A newly formed consortium of oil and natural gas majors is gearing up to deploy the breakthrough technology of Blockchain in the United States. OOC Oil and Gas Blockchain Consortium, which is based in Houston is assertive that the Blockchain technology can be helpful to improve the administrative efficiency of the industry.
The Contract has been given to Houston based firm Data Gumbo which will develop the technology for water handling services in Dakota fields.
Technology will be implemented on an experimental basis in the Bakken Shale oilfields of North Dakota and later on will be extended across the globe. It is expected that this would simplify the processes, reduce the cost of the operations, and will administrative mismanagements.
Members of the consortium:
ConocoPhillips, Equinor, Chevron Corporation, Hess, Exxon Mobil Corporation, Royal Dutch Shell, Marathon Oil Corporation are some of the members of the OOC Oil and Gas Blockchain Consortium.
Objectives of the consortium:
- Achieving high data security, processes, and compliance.
- Creating new standards for the network, including government agencies.
- Constant evaluation of proposed benefits including faster transactions, cost-cutting, security standards, transparency, dispute settlements, open energy trading, etc.
Use of Blockchain technology in the O&G industry:
The operations of this industry are categorized at 3 levels: Upstream, Midstream, Downstream
Upstream operations are related to oil exploration and ground-level research. Secured data transmissions and data management are vital at this level. Also, the mismanagement in coordination, high labor charges, and time-consuming attestation process can be significantly reduced with blockchain technology. Blockchain could simplify most of these complexities.
Midstream operations comprise storage and transport of the resources. Good coordination and inspection of transport sources, restructuring the data, transparent operations can be possible here with the technology.
Whereas Downstream operations involve the supply and allocation of the end products.
The technology will supposedly be helpful to gain more profits with lower operational costs, less processing time, more efficiency, and improved resource distributions.
Rebecca Hoffmann, Chairperson of the board of Directors of the OOC, said, “Creating the OCC Oil and natural Gas Blockchain Consortium is a significant step towards establishing key Blockchain standards, frameworks, and capabilities for the oil and gas industry.”
O & G trading sector has already been using this technology to carry out deals. In 2017, Trafigura Ltd, a Swiss trading firm partnered with Natixis and IBM to create a platform for oil deals.
Recently Sinochem group has been in discussions with Macquarie Group and Royal Dutch Shell for building a blockchain platform.