When you the words, ‘Blockchain’, the first thing that probably comes to mind is cryptocurrency and bitcoin. As the financial aspect of the new-age, digital technology has become its mouthpiece in many ways. However, the same technology has been slowly and surely applying itself to other industries as well – automotive, healthcare, and even art. Next on the horizon is the energy sector; in other words oil and gas.
The energy sector and digital technology may seem like chalk and cheese at first glance; but as you look closer, you will find that blockchain technology can, in fact, streamline many of the redundancies that the oil and gas industry grapple with, streamlining processes and boosting profits in return.
The energy sector has been wary of even going near digital technology for fear of its instability and volatility. And who can blame them when you consider the up and down trajectory of cryptocurrencies. Blockchain, with its unique distributed ledger technology (DLT), provides a more systematic, time-saving, and cost-effective method to some of the industry’s prime challenges.
DLT allows for a one-stop source, single destination, where all the important records, documents, and certificates can be stored, and more importantly, can be sourced from. Rather than waste time and precious resources in collecting data from different sources, DLT has the potential to become a single, convenient, cloud-based location.
Take the upstream segment of oil and gas, for instance. Exploring new resources is one of the important facets of the sector. The experts opine that it is the most complex, expensive, and dangerous side of the business. With DLT, energy companies can:
The scale of energy operations lends itself to duplication at times: you could have different contractors working on the same project at the same time. It can be quite the challenge of just keeping track of who is doing what. DLT can step in here and remove redundancies by providing real-time reports that can be processed instantly. The technology also lends itself to more effective bookkeeping because financial records once entered in the DLT cannot be altered or tampered with.
Maintenance of the rigs is viewed as the most important job in the sector. No matter how vigilant and alert the operators remain, human error could always sneak in and create an issue. Blockchain technology allows for increased automation, enabling better management of safety protocols through a simple tap of the mobile phone. In time, the most critical aspects of maintenance will be automated by machine intelligence, that can be managed from anywhere in the world through cloud technology
Even before companies can be drilling for oil and gas, the patch of land that can yield resources needs to be first identified and then acquired. This is usually a long drawn out process. Once an energy corporation buys a piece of land, the entity can then upload the rights on the DLT system, which can then later be traded as a commodity or sold for financial gain.
These applications are but a teaser of what digital technology can offer the energy sector.
Refining firm Bangchak Corporation Public Co. Limited (BCP) is already testing the waters with a Blockchain-based energy trading platform that is linked to a commercial microgrid. The grid and the platform will not only support a BCP fuel station but also supply energy for a mall next to the fuel pump. The initiative has received the backing of the local Thai government that has been vocal in its encouragement in supporting DLT.
DLT’s time has come. The energy sector is taking small, steady steps towards adapting the new technology that will only benefit it in the long term. The future looks brighter for oil and gas with Blockchain.
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