In order to lower the administrative cost, oil and gas companies have started testing blockchain technology. This will also reduce payment disputed and fraud cases.
Chevron Corp, ConocoPhillips, Exxon Mobil Corp, Equinor and Royal Dutch Shell who are the members of OOC Oil & Gas Blockchain Consortium have signed a contract with Data Gumbo which is responsible for piloting the technology of water handling services in the Bakken shale field in North Dakota.
Blockchain is a technology and a distributed ledger which underpins bitcoin and can make and verify transactions on a real time network. This further has cost cutting and fraud reduction potential.
Data Gumbo’s blockchain technology is required to automate payments and they are handled either manually or by third-party reporting which further adds up to the costs. The technology results in cost of $3.7 billion annually for oil and gas water business.
GumboNet, is responsible for synchronizing the data related to waste water disposal.
As per Equinor’s Rebecca Hofmann, Equinor which is a Norwegian state-owned oil company and also a member of the consortium, 25% cost saving in process is evident which is related to costs of salt water disposal from the technology.
Launched in February, the Oil & Gas Blockchain Consortium is known for developing ways which can be used in oil and gas industry. This pilot can further help for broader application of blockchain in the industry.
Saudi Aramco Energy Ventures, the venture capital arm of state-oil company Aramco, and Equinor Technology Ventures, a unit of Equinor has financially supported Houston based data Gumbo. The company is working with a large oil company in the Gulf of Mexico where blockchain is being used to track drilling equipment and mud.
Blockchain technology has been used in the field of energy trading in the past. In 2017, IBM, Natixis and Swiss trader Trafigura Ltd joined hands in order to develop a platform for U.S. crude oil deals.
Last week, it was reported by Reuters that Sinochem subsidiary started dialoging with Shell and Australian bank Macquarie Group in order to build an energy blockchain platform.