Blockchain in oil and gas industry

Abstract

The term “Collaborative Consumption” was first coined in 1978 and it has found its usage in various verticals across industries today. Collaborative Consumption allows for decentralization in sharing of resources, to some this might even sound like a barter system that existed at the inception of the economic systems. This allows for maximum utility of resources along with an increase in efficiency through shared knowledge. Today the most important resource that we consume on a daily basis is information and the internet has been a primary driver in prompting information sharing. With the advent of new technologies like blockchain the information sharing scale, transparency and reliability have been increased to new levels. Crude Oil is the most traded commodity in the world, and has countless numbers of stakeholders with interests at different levels of the Oil Industry. Crude oil also serves as a raw material for a number of products ranging from pharmaceuticals to plastics. Because of the interactions between so many elements, the interactions between them often results in limitless inefficiencies and bottlenecks. Commodity Trading: Legacy systems currently in use by multiple companies have multiple issues including but not limited to limited speed, security, data visibility, manual labor and data management. These issues can easily be solved by establishing its platform on a well known blockchain like Ethereum. By using blockchain, every transaction is recorded automatically and more importantly the data is recorded in a tamper proof manner. This would also lead to an easy resolution of legal matters. The application of blockchain would also result in increased transparency which is the need of the hour in a country like India, where corruption and scams are very common. Is anyone doing this currently; BTL, a Blockchain company recently completed a demonstration for companies like british petroleum, ENI and Wien Energie, the demo showed that by correct implementation of blockchain gas trading costs can be reduced by 30-40%. In this research project we are going to find out about several applications of Blockchain in the oil industry. Oil Industry has been roughly divided into 3 parts: Upstream, Downstream and Midstream. We are going to talk about applications of Oil and Gas in all of these three fields respectively. Before we reach there, we want to give a skeleton view of the blockchain, identify challenges in the Oil and gas industry. After identifying applications, we also intend to shed light on critical steps for effective implementation of blockchain technology.