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Europe's Oil and Gas Industry Turning to AI to Improve Operations Amid Energy Security Concerns

1. Europe's oil and gas industry increasingly uses AI for operational efficiency. 2. Demand for oil and gas is projected to decline 25%-50% in five years. 3. Geopolitical tensions push for stronger asset management and cybersecurity measures. 4. Major suppliers identified include Accenture, Deloitte, and IBM Consulting. 5. Capgemini recognized as the top performer for customer experience in this sector.

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Why Bullish?

The article highlights increasing technology adoption, which can enhance III’s business model. Past examples show technology-driven firms tend to outperform during industry shifts.

How important is it?

The article outlines key trends in sectors relevant to III's services. Increased AI adoption aligns with III's core business focus.

Why Long Term?

The transition towards AI and digital solutions suggests lasting impacts on efficiency. Historical trends indicate firms investing in technology see sustained growth.

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LONDON--(BUSINESS WIRE)--Europe’s oil and gas industry is increasingly leveraging AI to optimize 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) (Nasdaq: III), a leading global technology research and advisory firm. 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. The sector’s growing use of technology to improve operations comes at a pivotal moment for Europe’s oil and gas industry. Offshore production is gaining increased attention amid energy security concerns caused by the war in Ukraine, with the North Sea a focal point for exploration and production. At the same time, the European Union must be prepared to assist member states in moving away from fossil fuels, to avoid destabilizing the region. Europe’s oil and gas demand is projected to decline by 25 percent to 50 percent in the next five years, the report notes. “Europe’s upstream oil and gas industry is at a turning point,” said 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, particularly related to Russia’s ongoing conflict with neighboring 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 European Union’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,” said 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 report also explores other trends, including increasing cyber security threats to the EU’s critical infrastructure. Providers in the oil and gas space are 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. For more insights into the challenges faced by Europe’s oil and gas providers, and how software providers help address those challenges, see the ISG Provider Lens™ Focal Points briefing here. 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. In addition, Cyient, LTIMindtree, LTTS and Publicis Sapient are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each. In the area of customer experience, Capgemini is named the global ISG CX Star Performer for 2024 among oil and gas industry services and solutions providers. Capgemini earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry. The 2024 ISG Provider Lens™ Oil and Gas Industry – Services and Solutions report for Europe is available to subscribers or for one-time purchase on this webpage. About ISG Provider Lens™ Research The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the UK, France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage. About ISG ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

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