Canada’s GuildOne to Build Blockchain Solution for the Oil and Gas Sector
GuildOne Inc., a Calgary-based distributed ledger technology (DLT) firm has been contracted by the Offshore Operators Committee (OOC) Oil and Gas Blockchain Consortium which is made up of top companies in the industry, including Chevron and ExxonMobil, to develop a blockchain-based proof-of-concept (PoC) for authorization for expenditure (AFE) balloting in the global oil and gas ecosystem. This, according to a press release on September 18, 2019.
Transforming the Oil and Gas Sector with DLT
In an effort to digitize the authorization for expenditure balloting (AFE) and make it frictionless and cost-efficient, the Offshore Operators Committee (OOC) Oil and Gas Blockchain Consortium is set to adopt distributed ledger technology (DLT).
As stated in its press release, GuildOne has been contracted by the OOC to develop a proof-of-concept blockchain solution for authorization for expenditure (AFE) balloting.
For the uninitiated, the AFE is the final step in oil well planning. It’s simply a tool used to gain approval and solicit participation in capital intensive projects governed by joint operating agreements (JOAs).
Reportedly, conventional AFE balloting is done in a manual, time-consuming and cumbersome process that is prone to frequent costly disputes.
However, the team plans to eliminate the issues associated with existing AFE systems and streamline the entire process with blockchain technology and smart contracts.
The PoC will try to demonstrate how smart contracts can handle the AFE balloting process and working interest calculations and store the information on an immutable distributed ledger only accessible to authorized parties.
A Win-Win Scenario
Commenting on the blockchain PoC, Rebecca Hofmann, chairman of the OOC Oil and Gas Blockchain Consortium reiterated that blockchain technology has huge potential in the oil and gas ecosystem, as it fosters collaboration in a way that’s beneficial to all parties.
“This PoC is a huge leap in the right direction to begin the transformation of how we handle the joint operating agreement process for the future. The result of this project will be used to formulate key blockchain frameworks and guidelines for the oil and gas industry.”
Established in February 2019 by a group of leading oil and gas companies including Chevron, ExxonMobil, Repsol, ConocoPhillips, Equinor, Hess and Pioneer Natural Resources, the primary objective of the OOC Oil and Gas Blockchain Consortium is to explore the potential of the revolutionary blockchain technology in the sector and promote its adoption.
Forward-thinking companies in the energy industry are increasingly exploring the use cases of the DLT.
Earlier in May 2019, BTCManager informed that major oil and gas firms had pumped in $6 million into Data Gumbo Corp.