We use cookies
to help provide you with a good experience on our website. By continuing to browse the website, you are agreeing to our use of cookies.

7 ways Blockchain can revamp the oil and gas industry

GO DIGITAL ENERGY

7 ways Blockchain can revamp the oil and gas industry

Blockchain is believed to have a potential to greatly impact the oil and gas industry by cutting down on operational time and costs while also introducing more transparency to the industry.

The technology recently garnered headlines when a group of seven oil companies, including American giants like ExxonMobil and Chevron, agreed to form the first industry blockchain consortium, according to a press release. The consortium aims to explore the potential benefits that blockchain technology can deliver to the space.

In essence, blockchain is an immutable digital ledger of economic transactions, that is secured through cryptographic methods and can be programmed to record the transaction of anything of value. The blockchain is monikered so because the information is stored in ‘blocks’ on a ‘chain’ but not in the physical sense. One of the inherent qualities of a Blockchain network is that it is decentralized, meaning it is not owned by a single entity, instead a network of computers (nodes) makes up a blockchain network.

Below are 7 potential use-cases of blockchain technology in the oil and gas industry

1.

Crude oil transactions could be digitized– Using blockchain, crude oil transactions can be digitized that ensures enhanced security, improved transparency and optimized efficiency. Natixis, a French corporate and investment bank was the first to pioneer a blockchain solution in commodity trade for US crude oil transactions.

2.

Improved trust among parties in the industry- A private blockchain network could safely store the track record of employee and contractor certifications (H2S training, first aid, welding, etc). On top of boosting trust between companies and contractors/ employees, such a blockchain network could also help cut down on hiring costs while ensuring improved job safety and performance.

3.

A cryptocurrency pegged against Oil- With oil being one the most valuable non-renewable energy sources in the world, a cryptocurrency pegged to it could be a viable replacement to traditional financial transactions. On top of this, such a cryptocurrency could enable direct transfer of value between various parties in the industry without the need for a trusted intermediary like a bank.

4.

Augmented compliance– The Oil and Gas industry is among the most heavily regulated in the world with protocols deriving from various regulatory authorities from environmental to taxation. Regulatory authorities will be able to maximize visibility in the industry as all the transactional data is stored on a blockchain network which can be accessed in real time.

5.

Enhanced land record management- It is critical for Oil and gas companies to properly manage land sale records which represent millions of dollars worth investments. The traditional process of maintaining such a record is cumbersome and is prone to forgery and other illicit activities. Such an important piece of documentation could be stored on the blockchain, which can create an immutable record of land ownership, transfer and value. In Georgia and Ghana, where there are high levels of land ownership disputes, blockchain technology is being explored as a viable solution.

6.

Improved data storage for Internet Of Things- IOT is a system of interconnected computing devices or mechanical machines that are able to transfer data over a network. The Oil and Gas industry relies heavily on IOT to devices to monitor operations and increase their efficiency. But the catch is, current IOT models depend on centralized models of communication like a server/ client model. Despite being in close proximity with each other, these IoT devices have to transfer data over the internet and heavily depends on centralized storage solutions which could be at risk of cyber attacks.

7.

Hydrocarbon tracking– blockchain technology can be used to track regulated substances effectively at each stage of the supply chain process. This can help improve accountability in the industry.

Source :  Zycrypto

Relevant news

GO CIRCULAR
BASF is piloting an innovative blockchain project
BASF is piloting an innovative blockchain project in the province of British Columbia.
GO DIGITAL ENERGY MIDDLE EAST
Why Middle East oil and gas companies are embracing blockchain
Overview of the latest trends by CIO.