Oil and Gas Blockchain Group Claims Milestone
The Offshore Operators Committee (OOC) Oil and Gas Blockchain Consortium has claimed the successful completion of a produced water haulage transaction pilot using blockchain technology.
OOC proved that a blockchain platform can be used to automate produced water haulage field readings and invoice payments to vendors, blockchain network provider and OOC partner DataGumbo noted in a written statement last week. DataGumbo added the pilot – executed on five Equinor wells in the Bakken field in North Dakota with water logistics and transportation provider Nuverra Environmental Solutions and a midstream disposal company – marks the first industrywide use of a blockchain-native network for produced water haulage.
“The results of this pilot prove that non-manned volume validations can trigger automated payments to vendors, and showcase the opportunities that exist for blockchain to reduce costs, increase efficiency, provide transparency and eliminate disputes in the oil and gas industry,” remarked Rebecca Hofmann, consortium chairman. “This is just the tip of the iceberg for the potential of blockchain in our industry.”
Companies joining Equinor on the OOC include Chevron Corp., ConocoPhillips, ExxonMobil, Hess Corp., Marathon Oil Corp., Noble Energy, Pioneer Natural Resources, Repsol and Shell. The consortium studies and defines blockchain use cases across the industry value chain to solve common challenges, noted DataGumbo. The blockchain tech firm stated that initial results from the pilot include:
- A drop in the current process workflow from 90 to 120 days down to just one to seven days, with a decrease in the number of steps from 16 to seven and no manual intervention
- Automatic validation of 85 percent of all volume measurement against data from multiple parties, with the potential for nearly 100-percent auto validation with future enhancements
- A reduction in financial risk by giving assurances that payments coincide with field activity, with validations automatically triggering the execution of related invoice transactions
- A potential 25- to 35-percent resource reallocation against the operator and trucking company’s current business process.
“It’s all about companies knowing their operating expense and reducing it,” stated Andrew Bruce, DataGumbo’s CEO and founder. “More importantly the results show collaboration among field operations and technology experts to create a deployable and scalable solution.”
DataGumbo noted that blockchain offers the OOC group real-time data transparency, accuracy and automation of contract payments. It also stated the consortium will continue building the blockchain platform, expanding it to other commodities and services.
“Blockchain offers a path to navigate previously convoluted and resource-intensive issues around trust, accuracy and the ability to verify data in the field,” commented Eivind Lie Kristensen, Bakken operations production leader with Equinor.
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