How Can Blockchain Technology Disrupt The Oil And Gas Industry?
When a person figures out how they can use blockchain technology to revolutionize the oil and gas industry, how would it look?
People in the oil and gas industry may feel intrigued about this as it can have tremendous potential in that sector. That is because gas and oil are both highly complex and critically vital to human life.
Blockchain was able to move past being a niche technology, as people now look at it as a platform capable of transforming many traditional industries through digital automation that can improve security and increase savings.
Numerous shareholders have pushed gas and oil companies to lessen their expenses and increase their earnings, putting them under much pressure. With blockchain, the gas and oil supply chain will get assistance as it can automate so many procedures and give better transparency.
Three American oil-company groups, including Exxon and Chevron, were able to team up to become the sector’s initial blockchain consortium. This consortium aims to determine how blockchain can be beneficial for the gas and oil markets. Blockchain technology can potentially improve the gas and oil industry’s efficiency as it can help eliminate any operational delays, minimize operating expenses, and increase the industry’s transparency. We will explore some of the blockchain technology’s possible applications for streamlining the gas and oil industry.
Blockchain can provide three significant advantages to the industry of crude oil:
- It can help digitize transactions to get better security.
- It increases transparency.
- Likewise, it allows the industry to become more efficient.
Last 2017, Trafigura, Natixis, and IBM launched a blockchain solution for U.S. crude oil deals using a smart-contract platform.
With blockchain, sellers, buyers, and banks can share information to see the same ledger simultaneously. Blockchain helps improve the process from when an order is confirmed until it is delivered and the credit letter is canceled.
Blockchain Technology Improves Trust
In oil and gas, blockchain has a possible application for storing the needed certificates for the operation of safety-critical industrial equipment. The company’s blockchain network can securely store and record contractor or employee certifications like welding, first aid, H2S training, and more. Through storing this information in the blockchain network, every member can verify the standard operation procedures and certificates anytime, which can help in improving the trust of the stakeholders.
With blockchain technology, do more than improve the trust among employees, contractors, and companies. Blockchain also helps address costly hiring issues and make sure that people are safe as they perform their work.
Gas and Oil with Crypto-Support
It can be possible for blockchain to serve gas and oil mining as this can happen by offering cryptocurrencies to the public. Aside from that, it can be possible for various parties to have the token used and transpose the value they have without using the banks. Because of that, it can allow for a vital opportunity in tokenizing this sector and have more options offered for the investors. Right now, investors know where it could be. Additional options in investment can be beneficial to both sectors. It can be a great way people can go when they have an oil-supported cryptocurrency, as tokenization can be helpful for natural gas and oil.
Since oil and natural gas are among the world’s most valuable non-renewable sources of energy, having cryptocurrency tied to oil can be an excellent alternative for any traditional financial transaction. Once cryptocurrency gets tied to oil, it will allow parties to directly transfer the value with one another as they remove the need for any third party such as the bank.
Reduction in Expenses by Eliminating the Middlemen
It can be challenging to monitor the international supply chains of oil and gas as it involves so many participants that get together for a short time. Each would always require access to the existing data. Since the information is generally dispersed throughout various systems, you must reconcile manually to get a complete picture. Because of that, they needed so many intermediaries in the past.
The decentralized technology of blockchain maintains the accessibility and safety of records and eliminates the need for many intermediaries. With blockchain, you can have the potential to help gas and oil companies substantially increase the efficiency of their supply chain management. It can help transactions be done easily and quickly among financial institutions, buyers, and suppliers without going through the intermediaries, including their fees.
Blockchain Allows Oilfield Assets to Become Transparent
The growth of the world’s population directly affects the gas and oil industry, eventually leading to added energy consumption. The two highly vital issues that this sector currently deals with include the increased requirement for more assets in the oilfield to meet the increased demand for gas and oil products. The other issue is the opacity of the operational processes of gas and oil. Gas and oil companies have to spend a lot of money and time to maintain oilfield assets. Since this sector has many operational activities, it can be essential to get the proper insights into these assets.
With blockchain, it can help improve the visibility of the oilfield asset that can lessen the time people spend to resolve issues on oilfield assets. Aside from that, as it seamlessly joins with the other technologies, blockchain can help in improving the asset solutions’ identification. Since blockchain cuts down the cost and time, it can improve the industry of oil and gas.
Blockchain Can Be Important to the Oil and Gas Industry
There are so many value propositions that blockchain offers to the gas and oil industry. The most compelling one is that it can develop a blockchain network that is privately accessible which is capable of supporting the transaction life cycle of every stakeholder. There may be challenges practical for implementing a broader approach in the ecosystem. Because of that, it may be challenging to determine the optimal proposition of value, so that you would need expert advice. Suppose there is an extensive team of experts from multiple disciplines. In that case, they can help give field expertise and leadership in areas that would consider the blockchain system as highly beneficial for them.
