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Abu Dhabi National Oil Company (ADNOC) has partnered with IBM to lead blockchain-based transaction management for its commodities, from oil wells to its end customers.
The automated system based on the blockchain will include the management of oil and gas production for the entire value chain of ADNOC, including tracking, validation and execution.
As with many blockchain pilots, this too should increase efficiency and provide greater transparency to stakeholders. A key differential, however, is the application of this pilot to the entire life cycle of oil and gas where other industry pilots have focused on key parts of the raw material supply chains, such as commercial and post-negotiation processes. ADNOC plans to incorporate customers and investors into the platform at a later time.
Zahid Habib, IBM vice president of chemical and petroleum solutions, says:
"With this pilot project, ADNOC makes a huge leap forward in the availability of assets and in financial assets, which, in the simplest terms, allows us to trace irrefutably, each molecule of oil and its value, from good to the customer."
The pilot ADNOC will track the amount and the financial value of oil through its journey from the well to the refinery and then to the export. The blockchain application will also cover gas, condensates, natural gas liquids and sulfur.
First application of Blockchain-based oil and gas accounting
The project was announced at the recent World Energy Assembly, held in London, in the United Kingdom. Calling blockchain technology a "game-changer", the ADNOC digital unit manager, Abdul Nasser Al Mughairbi, says that blockchain could:
"They substantially reduce our operating costs by eliminating time-consuming and labor-intensive processes, by strengthening the marketing and trading of our products and creating sustainable long-term value."
At Mughairbi he believes the blockchain is:
"The first application of Blockchain in oil and gas production accounting worldwide.It demonstrates how ADNOC is leveraging innovative partnerships to unlock the power of technology and creative thinking to improve efficiency and deliver better performance. "
The BP and Shell oil trading platform, Vakt, was launched at the end of November 2018. The consortium also includes the Gunvor Group, Equinor, Koch Supply and Trading, Mercuria Energy Group, and Societe Generale, ING and ABN Amro.
The Vakt platform focuses on managing goods from commercial entry to final clearance. It is privately launched with key members of the consortium, before being opened to a broader market in January 2019. Vakt also plans to provide financial management by connecting to another space development, the "Komgo" blockchain platform, later.
Shutterstock foreground image.
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