Blockchain seems to be quite the buzzword.  Well what is blockchain?  What does it mean?  By definition a blockchain is a growing list of records, called blocks, which are linked using cryptography.  Each block contains a cryptographic hash of the previous block, a timestamp and transaction data.  If you Google search “blockchain in oil and gas” these two phrases will come up:

Blockchain can help transform the oil and gas industry supply chain networks.

Blockchain enables immutable, transparent and auditable business transactions among participants and suppliers, distributors and partners.

The Wallstreet Journal wrote an article back in 2017 about Blockchain’s Future in Oil and Gas which focuses on transparency and compliance, smart contracts & cyberthreats and security.  The common denominator is digital data.

So if the goal of blockchain is to help transform the oil and gas industry supply chain networks by creating transparent and auditable business transactions, how do we get to a place where we can actually implement scalable blockchain solutions?  The answer is baby steps as we can’t get there overnight.  On average a medium sized oil and gas company is doing over one million paper transactions per year.  So let’s be honest here, since we still have operators cramming paper field tickets into mayonnaise jars it’s not realistic to move straight into blockchain.  Often times our data isn’t even available until months after the work is actually completed.  With that being said, we need to take the first step which is digitizing the field operations in oil and gas.  The change management to digitizing workflows in the field is a massive undertaking in itself but it will enable us to have blockchain ready data in the future.

“In the oil and gas industry, with its global reach, its complexity, and its dizzying array of national regulations and restrictions, simplifying and improving the paperwork and processes of global product movement is a high priority. With a compelling value proposition, many oil and gas companies may look to explore, invest in, and collaborate with partners on developing blockchain initiatives.”

—by Mark Koeppen, principal, Deloitte Consulting LLP; David Shrier, managing director, MIT Connection Science; and Morgan Bazilian, fellow, Center for Global Energy Policy, Columbia University

Let’s invest in the digitization of the oilfield as our first baby step.  Let’s get our data hubs organized and then once we have the real-time data, we can make intelligent decisions based on this accurate data.  Once we have our data in a real-time and blockchain ready environment we can launch blockchain initiatives and utilize smart contracts.  First step’s first though, get off the paper.

Find out more at www.engagemobilize.com

Jenna Velardi
Sr. Director of Enterprise Sales
Engage Mobilize