Blockchain, a technology that underpins bitcoin and other digital currencies, is a distributed ledger that can make and verify transactions on a network in real time, offering the potential to cut costs and lower the risk of fraud.
In the pilot, Data Gumbo’s blockchain technology will be used to automate payments, which are typically handled manually and through third-party reporting that increases costs. The technology could generate approximately US$3.7 billion annually in cost savings for the oil and gas water business, Data Gumbo Chief Executive, Andrew Bruce, said.
“There is going to be a huge amount of cost taken out of the whole supply chain,” according to Bruce.
Data Gumbo’s platform, GumboNet, will synchronise data related to waste water disposal.
Equinor, a member of the consortium, expects to save 25% in process costs related to salt water disposal from the technology, according to Equinor’s Rebecca Hofmann, who is also chairman of the consortium.
The Oil & Gas Blockchain Consortium launched in February to develop ways the technology can be used in the oil and gas industry. The group hopes this pilot will pave the way for broader usage for blockchain in the industry.
Houston-based Data Gumbo has financial backing from Saudi Aramco Energy Ventures, the venture capital arm of Saudi Aramco, and Equinor Technology Ventures, a unit of Equinor. The company is already working with a large oil company to use blockchain to track drilling equipment and mud in the Gulf of Mexico.
Blockchain technology has already been deployed in energy trading. In 2017, Swiss trader Trafigura Ltd teamed up with IBM and Natixis to develop a platform for US crude oil deals.
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