Oil giant, Shell has just concluded its first investment in blockchain after acquiring a minority stake in Applied Blockchain a London startup. Shell hopes to explore the potential of the blockchain technology in relation to the Oil and Gas industry. Blockchain technology has created waves around the globe for its security, diverse and wide applicability to attain the name internet 3.0. The technology underpins the Bitcoin the largest cryptocurrency by market capitalization and price.
The value of the acquired stake by Shell has not been disclosed, but was finalized with other top firms such as Calibrate Partners, a Fintech investment firm. The startup is involved in developing distributed ledger and smart contracts technology. It is currently working with Sita, a leading telecommunication company associated with some of the world’s largest airlines, to develop a distributed drone registry while another startup Babb is creating a bank based on the decentralized blockchain technology.
This is not the first time the Oil giant has expressed interest in the blockchain technology. In November 2017, two Oil and Gas giants, BP and Royal Dutch Shell announced that they will be partnering to create an energy trading platform based on the blockchain technology. They will be joined by Koch Supply & Trading, and Mercuria, ING and Societe Generale, Norway’s Statoil, trading houses Gunvor, and banks ABN Amro. Shell chief technology officer (CTO), Johan Krebbers was quoted saying that blockchain applications have portrayed to have a huge potential that can shake up how the energy market operate. He further stated that Blockchain can be used to increase efficiency and effectiveness in operations, relating to suppliers, investors, and serving our customers.
According to Deloitte’s analyst, the blockchain technology has presented more opportunity in the energy industry for facilitating fast and cheap cross-border payments, maintaining records securely through the distributed network, supply chain management and exploring smart contracts as the tech applicability to the industry.
Shell investment in Applied Blockchain falls in line with the company’s commitment adoption of technology. The company is betting on the blockchain to help improve its core business and help in improving existing business models. The blockchain has been viewed by many in the energy as a way of reducing risk exposure, methods of improving transparency through its distributed ledger, provide an audit & investigation trail and increase transaction processing rate leading to reduction of cost of operation.