Blockchain technology has taken the world by storm and already disrupted a variety of industries. The oil and gas sector is no exception. Originally blockchain was utilized as a form of cryptocurrency, but today the technology is used for far more. Even oil and gas organizations are beginning to realize that there are many advantages to implementing blockchain.
Increased Speed and Security
The current system in place for trading physical refined products is slow, includes manual steps, and requires users to input the same data into several different systems. Giving trade participants price and volume difference information takes a long time. Thanks to its virtually incorruptible ledger format, blockchain has the ability to offer the exact information to everyone involved at once.
Blockchain also helps reduce security risks. Normally, documents are emailed back and forth between parties. This system has potential for cybersecurity attacks or leaked information. By entering the data into a permanent, time-stamped ledger, blockchain prevents these dangers.
Easier to Build Trust
Blockchain is especially useful in instances when parties lack former co-operation or trust, such as in a new joint venture. The system is also helpful for when transactions are extremely complex. Examples of complicated transactions include large oil and gas sales, land transactions, and capital projects. Blockchain increases counter-party trust, which increases productivity and cuts costs.
Blockchain eliminates the wasted time and repetitive steps of former systems. Through this, the technology cuts back on the need for clearinghouses and confirmation processing. Traditional administrative tasks in the area of risk management are no longer necessary, which will help groups save time and money.
Modernized Invoice Processing
Blockchain makes life easier for both producers and customers. Sensors can gather information from several different sources to determine an accurate and transparent bill. They can provide an invoice as soon as chemicals are utilized or produced. Blockchain also reduces fraud. The system is completely transparent to those involved. Every entry is permanently recorded and given a time stamp.
Blockchain has powerful potential to change the oil and gas industry as we know it. Although it was originally used for bitcoin, it has proved useful in many other industries. This unique technology helps reduce security risks, improve efficiency, and builds trust between different parties.