As oil prices tentatively recover from the 2014 crash and investments in alternative renewable energy sources gain momentum, oil and gas companies need to innovate to stay competitive and keep the fuel flowing. Offshore Technology asks industry experts for their insight into how technological advancements will shape the future of oil and gas.
One technology set to transform the oil and gas sector is blockchain. In fact, the blockchain revolution is starting here and now. The real task for the oil and gas sector is how quickly it can move to take advantage of the many opportunities that blockchain will bring.
For oil and gas businesses, data has gone from an asset to a burden. Companies are drowning in data and urgently need a way to control and authenticate information. Blockchain has enormous potential to reduce the risk of fraud, error, and invalid transactions in energy trading, make financial transactions more efficient, facilitate regulatory reporting requirements, and enable interoperability.
Blockchain will have huge benefits both upstream and downstream. From scheduling equipment maintenance to managing exploration acreage records, blockchain offers a single, unalterable record of transactions and documentation between numerous parties. Distributed ledgers also create more efficient and transparent downstream activities, such as exchanging products, secondary distribution delivery documentation, demurrage, and claims management. Mid-stream, it will revolutionise joint ventures, risk management, contracting, and regulatory compliance.
The possibilities of blockchain in oil and gas have few limits – and we’re yet to see more than a glimpse of its full capabilities.
– Simon Tucker, Head of Energy and Commodities, Infosys Consulting
The energy sector is seen as the next frontier for blockchain development outside the financial sector, where the distributed ledger technology has had its biggest impact to date. Blockchain is critical to unlocking the efficiency potential of distributed energy generation and disintermediating the public and private utility companies. So too does blockchain open up efficient fundraising through initial coin offerings (ICO’s).
More than 1,500 ICOs have taken place in the energy space over the last two or three years. Admittedly, a disproportionate number of these token offerings have been electricity or renewables-focused, but the number of token offerings in the traditionally technologically phobic oil and gas sector is now rising.
We have already seen strong interest in our own ICO for an onshore hydrocarbon concession and another standout example of an ICO in the sector is WePower, a Lithuanian-based green energy trading platform, which raised €32m ($40m) in February 2018 – the largest ICO in the energy sector to date.
Distributed ledger technology could also see the advent of peer-to-peer energy trading, as demonstrated by Power Ledger, which allows consumers to buy and sell clean solar energy, disrupting the established norms of energy provision.”