What contributions can blockchain technology make to the oil industry?

in Project HOPE2 years ago


Greetings friends and supporters of the platform steem, a special greeting to the community of the project hope for supporting the content related to technological advances and where the unpublished and quality content is valued.

In this occasion I want to share with you a series of personal considerations oriented to the blockchain technology applied to the oil industry, as for sure most of my followers know my profession is petroleum engineer, situation that leads me to be interested in providing a brief analysis about the way in which the oil industry can benefit from the blockchain technology, mainly considering that the great information of data about operative variables and reports of operations within the oil industry is very valuable, reason why to protect oneself by means of the blockchain technology does not seem a crazy idea.

Is it necessary to explain what the blockchain is in order to link it effectively to the oil industry?

Although many of those who will read this article know the basic and advanced knowledge of what the blockchain is, it is important to explain basically what the blockchain is, since this is an article that tried to orient it to any reading public, so not everyone masters the concept of blockchain.

The word Blockchain is the English translation of the word chain of blocks, so it is correct to call it in our Spanish language "cadena de bloques". The blockchain is a technology that goes beyond even allowing to establish and develop platforms for the generation of cryptomoney or platforms as we do today many of us, as is the case of the hive platform.

The block chain can be conceptualized based on the most common definitions we find in the network as a database made up of chains of blocks in which the stored data cannot be modified.

It is with this security mechanism in mind that this technology is so important in the oil industry, since the information that is handled in the exploration and production processes, for example, must be protected for the exclusive use of the departments involved, which means that it would be a risk if it were to be shared outside the confines of these departments. Much of the information stored as a result of oil operations is of vital importance to the continuity of operations, so there is a need for the oil industry to have a system or technology that makes much of this information for exclusive use.

Not only does the protection of this information have to be seen from the point of view of operational sabotage, but even much of the information that is stored is essential for consultation at any given time and for the continuity of the operational activities being carried out at the time.

This need for protection makes the oil industry look towards the blockchain technology, however we still have many loose ends and much information to link and discern in order to understand how this link of blockchain technology and the oil industry would be.

What should people's vision be in terms of how the blockchain is perceived today?

Because the blockchain technology is perfect for information storage, most of us relate the term blockchain to digital product storage and cryptomoney generation, however within the information storage can also be stored information such as documents, confidential data, emails, videos, in short any type of information that has characteristics of digital product.

Now many of us know this technology especially oriented in the wide world of cryptomoney as the BTC, STEEM, HIVE, HIVE DOLLARS, STEEM DOLLARS, ETHEREUM among other cryptomoney more.


The concept that we must gradually adopt is that this technology can be extrapolated and linked to other sectors that need the potential of its functionality and support, so it may become very easy to recognize that blockchain technology can easily apply to solve many problems of information storage within operational activities within the oil industry.


What role have oil companies played in the challenge of incorporating blockchain technology in the oil industry?

There are certain companies involved with this innovative idea of incorporating blockchain technology into the oil industry, among which are BP, Shell, Statoil, among others, under a main idea and with which they have started, and it is not more than to incorporate this technology firstly to make payment transactions, it is a very important beginning to involve this technology by means of payment mechanisms for oil purchase and sale transactions, all this trying firstly to cover a need in the speed of the payment, where only 25 minutes can take a crude sale transaction compared to a longer time that almost always requires this type of transactions.

Analysis of the various impacts that the incorporation of blockchain technology would have on the oil industry

One of the main favorable factors in which the use and implementation of blockchain technology would impact is the optimization of time and costs.

The idea is to establish an oil market where producing and consuming countries can make use of a technological system of block chain that is administered by a trusted entity in which transactions can be made at an international level regarding the sale and purchase of hydrocarbons.
Transactions carried out through the blockchain would cancel the sending of documents, purchase of invoices and all the bureaucratic procedures that slow down the process of buying and selling oil, due to the speed with which transactions are executed through the blockchain in generally reducing the times and costs associated with the commercialization of crude oil.

Conclusion and final considerations regarding the contributions of blockchain technology to the oil industry

1] At a global level, there are various oil markets that encompass a series of processes that are intrinsic to the commercialization process, which can be summarized as follows:

Network of countries selling oil - Means of transport to carry oil and natural gas - End consumer in the marketing chain

We cannot ignore the great amount of administrative processes that have to be carried out in this commercialization chain, which many times can lead to errors that can be minimized with the use of the blockchain, since with this technology even an exhaustive follow-up can be carried out in the distribution of the hydrocarbon, also all the transactions that happen between the suppliers and the clients can be saved in an automated way.

2] Not only we can see the advantages of the use of the blockchain in the oil industry in the processes of commercialization of the hydrocarbon in the speed of the transactions of purchase and sale of crude oil, but also it is necessary that the vision in the use of this technology evolves towards a technical and operational perspective in which technical and engineering aspects are involved.

From experience I can tell you that in the operations of drilling and construction of a well it is necessary to store a series of information that is generated during drilling and that is important for the drilling of new wells in the same field.

This information is of a geological, petrophysical nature, characteristics of the well such as the final depth at which the drilling was completed, pressure and temperature gradients, characteristics of the casings used, characteristics of the cement slurry used in the different holes of the well, in short an endless number of data that need to be stored.

Many of these data are traditionally stored in folders, data transmission systems that are usually not at all reliable since the information can be manipulated by anyone who has access.

If all this information that I have just mentioned could be supported by blockchain technology it would be of great help to the state companies of each producing country, and as an oil engineer I could tell you that it also facilitates future operational processes in the drilling and construction of new wells, thus reducing drilling times and therefore the costs associated with those drilling times.


Sources of images

Image 1. Pixabay

Image 2. Pixabay

Image 3. Pixabay

Image 4. Pixabay


Many of these data are traditionally stored in folders, data transmission systems that are usually not at all reliable since the information can be manipulated by anyone who has access.

I don't see why blockchain is a better data storage method than any modern, secured computerized company database system. But I'm not an expert.
Maybe a closed, intranet company blockchain?

Likewise, for example when I worked as an operations engineer in the drilling area at the national company Petróleos de Venezuela SA (PDVSA) we handled a series of operational data that was stored in a data transmission system called DIM'S where anyone could access it, even workers from other departments that perhaps have nothing to do with drilling, comparing the benefits of the blockchain could say that it will serve as a shielded technology where only those involved would have access to operational information such as

  • Properties of the drilling fluid.
  • Mud pump flow rate.
  • ROP.
  • Drilling speed.
  • Lithology information of the formations that are crossed while drilling.
  • Underground completion equipment.
  • Final drilling length.

Among many other properties and data during drilling that is loaded in systems that are not shielded as if it could be a blockchain system.

As you say it could work well as a closed intranet system, anyway I am not an expert in this technology because I do not understand it very well, but what I do understand is the operational drilling activities and I know how vulnerable the traditional systems of information backup are.

The idea would be to see how it works once the blockchain system is implemented and to see how it works not only in the management of stored information but also in the transmission of payment transactions in the marketing of hydrocarbons. The other thing to consider is the proposal that may arise, but perhaps another will be the acceptance of the oil companies, since almost every change has a refusal to accept the change.

Thank you for sharing your concern, I only hope that I have been able to guide you in your doubt, my friend, greetings.

Thank you for your long answer. Anyhow, reliable data is essential in modern times.

Grateful with you rather for the interaction through the comments and the doubts that you very well formulate sir. Greetings

The blockchain has truly helped in making several systems better and more adoptable.

That's what the blockchain as a technology is all about, it can optimize industrial processes to save time and associated costs.

Thank you for commenting on this article and contributing with your comment. Greetings