The Oil and Gas Blockchain Consortium wrapped up testing on blockchain software for waterflow payments in oil fields. The system compressed timelines from 90 to 120 days down to under a week a
The Oil and Gas Blockchain Consortium wrapped up testing on blockchain software for waterflow payments in oil fields. The system compressed timelines from 90 to 120 days down to under a week and removed nine steps from the payment workflow.
Data Gumbo, a Texas blockchain developer, built the software. The consortium, Nuverra Environmental Solutions, and a water logistics company conducted the pilot at the Bakken shale field in North Dakota. Five Equinor wells supplied the test data.
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Oil and gas drilling generates vast amounts of water that gets extracted or reinjected. Multiple vendors coordinate its disposal: operators, transporters, disposal firms. Invoices flow back and forth. Settlements take months. The blockchain system auto-validated 85 percent of volume measurements and deployed smart contracts that released payments as work completed. The workflow improvements freed 25 to 30 percent of the operator's and trucking firm's labor capacity.
Rebecca Hofmann, who chairs the consortium, said, "The results of this pilot prove that non-manned volume validations can trigger automated payments to vendors, and showcase the opportunities that exist for blockchain to reduce costs, increase efficiency, provide transparency and eliminate disputes in the oil and gas industry."
The coronavirus pandemic crashed oil prices. This accelerates the industry's interest in the technology, according to Hofmann. The consortium expects deployment by year's end and projects the system could save millions across the sector. "Equinor and others in the consortium are seeing the value and investigating how this can be implemented to bring much-needed cost savings back into their companies," Hofmann added.
The consortium includes ten major players: Chevron, ConocoPhillips, Equinor, ExxonMobil, Hess, Marathon Oil, Noble Energy, Pioneer Natural Resources, Shell and Repsol. The pilot showed that the platform improved coordination among service providers and removed the need for invoice reconciliation. Next steps include extending blockchain applications to other commodities and services.
MiningPool content is intended for information and educational purposes only and does not constitute financial, investment, or legal advice.
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