Saudi Arabia Announces Blockchain Integration in Oil Industry
Saudi Arabia — the world’s third largest oil-producing nation — is piloting blockchain technology to verify the origin and quality of petroleum products. If the pilot is successful, it could be the next step towards a massive technological overhaul in the oil industry.
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Addressing Challenges With Blockchain
In an attempt to address issues with traceability and quality control, state-owned oil monopoly Saudi Aramco will run a pilot program with blockchain technology. The goal of this pilot is to see if the blockchain can improve quality control and provide a method of tracing products back to their original production lines.
If successful, blockchain technology would allow Aramco to validate the entire supply chain, enabling greater quality control. It could also monitor all interactions by supply chain participants during the life cycle of the crude products, improving efficiency and accountability.
Recently, Saudi Aramco’s chief technology officer Ahmad Al-Khowaiter divulged his view on digital transformation within the industry as a panelist at the CERAWeek conference in Houston.
On the sidelines of the event, Al-Khowaiter revealed the company’s appeal towards blockchain technology to Sputnik.
“We are interested in using the blockchain technology. We are evaluating, it has a lot of advantages in ensuring the quality of the product and the source of the product,” Al-Khowaiter said.
“There are a lot of challenges in identifying sources of production and also for tracking quality, in which we think there is an opportunity to utilize blockchain. We are interested in it, we are testing it in some applications.”
Additionally — although not directly linked to the company’s blockchain pilot — Al-Khowaiter noted that Aramco is working towards reducing its carbon footprint. The CTO said this project is part of a larger goal of reducing global CO2 emissions by 15 percent.
Blockchain in the Petroleum Industry
While its pilot is ambitious, Saudi Aramco is far from the first oil company to show interest in the blockchain. Just two weeks ago, seven global petroleum corporations — including ExxonMobil and Chevron — have partnered to form a blockchain consortium dubbed, “Oil and Gas Blockchain Consortium.” The consortium’s focus centers on launching a pilot project to identify blockchain applications for the oil and gas industry.
Last year, another consortium consisting of Royal Dutch Shell and British Petroleum, ING, ABN Amro and Societe Generale developed blockchain-powered commodity trading platform Vakt.
Will blockchain help the oil and gas industry become carbon neutral? Share your views in the comments section.
Images via CNBC