Given that oil companies are recovering from the decline in demand and price over the past year, most are looking for new technologies to ensure the security of their future. Cutting costs and improving green practices are high on these companies’ priorities for the next decade, and blockchain offers them a way to do it. The latest company to opt for blockchain technology is Norwegian company Equinor. Equinor is 70 percent government owned, which means oil production must go hand in hand with environmental policy. To that end, CEO Anders Opedal wants to make Equinor carbon-friendly. the first “net zero” oil company by 2050.

Johan Sverdrup, Equinor’s new 300-foot platform, has cutting-edge blockchain technology equipped with sensors that track the drilling of new wells, the amount of oil produced and many other core functions. The information is all transmitted to a Houston-based startup, Data Gumbo, which consolidates this important information in its blockchain ledger GumboNet.

We see More and more oil technology startups are emerging in HoustonThis puts it at the forefront of the gas and oil digital revolution. In 2020, many companies invested heavily in new technology and digitization to modernize them and ensure future cost reductions and more efficient practices.

Rather than relying on human input, monitoring and evaluation to manage contracts with suppliers, the blockchain system enables the use of “smart contracts”. The technology shows when suppliers have completed their contractual work obligation and ensures that work is carried out as planned. It can also manage payments with digital currencies.

After a pilot in 2019, Equinor has decided to invest $ 6 million in Data Gumbo and expects to roll out its technology in ten more projects after Johan Sverdrup’s initial success. To date, Equinor estimates the savings in its first year of operation at $ 20 million.

Interest in blockchain technology grew in 2020 as several companies sought to adapt their practices to the digital age. The OOC Oil & Gas Blockchain Consortium, consisting of

10 companies including ConocoPhillips, Equinor, Exxon Mobil Corp, Repsol and Royal Dutch Shell tested Data Gumbo’s ability to automate payments for water treatment in oil fields.

Companies found that using blockchain The workflow process was reduced from 90 to 120 days to one to seven days by cutting nine steps. Other companies are expected to follow in Equinor’s footsteps after the success of the pilot made it clear that this technology can save companies both time and money.

Shell already has promised to become an early adopter of blockchain technology to create trust and security in the industry, among others. Shell believes that using blockchain to track devices, parts and products enables better supply chain management.

Related: A Glimmer of Hope for Oil Markets

Blockchain not only supports supply chain management, payment from suppliers and data security, but can also monitor and evaluate CO2 emissions. Instead of some of the current estimation methods, blockchain technology can accurately assess the carbon footprint of an oil field project.

The accuracy of the blockchain could therefore enable better certification processes in the future, as the regulatory authorities are demanding stricter standards for CO2 emissions. In addition, understanding a project’s current carbon footprint enables companies to be more transparent and work towards better environmental practices.

Given the clear success of Equinor’s first blockchain project, 2021 could be the year several oil companies follow. After a decade of slow progress in this area, companies are finally starting to accelerate the pace of digitization. Blockchain offers the opportunity to reduce costs, improve efficiency and reduce CO2 emissions.

By Felicity Bradstock for Oilprice.com

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