Oil and Gas industry is one of the dynamic industries of the world where companies face a lot of challenges with every passing moment. The most important of these challenges are the fluctuations in demand and supply and geopolitical changes. Now, the management experts have come up with a new idea to face these threatening problems in the industry. The idea is to use blockchain technology in the industry. Here, it is important to explain the concept of blockchain technology. Blockchain is, actually, a public ledger where all the cryptocurrency transactions are recorded. Each transaction is recorded in a separate block and these blocks are linked with one another.
The soaring prices of cryptocurrencies have attracted many large businesses to adopt blockchain technology to avail varied benefits. Shell and BP are the latest players to enter the blockchain technology platform. After earning a name in many large businesses across the world, this is the first entry of Applied Blockchain technology in Oil and Gas business. Shell and BP have bought minor shares of Gartner-listed startup Applied Blockchain. Although the details of this joint venture are not disclosed, yet the experts are hopeful that this joint venture will revolutionize the oil and gas industry.
According to Reuters a consortium consisting of leading energy companies including BP and Shell is working on the development of blockchain based digital platform. The latest reports on Monday say that this digital platform will start functioning by the end of 2018. Shell Chief Technology Officer also admits that there is huge potential in use of blockchain technology in this business. He says that the use of blockchain technology will help in streamlining the supply chain process. It will change the ways we are working with our suppliers and customers. We want to develop new business models through use of blockchain technology.
Here, it is pertinent to mention that Shell and BP are not the only companies stepping in this latest technology. Last year, Mercuria also started working with banks ING and Societe Generale for oil trading across the world. Here, the question arises that how this use of blockchain technology will affect the oil and gas industry. The answer to this question is that use of blockchain technology will bring a great revolution in the industry.
Increased security, transparency, accuracy, cost effectiveness, and fast transactions are the hallmarks of blockchain technology. There is a lot of room for improvement in all these parts of the oil and gas business. The completion of cross border payments in seconds without the involvement of third party will benefit this business a lot. The Specialists at multinational professional network say that the use of blockchain technology in oil and gas will reduce the risks, increase transparency, help in audit trial, and speed up the transactions.
In the end, we can say that Shell and BP would benefit a lot from the use of this technology because it would streamline all the processes and clear all the misunderstandings between the company, the clients, and the customers.