BlockchaininOil & Gas Industries

Blockchain, however, is a secure, distributed ledger of transactions that uses cryptographic hash algorithms, which the researchers believe can make oil and gas operations more efficient, transparent, and trustworthy. A Shell, BP, and Statoil research study estimates that adopting blockchain could reduce the oil and gas industry’s transaction-execution time by ۳۰ percent. Blockchain offers an immutable and tamper-proof ledger, where each record created forms a block, and each block is confirmed by the community among which the platform is shared before it can be paired up with the previous entry in the chain. Many blockchain solutions use programmable smart contracts – simple programs that can be used to automatically exchange information under predetermined conditions. The challenges caused by outdated and non-transparent trading platforms in the oil and gas industry can be overcome by leveraging blockchain technology to improve supply-chain operations such as planning, procurement, trading, marketing and logistics services. More specifically, blockchain assists in securing and simplifying oil and gas trading, shipment tracking, inventory control, documentation, and billing and payments. It simplifies the unwieldy and complex supply chain processes by introducing transparency to the involved business processes. The researchers say blockchain technology uses resource-efficient consensus algorithms and irreversible hashing-based data encryption methods to secure the data and transactions relating to this industry. However, the successful adoption of blockchain technology into the oil and gas industry is affected by many factors, including immature and globally differing blockchain standards, which need to be standardized across the world for such an international industry. Additionally, blockchain technology has a high implementation cost, and legal and regulatory frameworks for blockchain need to be built. Additionally, the computing processes behind blockchain require a large amount of energy and computing resources to unlock the mathematical challenges of building each block. Blockchain technology has enormous potential to manage operations in the oil and gas industry, offering its decentralized, trusted and secure advantages to an industry with great need for such improvements. While there are many open challenges still hindering its implementation, we present these as future research directions, and believe there are several systems using blockchain-based smart contracts that can greatly improve critical services in the oil and gas industry.

Keywords:

Blockchain , Oil & Gas , Encryption , Cryptocurrency