Abu Dhabi National Oil Company (ADNOC) has partnered with IBM to pilot blockchain-based transaction management for its commodities right from the oil wells through to its end customers.
The automated, blockchain-based, system will encompass oil and gas production management for ADNOC’s entire value chain including tracking, validating, and executing, transactions.
As with many blockchain pilots, this one is also expected to increase efficiencies and provide greater stakeholder transparency. A key differential, however, is this pilot’s application to the entire oil and gas lifecycle where other industry pilots have focused on key parts of commodity supply chains, like trade and post-trade processes. ADNOC plans to incorporate customers and investors in the platform at a later date.
Zahid Habib, IBM’s vice president of chemicals and petroleum solutions says:
“With this pilot, ADNOC takes a massive leap forward in asset provenance and asset financials, which, in its simplest terms, enables the ability to track irrefutably, every molecule of oil, and its value, from well to customer.”
The ADNOC pilot will track the quantity and financial value of oil through its journey from well to refinery and then to export. The blockchain application will also cover gas, condensates, natural gas liquids, and sulphur.
First Application of Blockchain-Based Oil and Gas Accounting
The project was announced at the recent World Energy Capital Assembly held in London, UK. Calling blockchain technology a “game-changer,” ADNOC’s digital unit manager Abdul Nasser Al Mughairbi says blockchain could:
“Substantially reduce our operating costs by eliminating time-consuming and labor-intensive processes, strengthen the marketing and trading of our products, and create long-term sustainable value.”
Al Mughairbi believes the blockchain pilot is:
“The first application of Blockchain in oil and gas production accounting anywhere in the world. It demonstrates how ADNOC is leveraging innovative partnerships to unleash the power of technology and creative thinking to enhance efficiencies and deliver greater performance.”
BP and Shell’s blockchain-based oil trading platform, Vakt, went live in late November 2018. The consortium also includes Gunvor Group, Equinor, Koch Supply and Trading, and Mercuria Energy Group as well as banking partners Societe Generale, ING, and ABN Amro.
The Vakt platform focuses on commodity management from trade entry to final settlement. It is being launched privately with key members of the consortium, before being opened to a wider market in January 2019. Vakt plans to also deliver financing management by linking with another development in the space, the “Komgo” blockchain platform, later.
Featured image from Shutterstock.
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Source : CryptoCoinNews