The latest Blockchain adoption news comes from the Middle East with the Abu Dhabi national oil company (ADNOC) partnering with IBM to pilot blockchain-based transaction management for its commodities right from the oil rigs to the eventual end users.
The just piloted automated blockchain system will encompass oil and gas production management for the ADNOC entire value chain which will include the tracking, validation, and execution of transactions.
Just like all other blockchain pilots, this one is expected to increase efficiencies and boost transparency among stakeholders. Where this pilot exercise differs from others, is its holistic approach since it focuses on the entire oil and gas lifecycle while other industry pilots have focused more on trade and post-trade processes.
Once done, the platform will accommodate both investors and customers as per the ADNOC’s plan. IBM vice president of chemicals and petroleum Zahid Habib, said the following about the project; “With this pilot, ADNOC takes a massive leap forward in asset provenance and asset financials, which, in its simplest terms, enables the ability to track irrefutably, every molecule of oil, and its value, from well to customer.”
The pilot will be used to track the quantity and financial value of oil from source to the refinery and then export. The pilot will also cover condensates, liquids, Sulphur, and natural gas.
The project was first announced at the world energy capital assembly held recently in London, England where it got its blessing and was termed as a “game changer”.
ADNOCs digital unit manager, Abdul Nasser Al Mughairbi, had this to say about the pilot project; “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 went on to say; “The first application of Blockchain in oil and gas production accounting anywhere in the world. It demonstrates how ADNOC is leveraging innovative partnerships to unleash the power of technology and creative thinking to enhance efficiencies and deliver greater performance.”
This project will follow in the footsteps of BP and Shell’s VAKT platform which went live late last month after successful pilot testing. The VAKT platform focus on commodity management from trade entry to final settlement and is supported by a consortium comprising of firms such as Gunvor group, Koch supply, Mercuria Energy Group, ING, ABN Amro, and Equinor.