IBM Teams Up With Abu Dhabi National Oil Company (ADNOC) To Test Blockchain for Oil and Gas Value Chain System
Abu Dhabi National Oil Company (ADNOC) has recently joined hands with tech giant IBM to test blockchain-based transaction management for its oil and gas commodities. ADNOC, a leading petrochemicals and energy giant, says that the blockchain system will help them effectively and transparently track the flow of their commodity products across its entire value chain, right from the oil wells to the end customers.
The new blockchain-based system will also help to improve efficiency and provide better stakeholder transparency. Needless to say that the security offered by blockchain transactions is also another major reason behind this move.
However, the major difference here is that while other industry players have so far tested blockchain-based commodity supply chains for trade and post-trade processes, ADNOC plans to test this across the entire oil and gas lifecycle. If successful, it also plans to incorporate investors and customers on its platform in the later stage.
Zahid Habib, IBM’s vice president of chemicals and petroleum solutions says: “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.”
ADNOC’s blockchain pilot application will test the financial value and quantity of oil throughout its journey from oil refinery to exports. Furthermore, it will use the same application to cover natural gas liquids, condensates, gas, and sulphur. The announcement of this project took place at the World Energy Capital Assembly held in London, UK.
ADNOC’s digital unit manager Abdul Nasser Al Mughairbi believes that the blockchain technology is a “game-changer” while adding that it could “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.”
While speaking on its pilot blockchain application, Al Mughairbi said: “The first application of Blockchain in oil and gas production accounting anywhere in the world. It demonstrates how ADNOC is leveraging innovative partnerships to unleash the power of technology and creative thinking to enhance efficiencies and deliver greater performance.”
In November 2018 end, oil and gas giants like British Petroleum and Shell along with many other launched the blockchain-based VAKT platform for commodity post-trading processes. The official press release reads: “VAKT is an independent company created and backed by some of the world’s premiere energy majors, commodity traders and banks. This private launch marks the world’s first fully operational, enterprise-grade blockchain platform to enter the market.”