Repsol is the latest Spanish company to test blockchain as a way to cut down on waste and improve operational efficiency. The company reported that a recent test of a blockchain pilot which was designed to improve the quality of safety certification of its products was successful, and could lead to a cost savings of 400,000 Euros a year.
Repsol Technology Lab Research Center teamed up with Finboot; a part of the Repsol Foundation Entrepreneurs Fund, to jointly develop a blockchain platform which improves the certification process for petrochemical products. The savings will be generated by reducing frequency errors, according to a report published by Cointelegraph in Spanish.
Repsol Makes Blockchain a Visible Solution
Tomas M. Malango, who is the manager of experimentation at the Tech Lab, commented on why blockchain could make a difference for Repsol, “This type of procedures, in which we handle a large number of samples, are subject to many rework incidents due to mislabelling, loss or incorrect connection of information.” He added that the results from the blockchain pilot, “could be transferred to other departments of the company with similar practices and dysfunctions.”
Spain isn’t known as a hotbed for digital innovation, but numerous Spanish corporations have been quick to adopt blockchain. The first syndicated loan to be settled on a blockchain happened as a result of Spanish bank BBVA, and now Spanish energy provider Iberdrola is using blockchain to track renewable power.
Energy is a Complex Industry
It would be hard to imagine a more complex business than the global energy supply. At 400,000 Euros, the savings that blockchain could create for Repsol are small when compared to the company’s annual revenues, which are measured in the tens of billions of Euros.
As Malango points out, once a blockchain platform has proven itself, it could be expanded into other areas of the petroleum business, which generates trillions of US dollars annually. Something that is present at every level of the oil and gas business is finance, with major banks filling in the gaps when oil companies need to deal with their clients or service providers.
Blockchain creates reliable records, but the reluctance for major industry to adopt decentralized currency could be holding them back from even greater cost savings.
Every time Repsol sells a liter of diesel, a company like Visa, as well as a bank like Santander, will get a small cut of that transaction. All those sales add up, which is why Visa and Santander are making a huge amount of money from shuffling around data.
The Money in Numbers
Moving data around today is pretty easy. The first transatlantic phone call took place in the 1950’s, and cost around 500 US dollars at the time. Back then, we needed banks to make sure information was transmitted accurately because there was no other option.
Today things have changed. Banks are still doing basically the same thing they did 100 years ago, and to make things even more interesting, today’s money has absolutely nothing behind it but the faith that people put into it.
Global banks raked in more than a trillion dollars in profit last year. The megalithic financial operators earned it by storing data and moving it around. Central banks are in a similar position, which may by why the Bank for International Settlements’ top rung has been so vocally opposed to cryptos. Money is made up, but the real work and goods that can be traded for all that made-up-money is very real.
Are Banks Like JP Morgan at a Crossroads?
Jamie Dimon was one of the most outspoken opponents of Bitcoin, before he (apparently) decided that blockchain is great, and JP Morgan started patenting blockchain technology.
To be sure, there isn’t another platform that could usurp the international banking cartel’s position at the moment. The established financial system does function for the most part. Almost anyone over 40 still doesn’t seem to understand that the entire system is built on sand, or more specifically, the confidence of those people who continue to work to support it.
Jamie Dimon and JP Morgan’s about-face on blockchain took less than a year. One wonders how long it would take for the general public to question the efficacy of the existing financial system if there was an (another) massive problem.