In a bid to bring down administrative expenses and also disputes related to payment, a consortium of oil and gas companies have decided to test blockchain. OOC Oil & Gas Blockchain Consortium has signed a contract with Data Gumbo.
As a pilot project, Data Gumbo will be implementing blockchain in the water handling services in the Bakken Shale field in North Dakota. In this project, blockchain technology will be used to automate payments; cutting out the extra expenditure that the company had to bear by hiring a third party to take care of the payments manually. According to the Chief Executive of Data Gumbo, Andrew Bruce, this could help Bakken Shale save $3.7 billion annually.
Blockchain in simple words is an open and distributed ledger that can record all the dealings between two parties efficiently, in a permanent and verifiable manner. This technology is popularly known to be associated with cryptocurrencies. Blockchain supports Bitcoin and other digital currencies to verify transactions on a network in real-time, having the potential to cut expenses and reduce the threat of fraud. It is now being implemented in other sectors too to keep a permanent and secure record that can be utilized on a real-time basis. It also helps in automation of various processes helping industries to cut down on their outlays, therefore, increasing their profits.
The Oil & Gas Blockchain Consortium was launched in February. Members include Chevron Corp, ConocoPhillips, Exxon Mobil Corp, Equinor, and Royal Dutch Shell. This consortium was formed to experiment with the cutting-edge blockchain technology in the field of oil and gas to maximize profits and reduce frauds.
Data Gumbo is a Houston based blockchain-as-a-service (BaaS) company. They are creating an enormous interconnected blockchain network GumboNetTM for industries that include the oil and gas companies. They have financial backing from Saudi Aramco Energy Ventures, the venture capital arm of a state oil company, Aramco and Norway based Equinor Technology Ventures. The company is already working for a large oil company; using blockchain to track their drilling machines and mud in the Gulf of Mexico.