Oil and gas companies are increasingly turning to artificial intelligence to bolster financial strategies, unlocking working capital and improving cash flow resilience, according to a recent analysis by EY. The shift comes as the sector navigates the complexities of the energy transition and seeks to optimize performance in a volatile market.
The focus isn’t simply on cost reduction, but on fundamentally reshaping financial processes. EY’s finance transformation team, led by global leader Deirdre Ryan, is guiding clients – and implementing internally – agentic AI solutions to address longstanding challenges in financial planning and analysis (FP&A). This internal application, described as being “client zero,” is critical to building credibility and demonstrating the practical benefits of these technologies.
A key area of improvement lies in working capital management. Traditionally, oil and gas firms have faced difficulties in efficiently managing cash tied up in operations. AI-powered predictive automation is helping to identify and release this “trapped” capital, providing greater financial flexibility. This is particularly important as companies simultaneously invest in renewable energy projects and navigate fluctuating commodity prices.
The benefits extend beyond immediate cash flow. AI is also being deployed to enhance cash flow resilience – the ability to withstand unexpected shocks to the system. Predictive models can anticipate potential disruptions, allowing companies to proactively adjust their financial strategies and mitigate risks. This is a significant advantage in an industry prone to geopolitical instability and unpredictable demand.
EY’s approach emphasizes the importance of a robust data foundation. Scaling advanced technologies, including AI, requires an integrated data strategy. Without a solid data base, the potential of AI remains largely unrealized. The firm highlights the need for oil and gas companies to move beyond isolated use cases and embrace enterprise-wide AI implementation.
However, successful AI integration isn’t solely a technological challenge. It demands a collaborative ecosystem, involving trusted partners and a commitment to continuous innovation. According to EY, oil and gas companies can’t effectively navigate the rapid development of new technologies in isolation. Building out an AI-assisted energy company requires external expertise and a willingness to adapt.
The move towards AI in oil and gas finance is also being driven by the need to avoid past mistakes made during previous automation efforts. Ryan emphasizes the importance of anchoring AI initiatives on demonstrable value, gathering feedback, and fostering a culture of innovation. This contrasts with earlier attempts at automation that often lacked clear objectives and failed to deliver expected returns.
Leading the finance organization through this transformation requires clarity, purpose, and psychological safety, Ryan noted. Employees need to understand the rationale behind AI adoption and feel comfortable experimenting with new tools and processes. A supportive environment is crucial for unlocking the full potential of AI and ensuring a smooth transition.
The industry’s inherent risks, however, continue to present a challenge. EY research indicates that significant risks can delay the implementation of AI initiatives, potentially leading to unwise investment decisions and financial or operational failures. A cautious approach, coupled with thorough risk assessment, is therefore essential.
The adoption of AI in oil and gas finance is not merely a technological upgrade; it represents a fundamental shift in how companies manage their finances and position themselves for the future. By leveraging the power of AI, oil and gas firms can unlock new levels of efficiency, resilience, and strategic agility, enabling them to navigate the evolving energy landscape and capitalize on emerging opportunities.
EY’s finance transformation team is not only advising clients on this journey but also actively piloting AI solutions within its own finance and consulting functions. This “client zero” approach underscores the firm’s commitment to understanding and mastering these technologies firsthand, ensuring that its advice is grounded in practical experience. The firm’s internal platform, EYQ, is a key component of this strategy.
