Two main features of the blockchain have been identified which are useful for the oil and gas industry: the management of the supply chain and the disintermediation of the central authorities for data verification.
Going into more detail, it is possible to identify 3 advantages in the use of the blockchain in the oil and gas sector:
- Resource cycle management and quality control
Soon it will be possible to implement the blockchain to track the origin of raw materials (the famous “made in”) thanks to the recording of authentic data on the distributed ledger. In this way, as in the case of the Amazon and Walmart supply chains, if the product has the label, it is possible to verify the entire supply chain even for the barrels of oil, allowing the quality control department to analyze the various steps that the product has made, the origin of the components and the reputation of the actors/suppliers who have interacted with the product itself.
- Improvement of data access by regulatory bodies
By recording the legal data on the blockchain, when it comes to some special rules and/or possible reports, in cases of non-compliance problems or other regulatory issues, entities can request access to the distributed ledger and extrapolate the necessary information quickly and transparently, with the knowledge that data, once recorded, is no longer modifiable and for this reason it is authentic.
- New business model for maintenance
With the blockchain, it is possible to create a new business model related to the maintenance service of the equipment used in the oil and gas sector, so that during the operational performance phase, not only the cost of the equipment is taken into account, but also its performance, ie net of related costs such as maintenance and other operating costs, uptime and downtime.
The most revolutionary use cases for the oil and gas sector are certainly the blockchain solution introduced by Natixis, IBM and Trafigura in 2017, described in this way:
“Key benefits of the solution include reduced cash cycle times, improved efficiency via lower overhead costs and fewer cost intermediaries, increased transaction visibility to help reduce the threat of tampering, fraud and cyber-crime, and the creation of transparent transactions by using shared processes and recordkeeping”.
Another recent case of blockchain application in the industry was the introduction of Petro, the crypto launched in February 2018 and controlled by the Venezuelan government that apparently would be backed by oil and valued at the same price.
Among the most imminent is the blockchain platform that the oil industry giants Shell and BP, along with other companies in the Vakt consortium, plan to launch by the end of 2018.
The blockchain platform will be used to automate post-trade processes in the energy sector.
The group explains:
“This not a trading platform, nor a settlement platform – there is no crypto currency involved. But it is everything in between: deal recap; confirmation; contract; logistics (the really big element in all this) — and invoicing”.