In a bid to increase the efficiency of its supply chain, the Abu Dhabi National Oil Company (ADNOC) has teamed up with IBM to develop a blockchain for oil and gas accounting needs to track and manage commodity transactions.
ADNOC said in an official statement that the new platform is designed to enable tracking, validation, and execution of transactions at every stage of the supply chain — from the oil well to down to the end customers.
Blockchain for oil and gas
The new ADNOC platform is the first blockchain-based accounting system in the world built specifically for the oil and gas industry. It was first revealed at the World Energy Capital Assembly in London, last week. Currently the platform is being used to automate transactions between ADNOC’s operating companies, helping to reduce transaction times and improve the operational efficiency of its value chain.
Additionally, it provides greater transparency to commodity transactions. ADNOC emphasized that putting activities related to oil and gas on the blockchain will improve production data reliability which in turn will reduce business risks associated with oil and gas production.
ADNOC blockchain platform provides a secure ecosystem that enables tracking of quantities and financial values of each bilateral transaction that occurs between its operating companies. The oil giant stated that the system will be used to track and manage products such as crude oil, natural gas liquids, condensates, sulfur, and gas. The application will eventually be offered to customers and investors in the coming months.
Commenting on the release of the blockchain solution, Abdul Nasser Al Mughairbi, ADNOC Digital Unit manager said:
“We believe this could be the first application of blockchain in oil and gas production accounting anywhere in the world […] Blockchain is a game-changer. It will 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.”
He further noted that the organization’s adoption of the revolutionary distributed ledger technology has put ADNOC on the map as one of the pioneers of blockchain in the oil and gas sector.
Other petroleum blockchain initiatives
The oil and gas is a sector ripe for transformation using blockchain technology. Blockchain is very likely to be included incorporated into the future business model of supply chain and could be applied to the entire oil and gas value chain. As reported, GuildOne launched blockchain solutions focused on enabling real-time contract payments as well as tracking the measurement data of the entire hydrocarbon value chain.
Last but not least, leading oil merchants and banks teamed up last September to form komgo, a blockchain-based commodity trading platform designed to improve productivity and security within the commerce space.