AI Powers Energy: ENRich 2024

At KPMG’s ENRich 2024 Innovation and Energy Conclave, Minister of Petroleum and Natural Gas, Hardeep Singh Puri, illuminated the immense role artificial intelligence (AI) is set to play in reshaping the energy sector. Under the theme "AI for Energy," he described the convergence of AI and energy as both timely and groundbreaking, setting the stage for a more efficient, sustainable future. He emphasized that AI's transformative power will not only drive the industry towards operational excellence but also support India’s vision for a “Viksit Bharat” by 2047.

Highlighting AI's potential in the oil and gas industry, Puri spoke of the significant strides already made through AI and generative AI (Gen AI) in areas such as safety and operational optimization. By harnessing real-time data and insights, AI empowers the industry to improve efficiency, which is critical as global energy faces growing complexity and heightened demands for sustainability. With geopolitical tensions and economic shifts in play, KPMG’s 2024 Energy, Natural Resources, and Chemicals (ENRC) CEO Outlook report finds 78 per cent of sector CEOs optimistic about economic growth over the next three years. This confidence reflects resilient energy prices and a broad-based demand for renewable and fossil fuel energy alike.

Anish De, Global Head of Energy, Natural Resources, and Chemicals at KPMG, remarked, “Amid a turbulent landscape of regional conflicts and economic uncertainty, CEOs are responding with optimism and agility.” He pointed out that Gen AI and ESG present both opportunities and risks, emphasizing that success will depend on clear strategic planning.

Takeaways From ENRich 2024
AI and Gen AI Transformation: The ENRC sector is now positioning AI as a key pillar for innovation. With 79 per cent of CEOs expecting AI to drive workforce upskilling instead of job cuts, the focus is shifting towards re-skilling and redeployment. Gen AI’s potential applications are expansive, with 58 per cent of CEOs making it a top investment priority. These leaders envision AI reshaping IT, marketing, R&D, finance, and strategy across the sector, with a strategic approach to ensure seamless integration and ethical governance.

ESG Commitments and Net-Zero Goals: Environmental, Social, and Governance (ESG) strategies now hold a firm place in ENRC agendas, with 72 per cent of CEOs integrating ESG into value-creation frameworks. Notably, 74 per cent are adapting climate-related communication to address stakeholder expectations, and over half anticipate substantial ROI on ESG initiatives within three to five years. While 58 per cent of CEOs are aiming for net-zero by 2030, they remain mindful of the challenges to decarbonization.

Evolving Workforce Dynamics: Workforce and talent management remain top priorities. Nearly all CEOs (93 per cent) are adjusting recruitment and retention strategies to balance the needs of an aging workforce with new generational expectations. The diversity and inclusion agenda is gaining ground, with 77 per cent of CEOs recognizing gender equity in leadership as a key driver of growth.

In this pivotal era, the ENRC sector has a unique chance to merge innovation with sustainability. By thoughtfully managing AI's integration, advancing ESG, and fostering an inclusive, skilled workforce, sector leaders can cultivate a future that is not only resilient but also aligned with the evolving landscape of global energy demands.