Oil & Gas

Sinochem Energy Technology Co. Ltd., a subsidiary of the state-owned multinational Sinochem Corp., has achieved a significant milestone by shipping gasoline from Quanzhou City, China, to Singapore using blockchain technology. This marks the first instance of blockchain being applied across all key participants in the commodity trading process, according to Sinochem. While the company's initial blockchain shipment of crude oil from the Middle East was conducted in December 2017, it now emphasizes how digital bills of lading and smart contracts could lead to substantial financial savings of 20%-30%.

Despite the longstanding presence of paperless trade, ensuring the security and authentication of documents remains a major challenge. Blockchain, the technology behind cryptocurrencies, provides a decentralized network that is considered tamper-proof. By utilizing distributed ledgers, blockchain technology enables real-time transactions in digital assets, positively impacting physical commodity trading. It allows stakeholders to track the supply chain, verify the origin and quality of commodities, and streamline the entire process.

However, China's energy sector is not alone in embracing blockchain technology. In 2019, more than a dozen oil and gas companies, primarily from the United States, formed Blockchain for Energy, aiming to revolutionize the industry's workflow process. This consortium aims to leverage blockchain technology to maximize efficiencies, reduce costs, improve timelines, and drive industry transformation. Through collaborative efforts and the execution of multi-functional use cases, they aim to identify, test, and deploy solutions that combine blockchain with innovative technologies.

Based in Houston, Blockchain for Energy (B4E) is dedicated to advancing and transforming the management of records, transactions, and data in the energy industry. The consortium also supports the development of new technologies for lower carbon energy through collaboration. While B4E was launched in 2019, it has already achieved significant milestones, including the launch of its own platform and permissioned blockchain network last year.

Apart from B4E, other notable blockchain initiatives in the oil and gas industry include Vakt, launched by BP, Shell, and Equinor in 2018, and PetroBLOQ, developed exclusively for the oil and gas industry. Additionally, various blockchain startups in the energy sector, such as Power Ledger and WePower, are pioneering new models for energy trading and consumption. These initiatives demonstrate the growing adoption of blockchain technology to drive innovation and efficiency in the energy industry.