Oil and Gas Consortium is 1st to Apply DLT to Industry Balloting
The Oil & Gas Blockchain Consortium (OOC) successfully piloted a blockchain-based system for Authorization for Expenditure (AFE) balloting in partnership with Canadian technology provider GuildOne.
According
to an announcement on Dec. 18, the AFE balloting proof-of-concept (PoC) is the
first initiative of its kind and intends to allow participants to send ballots
and make elections digitally using blockchain technology.
Digitizing
conventional paper-based processes
As
noted in the report, AFEs are used in the oil and gas industry in order to
approve capital and expense projects as well as calculate working interests by
members of a joint operating contract. As AFE balloting has been done manually
for years, blockchain-powered digitization intends to cut time needed for
traditional paper-based process.
Specifically,
the PoC aims to improve the approval process and provide immutable records of
the final working interests, at the same time reducing errors by using smart
contracts to calculate working interests automatically.
Another
proof that blockchain can “transform fundamental oil and gas business
activities”
Rebecca
Hofmann, chairman of the OOC consortium, noted that the PoC was completed by
all ten consortium members in less than four months. She outlined that the new
blockchain-based oil and gas industry project has demonstrated the power of
distributed ledger technology as well as its ability to “transform fundamental
oil and gas business activities.”
The
OOC has been aiming to explore the potential benefits of blockchain technology
in oil and gas industry since the day the consortium was established in
February 2019. According to the recent announcement, the consortium includes 10
members to date, including Chevron, ConocoPhillips, Equinor, ExxonMobil, Hess,
Marathon, Noble Energy, Pioneer Natural Resources, Repsol, and Shell.
In September 2019, the OOC awarded a contract to blockchain startup Data Gumbo to pilot a project to manage and synchronize wastewater data in North Dakota’s oil fields.