State-owned Abu Dhabi National Oil Company is piloting a blockchain-based automated system with IBM to integrate oil and gas production across its entire value chain.
The collaboration with the US multinational will provide a secure platform for tracking, validating and execution of transactions at all stages, right from the production well to the end customer, Adnoc said in a statement on Sunday.
Blockchain is best known in relation to the cryptocurrency Bitcoin, which it underpins by providing a transparent, secure and de-centralised system for transactions. The technology has seen an increasing adoption by oil and gas companies globally. Adnoc said its collaboration is expected to lower costs and increase efficiency.
"Blockchain is a game-changer," said Adnoc digital unit manager Abdul Nasser Al Mughairbi. "It will substantially reduce our operating costs by eliminating time-consuming and labour-intensive processes, strengthen the marketing and trading of our products, and create long-term sustainable value."
The programme being piloted at Adnoc will track quantities and financial values of every bilateral transaction between Adnoc's operating companies, automating the entire accounting process.
Gas, condensates, natural gas liquids and sulphur will also be included in the blockchain programme.
"Adnoc takes a massive leap forward in asset provenance and asset financials, which, in its simplest terms, enables the ability to track irrefutably, every molecule of oil, and its value, from well to customer," said Zahid Habib, IBM vice president for chemicals and petroleum solutions.
"This unlocks the potential to digitally reinvent Adnoc's hydrocarbon value chain, adds a unique dimension to their data visualisation in their Panorama Digital Command Centre."
The state-owned company opened the Thamama and Panorama digital centres last year, with the former specialising in subsurface reservoir study using Big Data and artificial intelligence and the latter displaying real-time feedback on Adnoc's assets across all its value chain from fields to refineries.
The Abu Dhabi firm aims to reduce drilling time by 30 per cent next year and generate efficiency savings of up to $1 billion from next year, by deploying advanced technological resources as part of its Oil and Gas 4.0 strategy.
Adnoc's strategy is not unusal for an oil and gas company operating in the Middle East. Occidental Petroleum - a long-term Adnoc partner that derives 45 per cent of its business from the region - is saving around $325,000 per rig by using advanced analytics to predict drill locations.