(Reuters) - An oil and gas consortium testing blockchain distributed ledger software said results of its pilot were promising, paving way for the group’s members to start using the technology at production sites.
The OOC Oil & Gas Blockchain Consortium, a 10-company group including ConocoPhillips, Equinor, Exxon Mobil Corp, Repsol and Royal Dutch Shell, tested blockchain technology from supplier Data Gumbo Corp to automate payments for oilfield water-handling.
The pilot test focused on five Equinor wells in North Dakota’s Bakken shale field and was done in a partnership with water disposal company Nuverra Environmental Solutions.
Blockchain, which underpins bitcoin and other digital currencies, is a distributed ledger that can make and verify transactions on a network in real time, offering the potential to speed transactions, cut costs and lower the risk of fraud.
In the Consortium’s pilot, the technology was able to reduce the work flow process from 90-120 days to one to seven days, eliminating nine steps. It was also able to automatically validate 85% of all volume measurements, the group said.
Although the test focused exclusively on water hauling, the OCC Consortium plans to expand its use to other commodities and services, it said.
The pilot finished at the end of January, but the process for moving forward with the technology has been accelerated due to the COVID-19 pandemic and this year’s crash in oil prices, said Rebecca Hofmann, chairman of the OOC Blockchain Consortium.
“This could be adopted this year,” she said, adding savings could be in the millions of dollars. “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.”
Reporting by Liz Hampton; Editing by Tom Brown