Blockchain technology is coming to the oil sector
The world’s most important industry has been carrying on without any significant changes in its day to day routine for far too long. But now, the new tech on the block has its sights set on the multi-trillion-dollar oil and gas sector.
It’s official: Blockchain technology has infiltrated Big Oil. The hype behind blockchain has reached a full-blown frenzy. And for good reason.
The technology, which creates secure ledgers for digital transactions and rapidly accelerates the pace at which transactions can be made, has the potential to disrupt every major industry: real estate, shipping, banking and healthcare.
Blockchain is truly revolutionary, and Big Oil is finally catching on.
In an industry that has used technology to reduce breakeven costs to all-time lows, create gigantic drilling rigs run by robots, and even tap reserves located 10 miles below the sea, the oil and gas sector has been slow to jump on the blockchain bandwagon… until now.
According to a report from the World Economic Forum from 2017, a digital transformation has already swept across the energy industry.
Now, blockchain is taking it one step further.
Majors like BP and Shell are making headlines with plans to utilize blockchain tech to completely transform how energy is bought and sold.
Smaller players with big ambitions like Canada’s Petroteq are preparing to revolutionize the day to day operations of potentially every oil operation on the planet. Petroteq could utilize new technologies to tap massive new reserves of energy, such as the Utah oil sands, while radically reducing environmental risk.
With U.S. President Donald Trump planning a trillion dollar infrastructure program, the possibilities for upgrading American oil and gas systems throughout the country are immense.
Integrating blockchain into supply-line management and logistics could dramatically cut costs.
The oil majors are waking up to blockchain possibilities.
BP began experimenting with blockchain technology in 2017. David Eyton, BP’s head of technology, noted: “There are uses for blockchain that could give us a competitive advantage.”
In BP’s pilot program, the company began working with Italian supermajor Eni, and Austria’s Wien Energie on a trading platform using blockchain technology.
And in November, BP joined a blockchain consortium with fellow industry heavyweights Shell and Statoil, in addition to commodity trading houses – Gunvor, Koch Supply & Trading, and Mercuria, with the financial backing of Dutch ABN Amro, ING, and French Societe Generale.
Patrick Arnaud, Managing Director for Trade & Commodity Finance, ING, said: “The commodity finance industry is hampered by nature by inefficiencies and outdated procedures. By applying blockchain technology, we expect that we can eliminate a lot of these, making the overall process faster and more cost effective.”
Royal Dutch/Shell is taking it a step further, investing in a minority stake in the distributed ledger startup Applied Blockchain. The blockchain firm has created platforms across a range of sectors including telecom, manufacturing, and more.