The consortium consists of top companies in the oil and gas industry such as ExxonMobil, Chevron, Equinor, and others. According to a statement, the Canadian blockchain company will be responsible for creating blockchain-based Proof-of-Concept (PoC) for Authorization For Expenditure (AFE) balloting in the oil and gas sector worldwide.
Confirming the new development, chair of the OOC Oil and Gas Blockchain Consortium Rebecca Hofmann said:
“This PoC is a huge leap in the right direction to begin the transformation of how we handle the joint operating agreement process for the future. The result of this project will be used to formulate key blockchain frameworks and guidelines for the oil and gas industry.”
The official also emphasized that blockchain technology has massive potential in the oil and gas community since it promotes collaboration in a way that benefits all parties.
Oil and Gas Sector Welcomes Blockchain
Blockchain technology is transforming many sectors, and oil and gas industry has decided to transform its authorization for expenditure (AFE) balloting using the distributed ledger technology (DLT). By employing the technology, the OOC consortium aims to make operations smoother and cost-efficient, based on speed and transparency delivered by blockchain.
The AFE is the last phase in oil well planning. It’s the means through which the consortium gains approval and solicits participation in projects that require huge capital through joint operating agreements (JOAs). Reports reveal that currently, the AFE balloting process is manual, time-consuming, and cumbersome, making it vulnerable to recurrent costly disputes.
Blockchain Company to Streamline Issues
In a bid to eliminate the existing issues associated with the current AFE systems, the team engaged a blockchain-based company to reorganize the entire process using blockchain technology and smart contracts. The Proof-of-Concept (PoC) will prove how smart contracts are applicable to the AFE balloting process and working interest calculations. The technology will lead to data storage on an immutable distributed ledger that only authorized parties can access.
Featured image: hackernoon.com
