Monday, February 26, 2018 03.31PM
/ By Meredith Taylor
Big Oil is due for a disruption.
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 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
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.
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nature by inefficiencies and outdated procedures.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.'
Petroteq and the Blockchain
While the supermajors are focused on trading, others are looking to the tech
for far more creative endeavors.
PQE), a company that made waves in the sector with its revolutionary
patented oil sands tech, has set out on a mission to completely overhaul the
industry's inefficient and error prone supply chain management protocols. Petroteq was recently cited by Geoffrey Cann, a Director at Deloitte
specializing in the oil and gas industry, as a contender for blockchain
technologies in the energy arena.
Oil and gas is a global endeavor in which huge inventories are held, ordered,
transported, and distributed through multiple channels all over the globe. When
things go wrong, productivity is slowed, production levels fall, and cargo is
lost. This means billions in profit is potentially taken off the table.
And with the development of new energy sources such as shale gas, tight oil,
oil sands, and coal seam gas reaching a critical mass, it's more important now
than ever to rethink traditional supply chains.
This is the path on which Petroteq has embarked. And with the help of
blockchain technology, the company is positioning itself as a leader in this
Petrobloq, Petroteq's very
consortium, is looking to reshape the industry. From drilling, to a
finished petroleum-based product and everywhere in between, Petrobloq aims to
track, monitor, and account for every drop of petroleum on a transparent,
immutable, and secure blockchain.
The first member of the Petrobloq consortium is Latin America's second largest
energy company, PEMEX, which made headlines as the first petroleum company to
allow cryptocurrency as a payment option in participating gas stations. In
joining the consortium, the company looks to soar to new heights.
Utilizing Petroteq's technology, Mexico's national oil company will become one
of the world's largest non-publicly traded companies to introduce a
blockchain-based supply chain management platform. An endeavor which is set to
bring PEMEX's processes from production to sale to an entirely new level,
ushering in a new era of efficiency and profitability.
These heavy hitting partnerships will certainly disrupt the entire industry.
Data will be shared seamlessly between joint ventures. The time it takes to cut
a deal will be reduced significantly. And perhaps most importantly, the middle
man essentially disappears, reducing costs for every sub-section of the
American Energy Dominance
The dramatic improvements planned for U.S. infrastructure will incorporate
innovations from companies like Petroteq.
President Trump announced a $1.5 trillion infrastructure plan at the State of the Union
Address in January. That means billions will be invested into dilapidated oil
and gas infrastructure. The Trump Administration has made energy dominance a high priority. The Utah oil sands will play a huge part in advancing the
future of American energy. Once the fields of Utah are on-line, U.S. imports of oil from overseas, which are already in decline, could end altogether. The
importance of Utah oil sands will push demand for it up and up, making it some
of the most valuable oil on the market.
With its mastery of blockchain, Petroteq will be at the head of the pack. But
its innovative drive forward is sure to be matched by other companies in the
oil and gas sector.
In such a globally connected economy, the impact of transitioning to blockchain
tech will be profound and will likely turn any industry on its head.
From oil majors like BP and Shell, to smaller innovators like Petroteq, massive
potential is set to be unlocked in the oil and gas industry through the
innovative use of new technology.
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