With the recent announcement of the near abandonment of the Organisation of the Petroleum Exporting Countries (OPEC), the major oil producers are already reeling. What has hardly helped matters is the crashing oil prices. In such a milieu these nations have been looking at cost-cutting avenues and efficiencies in the current setup.
To this end, the Abu Dhabi National Oil Company (ADNOC) has announced, on the 9th of December, that they have successfully tested a pilot system for a blockchain supply chain system.
ADNOC is a state-owned oil company in the United Arab Emirates (UAE). Being a leading oil and gas producer, with an estimated daily production of about 3 million barrels of oil and 10 cubic feet of natural gas, it had been trialing a project to
“provide a single platform that tracks the quantities and financial values of each bilateral transaction.”
Thus automating a large part of the accounting between the various companies involved in the supply chain.
The pilot had been developed in conjunction with IBM and was recently unveiled at the World Energy Capital Assembly, in London, by Abdul Nasser Al Mughairbi, the ADNOC Digital Unit Manager. At the summit, he proudly noted that
“this could be the first application of blockchain in oil and gas production.”
Mr. Al Mughairbi then went into the details of the effort calling the introduction of this technology a game changer. Discussing the strengths of the setup and how it will affect the current system he said,
“It will 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.”
Adding to this an IBM representative, Zahid Habib, went on to claim that the system “enables the ability to track irrefutably, every molecule of oil, and its value, from well to customer.” In addition to that this tracking data will be made available to the public; so that customers and investors will have a seamless integration experience.
A press release in the Arabian Gazzeete further discussed the virtues of this system. ADNOC hopes that this project, when live
“will reduce the time it takes to execute transactions between [its] operating companies and significantly increase operational efficiencies across its full value chain. It will also improve the reliability of production data by enabling greater transparency in transactions.”
This comes hot on the heels of other such forays by other major players. Just last week saw the launch of a similar blockchain-based processing tool. Designed for the crude oil industry this post-trade management platform certainly caught the attention of firms such as BP and Shell.
That is not all, the Oil rich nation has certainly seen the potential benefits of this technology. In Nov it had opened its shores to devs and companies to setup crypto firms. Then their Abu Dhabi Global Market (ADGM), the international financial free zone in the capital, conducted tests of a blockchain-based system for their Know Your Customer (KYC) project.
The price fluctuations along with the limited capacity of their natural resources has certainly woken up the government to push for a more sustainable solution. This is certainly good news for the crypto industry as a whole.