBM about joining in. Plains Midstream Canada, Minestar Group and OpsMobil are among the firms that have signed on.

What we’ve found is that even looking at different types of companies, a lot of the problems that they’re struggling with are very common across the different applications. So we’ve really resonated with companies in terms of drawing business value,” said Workman. 

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The program is wide ranging, and has a number of goals — in its first year alone, it will focus on work capabilities, utilization capabilities and asset capabilities. Workman explained that managing those high-level objectives will involve breaking them into a series of six- to nine-month development cycles.

“The goal is that we’ll put solutions in place to the rate of two or three … per year, so over the run of four years we’ll see a fairly good number of solutions deployed,” he said.

When asked why IBM chose to create a program targeting the oil and gas sector, Workman said it came about in large part because of Canada’s strong connection to the natural resource sector. “At a very high level, any sector in natural resources in Canada is critical to our economy,” he commented.

Because of that connection, IBM was keen to do its part to help modernize the oil and gas space. “IBM wants to see how we can help these sectors become much more sustainable, reducing the overall impact on the environment,” he said, adding, “in oil and gas specifically [over] the last three years the oil price downturn has really highlighted the need for companies to get as much advantage as they can in the way they operate to drive down costs, maximize revenue and ultimately improve their profitability.”

Overall, he said, IBM is eager to work with companies that are interested in using emerging technologies to leverage their business. “If there are innovative companies that want to help us push the bar a little bit higher, and hopefully help themselves move further along … this is a good opportunity.”

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.


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