UAE: Superior Technology Adnoc Implements Blockchain for Oil and Gas Production
In line with the country’s Industry 4.0 ambitions, the government-run company has partnered with IBM to introduce the blockchain technology across its oil and gas production value chain. Increased operational efficiency, improved reliability of production data and greater transparency in transactions are some of the benefits of this contemporary technology.
Abu Dhabi/UAE – The Abu Dhabi National Oil Company (Adnoc) has recently announced its successful collaboration with IBM, piloting a Blockchain-based automated system to integrate oil and gas production across the full value chain. The groundbreaking system provides a secure platform for the tracking, validating and execution of transactions at every stage, from production well to the end customer.
According to the company, using Blockchain technology will reduce the time it takes to execute transactions between Adnoc’s operating companies and significantly increase operational efficiencies across its full value chain. It will also improve the reliability of production data by enabling greater transparency in transactions.
The industry-leading project was announced by Abdul Nasser Al Mughairbi, Adnoc Digital Unit Manager, at the recent World Energy Capital Assembly, in London. At the event, the company shared its ambitions and early successes in embedding Blockchain and other advanced technologies, including artificial intelligence, across its business to enhance operational efficiency, drive profitability and unlock new value from oil and gas resources to seize the opportunities created by oil and gas 4.0.
Adnoc’s Blockchain pilot has provided a single platform that tracks the quantities and financial values of each bilateral transaction between the firm’s operating companies, automating the accounting process. For example, as crude oil makes its way from the production well to the refinery, or the export terminal, all quantities are accounted for on a daily basis along with the associated monetary values. Other products included in the Blockchain application are gas, condensates, Natural Gas Liquids (NGLs) and sulphur. These products are exchanged between the company’s operating companies and exported to customers overseas.
As the Blockchain application is expanded, it will eventually be linked to customers and investors, providing seamless integration among stakeholders. This enhanced clarity and transparency will reduce inherent business risks and consequently enhance the attractiveness of the firm as an investment partner.
Blockchain is a shared ledger that can record transactions amongst a network efficiently and in a verifiable and permanent way. Information is stored in blocks and once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority. This allows the participants to verify and audit transactions independently and relatively inexpensively.