Blockchain is emerging as a technology that demands attention within the oil and gas sector.
That’s what GlobalData stated in a release sent to Rigzone recently, outlining that it presents “novel approaches” to areas such as service contracts and review pricing and that it “promises potential cost reductions and enhanced process efficiencies”.
“Moreover, the advantages of blockchain in the oil and gas industry manifest through enhanced transparency, compliance, and data security,” GlobalData noted in the release.
Blockchain has a range of compelling applications within the oil and gas industry, according to the release, which noted that it has the potential to accelerate digital transformation using sensors and cloud computing. GlobalData added in the release that the “tokenization of physical assets has also emerged as a promising application”.
The company’s release highlighted that GlobalData recently launched a thematic report on blockchain in the industry that provides an overview of the technology and its potential implications in oil and gas operations. GlobalData’s blockchain report identifies several “key companies”. These comprise ADNOC, BP, Eni, Equinor, Gazprom Neft, Repsol, and Shell.
According to a chart included in the release, GlobalData forecasts that the global blockchain market will be worth $19 billion in 2024, $43 billion in 2026, $114 billion in 2028, and $291 billion in 2030.
Hype Subsiding, Adoption Increasing
GlobalData outlined in its release that the “hype” around blockchain is “subsiding”, but that adoption is “quietly increasing, focusing on practical benefits and efficiency gains rather than technological novelty”.
“The realization that blockchain’s fit may not be universal, coupled with the importance of having a strong digital infrastructure in place, will continue to drive the trend toward meaningful implementation,” the company stated in the release.
Ravindra Puranik, an oil and gas analyst at GlobalData, said in the release, “while the initial use focused on supply chain optimization, blockchain has evolved considerably in recent years to support transaction processing with smart contracts”.
“Moreover, the establishment of consortiums has helped to standardize protocols and exchange best practices. With the maturation of the technology, its adoption is expected to expand, ushering in improved transparency, efficiency, and security in operations,” Puranik added.
The GlobalData analyst also noted in the release that, “as sensor technology reaches its peak within the industry amid rising adoption of the Internet of Things, blockchain facilitates the direct storage of transactions and accounting data on these devices”.
“By linking assets directly to service contracts, blockchain significantly diminishes processing time and fundamentally alters contracting by providing secure collaboration,” Puranik added.
“Although adoption is currently in its early stages, the potential of blockchain in the oil and gas sector is poised for substantial growth as companies recognize its full capabilities,” Puranik continued.
Tokenization
The oil and gas analyst also highlighted in the release that “tokenization involves digitizing a tangible asset for managing big data or safeguarding sensitive information”.
“It has the potential to streamline bureaucratic processes during the production, transportation of processing of a natural resource across various jurisdictions,” the analyst added.
“A token can facilitate transparency in tracking the movement of natural resources throughout the developmental phases. This transparency not only highlights opportunities to minimize waste but also aids in identifying potential irregularities, thereby aiding the sector in fortifying its reputation at a time when it faces challenges from alternative energy sources,” Puranik continued.
Biggest Themes, Instrumental
In a previous release sent to Rigzone earlier this month, GlobalData outlined that blockchain would be one of the biggest themes driving growth in the oil and gas industry in 2024. Artificial intelligence, 3D printing, and the metaverse were also projected in that release to be some of the biggest themes driving growth in the sector this year.
In another release sent to Rigzone in April 2023, GlobalData outlined that blockchain would be one of the biggest themes driving growth in the oil and gas sector that year.
GlobalData stated in a release sent to Rigzone back in August 2021 that blockchain technology could be instrumental in cutting down oil and gas operational costs.
“In light of the prevailing uncertainty in global energy demand, there is a heightened focus on cost reduction across all functions in the oil and gas industry,” GlobalData said in that release.
“Leading players are seeking to simplify transaction processing using blockchain to boost operational efficiency and minimize compliance issues,” it added.
In this release, GlobalData said “it was not until 2017 that blockchain properly captured the attention of enterprises”, adding that, since then, “companies have identified use cases focused on addressing actual problems to better understand the technology itself”.
To contact the author, email andreas.exarheas@rigzone.com