In light of the prevailing uncertainty in global energy demand, there is a heightened focus on cost reduction across all functions in the oil and gas industry. Leading players are seeking to simplify transaction processing using blockchain to boost operational efficiency and minimize compliance issues, says GlobalData, a leading data and analytics company.
According to GlobalData’s latest report, ‘Blockchain in Oil and Gas, 2021 Update – Thematic Research’, blockchain has come a long way in recent years, but it remains a nascent technology. It was not until 2017 that blockchain properly captured the attention of enterprises. Since then, companies have identified use cases focused on addressing actual problems to better understand the technology itself.
Ravindra Puranik, Oil & Gas Analyst at GlobalData, comments: “Blockchain as a service (BaaS) holds the key to driving mainstream adoption of blockchain technology. It allows companies to experiment with blockchain applications without being concerned about developing expensive in-house resources. Integrating blockchain into core technologies facilitates ease of use, making it a more attractive option for digital transformation efforts.”
Blockchain technology allows companies to track everyday workflows while eliminating the requirement of central recordkeeping. This could overhaul traditional workflow management in the oil and gas industry and drive operational efficiency and optimize costs. In anticipation of these benefits, several leading oil and gas companies, including ADNOC, BP, Eni, Equinor, Gazprom, Repsol, and Shell are developing blockchain platforms for their applications.
Ravindra adds: “Companies today are striving to reduce operational costs amid the demand uncertainty brought about by the COVID-19 pandemic and the likely shift towards low-carbon energy sources. In this scenario, blockchain could prove to be a boon for them. The technology has diverse applications in areas such as procurement and logistics, energy trading, and land and lease compliances among other things.”
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