Oil and Gas two of the most critical natural resources required to sustain human life on earth. The key driver for almost all the industries, oil and gas are subjected to a lot of market disruption. How about implementing Blockchain technology in this domain? Some might find it bizarre while other might think how Blockchain will find an application in this field. Well, in this blog I will be highlighting how oil and gas companies can use Blockchain to enhance their services.
Distributed ledger Blockchain technology has its roots on Bitcoin and other cryptocurrency functionality, but when it has broken the ceiling of cryptocurrency exchange, and now Blockchain find myriads of applications in the different field, including oil and gas.
Although there are different opinions regarding the use of Blockchain and its future prospects the researchers do recognize the potential of Blockchain and trying to find the implementation of the same. The reason for slow adoption of Blockchain technology is that the industry lacks the knowledge and information about this technology. As per the survey conducted by Deloitte in 2016, two out of five senior executives of some of the biggest companies in the US had little or no information about Blockchain technology. 55% believed that the companies would gain a competitive advantage if Blockchain technology is implemented correctly. Till now we have not seen some significant influences of Blockchain technology in the oil and gas company.
Is Blockchain’s Future in Oil and Gas
When it comes to recognizing the potential of Blockchain in oil and gas industry, then we have seen various aspects of the same. One of the significant areas of application of Blockchain in oil and gas can be supply chain management. Most of the companies like Wallmart and Amazon are using Blockchain to manage their supply chain.
We also know that Blockchain eliminates the need for an intermediary; it can offer transactional verification across a network without relying on a central authority. This will further reduce the operation cost, allows the security of data and other relevant information and more also improves the speed of transaction.
Is there anything that’s happening?
Well, I cannot say that things are changing drastically, but yes there are some steady changes in the oil and gas field. For example, BHP Billiton announced that it would start implementing Blockchain technology to enhance the supply chain management and secure the real-time data generated during delivery.
The supply chain is an excellent direction to assess the practicality of Blockchain technology in the field of oil and gas.
Benefits of using Blockchain Technology
- Track provenance for authenticity and quality control-
We all know that Blockchain transaction ledger can trace the origin of raw materials and products from the supplier to the retail channels. The ledger can include digital data linked to unique identifiers on labels. This label can be traced on the Blockchain ledger. In case any label is not detected in the Blockchain data, then we get to know that the product is counterfeit.
Moreover, complete information about the product, its source of origin and the placed it has gone through, and it gives better knowledge about the product and its usage.
- Asset cycle management
Easy tracking of data is one of the critical features of the Blockchain. We can use Blockchain to track which suppliers produced the components.
In case there is a certain breakdown, the operator can easily consult data the data and can get to know when and where the component was produced.
The manufacturers can use the data to trace whether it has undergone regular maintenance or not.
- Enhanced visibility
We can use the Blockchain concept to streamline regulatory filings and to report. Regulators require companies to provide large amounts of data that can be analyzed to detect the issues of non—compliance or other regulatory matters. The current technologies are efficient, but they are not fast. Blockchain, on the other hand, provides quick access to information and also helps in easy extortion of data. Furthermore, the data is tome-stamped, so we are assured that there is no change in the data and it is authentic.
- Enabling performance-based contracts
Apart from assent management Blockchain can support new business models. Blockchain creates a new business model for oil and gas related equipment maintenance-as-a-service, under which the operational performance of the critical asset is not only determined by the cost of the equipment but also various other factors like operating cost, maintenance, uptime, downtime, etc.
- Once a service –level agreement is determined, the sensors can communicate to the Blockchain and the performance factors which include cost, uptime, downtime, etc. can be used to determine the payments.
Thus, we see that Blockchain finds myriads of applications in the oil and gas industry as well. Although, at a small level but if implemented correctly, Blockchain can create a huge impact. Innovation is good but when it is monetized, innovation becomes great, and that’s what we are looking at when we talk about using Blockchain technology.