CryptoCurrencyWire Editorial Coverage: The oil and gas industry has always been a breeding ground for innovation and the adoption of new technologies, like 3-D seismic mapping and hydraulic fracturing. While a majority of such bleeding-edge tech has been implemented in field operations, back-office procedures such as supply chain management have lagged behind. Digital technologies are increasingly being used to increase profit margins via back-office enhancement, providing disruptive advantages to operators at every scale. From augmented reality and predictive financial systems to distributed open-ledgering blockchain technology, the oil and gas industry is evolving to create a major opportunity for aggressive participants such as blockchain early adopter Petroteq Energy, Inc. (TSX.V: PQE) (OTCQX: PQEFF) (FRANKFURT:MW4A) (PQEFF Profile). This is a trend that’s also successfully pursued by tech juggernauts such as Amazon, Inc. (NASDAQ: AMZN), IBM (NYSE: IBM), Microsoft Corp. (NASDAQ: MSFT) and Oracle Corp. (NYSE: ORCL).
The oil and gas industry is saddled with expensive upstream exploration and development, as well as persistent downstream efficiency challenges. This inescapable reality has ignited a firestorm of activity around blockchain-enabled systems that can create real-time situational awareness and help offset associated costs and complexities. These blockchain-enabled systems can function as active transparency systems for the supply chain and are destined to further evolve into largely self-governing cognitive networks which can reduce the cost of activities such as payment transactions by up to 30 percent. But the power of cryptographically-secured and decentralized (nodal) peer-to-peer network technology like blockchain, which essentially self-monitors (while providing inherent reliability and redundancy), doesn’t stop at improving transaction handling. This technology will eventually touch every component of the increasingly complex hydrocarbon supply chain, resulting in transformative logistical advantages across key supply chain components ranging from production sites and refineries to pipelines, terminals and short-term storage facilities. This transformative capability will also help revolutionize activity at shipping and port infrastructure, as well as at the eventual points of sale.
For a company like Petroteq Energy, Inc. (TSX.V: PQE) (OTCQX: PQEFF) (FRANKFURT:MW4A), known for its patented solvent/surfactant-based high-capacity bitumen extraction process for cleanly exploiting raw oil sands, the move to develop a blockchain-based platform in conjunction with First Bitcoin Capital Corp. (OTC: BITCF) is as natural as it is well-timed. Petrobloq (https://petrobloq.com/) is specifically designed to meet the supply chain management needs of the oil and gas sector and the unique complexities and challenges of upstream, midstream and downstream industries.
Oil and gas companies face intraday fluctuations in supply and demand, as well as a constantly changing geopolitical atmosphere and increasing regulatory oversight. Paired with the underlying difficulty of exploration and production, these complexities reveal the critical nature and need for efficient supply chain management.
As Petroteq and First Bitcoin understand, the supply chain must extend beyond the product that a company produces and into ancillary supply chains required to produce its product. Their Petrobloq solution is designed as an intelligent supply chain that learns market conditions and helps the user adapt to market variables – a feature that stands to benefit a wide variety of sectors.
“Blockchain technology has the potential to change not only the oil and gas sector but also other areas of the global business world, leading to improved and optimized efficiency of the end-to-end business transaction processes,” First Bitcoin Capital CEO Greg Rubin explained in the press release announcing Petroteq’s $500,000 contract (http://nnw.fm/fBui0). Notably, Rubin is a first-mover in the blockchain arena, which adds weight to the creation of this new blockchain-based platform.
Rubin is an international energy products investor with 10 years of experience working in the Russian oil market in a variety of roles, including engineering, site planning, drilling, geophysics, and refinery operations. His international experience includes planning oil and gas infrastructure projects, oil product commerce and trading, energy, technology, refinery development and the Carbon Credit Market. Through his analysis of the commodities and financial markets worldwide, Rubin has applied his expertise in management, investor relations, market analysis and business philosophy to usher CoinQX Bitcoin and ALTcoin Exchange into future opportunities.
Under his guidance, First Bitcoin Capital has chosen the Hyperledger blockchain, a product developed by the Linux Foundation-led open-source cross-industry collaborative Hyperledger Project, as the core technology for the new Petrobloq platform. First Bitcoin Capital will also build for Petroteq a smart contract system prototype on a blockchain to improve the efficiency of oil and gas supply chain management interactions. Taking advantage of distributed ledgers, the two companies will explore ways to optimize and monitor the supply chain logistics on the blockchain to automate oil and gas industry transactions.
“We have begun a journey with First Bitcoin Capital to exploit the potential of this new technology. We are very pleased with the cooperation with the team and will begin to develop a first blockchain proof-of-concept. We look forward to seeing these blockchain applications applied to our business,” stated Petroteq CEO Alex Blyumkin.
While blockchain technology shows incredible potential for companies like Petroteq and other oil and gas players, the success of such application can be found outside the industry entirely.
Amazon (NASDAQ: AMZN) is certainly no stranger to disruptive technological innovation, having kicked open the e-commerce door in the 90s for retail, in a way that blockchain tech now seems ready to do today for a wide variety of industries. Amazon’s cloud computing unit, Amazon Web Services (AWS), continues to be the company’s most profitable and crushed Q3 expectations, with $4.58 billion in revenues on 42 percent growth. A major move to embrace blockchain last year via a collaboration with Digital Currency Group has placed AWS at the forefront of the quest to create secure and frictionless blockchain-enabled services for companies in finance, insurance and technology.
IBM (NYSE:IBM) has long been at this forefront, seeking to engineer an immutable, transparent and auditable transaction platform based on blockchain. The company’s report on blockchain for the chemicals and petroleum industries deserves a closer look from investors seeking to understand how all of this will play out. The advent of IBM Blockchain, based on the Linux Foundation’s open source and cross-industry promoting Hyperledger framework, has already begun to enable fully transparent and scalable systems for a variety of industries. The potential for this sort of technology in the heavily regulated oil and gas industry, which is plagued in the international market by innumerable and varying governmental oversight requirements, really needs to be taken to heart.
Microsoft (NASDAQ: MSFT) has also seen the potential of the cryptographically secure, shared, distributed ledgering technology that is blockchain. Leveraging the company’s Azure data and AI platform, Microsoft is able to offer unique off-chain data-management and analysis capabilities. A survey this year by Microsoft and Accenture (NYSE: ACN) highlighted blockchain as one of the key areas, in the next three to five years, on which some 70 percent of industry respondents intend to spend significantly more.
Oracle (NYSE: ORCL) is also embracing blockchain technology, with Oracle Blockchain Cloud Services (also using Hyperledger) becoming a way for the company’s customers to easily link existing inventory and supply chain software to a secure, distributed transaction system, irrespective of where that existing software runs. The size and volume of contracts and transactions in the oil and gas industry has always created a panoply of reconciliation and tracking complications among contractors, subcontractors, and suppliers. The emergence of smart contracts enabled by blockchain technology now seems like the inevitable future.
Industry regulation by governments around the world, as well as IoT (internet of things) proliferation, will continue to be driving factors for blockchain-enabled platform development in the oil and gas industry. Demand for oil is increasing steadily according to OPEC’s World Oil Outlook 2017, which recently revised its forecast for 2040 upward by 1.7 million BOPD. There is a tremendous opportunity here for companies like Petroteq, which has taken the opportunity to develop a blockchain platform for the increasingly complex logistical environment of the oil and gas industry.
For more information on Petroteq Energy, visit Petroteq Energy, Inc. (TSX.V: PQE) (OTCQX: PQEFF) (FRANKFURT:MW4A)
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