The Abu Dhabi National Oil Company (ADNOC) has announced a successful partnership with IBM. According to the official press release, both parties have developed a blockchain-based system, which will help to track and manage commodity transactions in the supply chain of ADNOC. Reportedly, the new platform will encompass every stage of the supply chain, from the oil wells to the end customer.
ADNOC to reap huge benefits from blockchain
The state-owned ADNOC holds seventh-largest oil reserves in the world, most of which are located in Abu Dhabi. The company produces over 3 million barrels per day and is the biggest company in the United Arab Emirates.
As with all new blockchain-based systems, the new platform is focused on increasing efficiency and will significantly reduce the transaction times between ADNOC operating companies. The second major bonus of the distributed ledger is transparency and ADNOC intends to take full advantage of it. The oil giant is certain that blockchain will improve production data reliability. This, in turn, will reduce business risks and will enhance the ADNOC image as a potential business partner.
The project was first announced by ADNOC Digital Unit Manager Abdul Nasser Al Mughairbi, at the recent World Energy Capital Assembly, held in London. Al Mughairbi said that “We believe this could be the first application of Blockchain in oil and gas production accounting anywhere in the world. […] Blockchain is a game-changer. 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.“
Oil giants are looking into blockchain
IBM representative Zahid Hadid added that “With this pilot, ADNOC takes a massive leap forward in asset provenance and asset financials, which, in its simplest terms, enables the ability to track irrefutably, every molecule of oil, and its value, from well to customer.“
Last week such oil industry heavyweights as Shell and British Petroleum have launched a blockchain-based oil trading platform. Dubbed Vakt, the new trading platform removes excessive paperwork to provide a streamlined trading process. Reuters has even claimed that it has the potential to “revolutionise the market.”
Initially, the system is only available for select partners but access will be opened for the broader market in January 2019. In addition, Vakt is set to introduce American and European oil products, as it currently only offers North Sea crude oil.
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