Blockchain in Chemical Process Industries Blockchain and its Big Impact
Branching into various industries, blockchain is now strongly making its presence felt in the oil and gas as well as the chemical process industries. PROCESS brings you the many plus points of this dynamic technology in chemical process industries.
Blockchain is considered to be one of the most revolutionary technologies of modern times. Initially associated with cryptocurrency, blockchain is now exhibiting its perks in many other dynamic industries such as the oil & gas and chemical process industry.
What is blockchain?
Blockchain is a distributed ledger technology that can be programmed to record and track valuable information such as financial transactions, product designs, machine parameters, etc. What makes blockchain unique is its process. The revolutionary technology stores information in groups called blocks that are linked together in a sequential order and in a straight line such that it forms a chain of blocks.
If one has to make changes to the information stored in a particular block then instead of over writing the information in the block, the altered information is stored in a new block with details of the change along with the time and date. This enables the organisation to track data changes over a period of time.
Blockchain is a decentralised system and distributed across a large network of computers. This reduces the chances of anyone messing around with the data. Also, before a block can be added to the chain of blocks, a cryptographic puzzle must be solved which is then shared and verified by all the other computers in the specific network. Once these criteria’s are met, the new block is added. This process makes sure that the data in each of the blocks is trustworthy.
The transparency of this technology also eliminates the need for intermediaries that are costly and time consuming. Hence, blockchain completely revolutionises the manner in which industries function with regards to their data.
Blockchain in the oil & gas industry
Among the many industries that are actively incorporating blockchain in their processes is the oil and gas industry. Karn Sood, Business Development Advisor – Connected Energy, Shellsays, “In my personal opinion, the oil and gas/energy industry is a natural fit for blockchain. Much of the industry is largely stuck in the past and still uses paper documentation for a number of processes. With the amount of companies looking at blockchain for various use cases, if you are an Oil & Gas company that is not at least participating, you will get left behind.”
Plus points of blockchain in the oil and gas industry
- Greater transparency of invoices
One of the leaders in this space, Accenture shares how blockchain can be used in the oil and gas industry. In the current scenario, companies are constantly worried about losing money owing to invoice overpayments and duplicate payments. It is here that blockchain eliminates this discrepancy by establishing smart contracts and offers increased visibility, transparency as well as accuracy of freight invoices. This process significantly reduces costs for the oil & gas industry.
- Land sale records
According to a report byInfosys, the India-based multinational information technology consulting company, proper management of land sale records is also a vital concern for oil and gas companies as millions of dollars of investments as well as profits depends on the simple question – ‘who owns the land?’. The world has been witness to many instances of forgery or contract issues between different business parties. Now, blockchain can solve all these issues as it is a distributed ledger technology and the information stored on it cannot be altered. Thus providing accurate information and acting as the single source of truth.
- Supply chain
Another major area of blockchain implementation is supply chain management. With an aim to improve quality control, companies can use this innovative technology to track and identify the complete supply chain of raw materials right from the place of origin to the end user. Once created, the data cannot be altered. Blockchain also holds potential to track the progress of numerous oil and gas equipment in terms of operating conditions of the equipment, history and maintenance of the equipment.
- Smart trading
In the oil & gas industry, trading plays a crucial role as crude oil, petroleum products, natural gas, and petrochemical products are traded across various parties such as shipping agents, surveyors and others. With so many players involved, there are activities such as payments, validating quality monitoring, etc that require manual work. However, with blockchain all the relevant information is stored and is ready for verification by all the parties involved. This process enables to reduce manual work via automation and also reduces the possibilities of a dispute between the parties.
- Handing over EPC projects
Even in the case of handing over projects to different segments such as EPC firms, engineering firms and other subcontractors, which require handing over all the relevant information about the project including design documentation, as-built documentation, project plans, project resourcing information, etc. can be achieved through blockchain. The process also helps the new players to understand the project with ease and all the information can be handed over to the concerned parties at one go.