Big Oil is due for a disruption.
The world�s most important industry has been carrying on without any
significant changes in its day to day routine for far too long.
But now, the new tech on the block has its sights set on the
multi-trillion-dollar oil and gas sector.
It�s official: Blockchain technology has infiltrated Big Oil.
The hype
behind blockchain has reached a full-blown frenzy. And for good reason.
The technology, which creates secure ledgers for digital transactions and
rapidly accelerates the pace at which transactions can be made, has the
potential to disrupt every major industry: real estate, shipping, banking and
healthcare.
Blockchain is truly revolutionary, and Big Oil is finally catching on.
In an industry that has used technology to reduce breakeven costs to all-time
lows, create gigantic drilling rigs run by robots,
and even tap reserves located 10
miles below the sea, the oil and gas sector has been slow to jump on the
blockchain bandwagon�until now.
According to a report
from the World Economic Forum from 2017, a digital transformation has already
swept across the energy industry.
Now, blockchain is taking it one step further.
Majors like BP and Shell are making headlines with plans to utilize
blockchain tech to completely transform how energy is bought and sold.
Smaller players with big ambitions like Canada�s Petroteq are
preparing to revolutionize the day to day operations of potentially every oil
operation on the planet. Petroteq could utilize new technologies to tap
massive new reserves of energy, such as the Utah oil sands, while radically
reducing environmental risk.
With U.S. President Donald Trump planning a trillion
dollar infrastructure program, the possibilities for upgrading
American oil and gas systems throughout the country are immense.
Integrating blockchain into supply-line management and logistics could
dramatically cut costs.
Major Innovation
The oil majors are waking up to blockchain possibilities.
BP began experimenting with blockchain technology in 2017. David Eyton,
BP�s head of technology, noted:
�There are uses for blockchain that could give us a competitive advantage.�
In BP�s pilot program, the company began working with Italian supermajor
Eni, and Austria�s Wien Energie on a trading platform using blockchain
technology.
And in November, BP joined a blockchain
consortium with fellow industry heavyweights Shell and Statoil, in
addition to commodity trading houses � Gunvor, Koch Supply & Trading, and
Mercuria, with the financial backing of Dutch ABN Amro, ING, and French
Societe Generale.
Patrick Arnaud, Managing Director for Trade & Commodity Finance, ING, said:
�The commodity finance industry is hampered by nature by inefficiencies and
outdated procedures. By applying blockchain technology, we expect that we can
eliminate a lot of these, making the overall process faster and more cost
effective.�
Royal Dutch/Shell is taking it a step further, investing
in a minority stake in the distributed ledger startup Applied Blockchain.
The blockchain firm has created platforms across a range of sectors including
telecom, manufacturing, and more.�
Petroteq and the Blockchain
While the supermajors are focused on trading, others are looking to the
tech for far more creative endeavors.
Petroteq (OTC: PQEFF; TSX-V: PQE), a
company that made waves in the sector with its revolutionary patented oil
sands tech, has set out on a mission to completely overhaul the industry�s
inefficient and error prone supply chain management protocols.
Petroteq was recently
cited by Geoffrey Cann, a Director at Deloitte specializing in the oil
and gas industry, as a contender for blockchain technologies in the energy
arena.
Oil and gas is a global endeavor in which huge inventories are held,
ordered, transported, and distributed through multiple channels all over the
globe. When things go wrong, productivity is slowed, production levels fall,
and cargo is lost. This means billions in profit is potentially taken off the
table.
And with the development of new energy sources such as shale gas, tight
oil, oil sands, and coal seam gas reaching a critical mass, it�s more
important now than ever to rethink traditional supply chains.
This is the path on which Petroteq has embarked. And with the help of
blockchain technology, the company is positioning itself as a leader in this
race.
Petrobloq, Petroteq�s very own blockchain consortium,
is looking to reshape the industry. From drilling, to a finished
petroleum-based product and everywhere in between, Petrobloq aims to track,
monitor, and account for every drop of petroleum on a transparent, immutable,
and secure blockchain.
The first member of the Petrobloq consortium is Latin America�s second
largest energy company, PEMEX, which made headlines as the first petroleum
company to allow cryptocurrency as a payment option in participating gas
stations. In joining the consortium, the company looks to soar to new
heights.
Utilizing Petroteq�s technology, Mexico�s national oil company will become
one of the world�s largest non-publicly traded companies to introduce a
blockchain-based supply chain management platform. An endeavor which is set
to bring PEMEX�s processes from production to sale to an entirely new level,
ushering in a new era of efficiency and profitability.
These heavy hitting partnerships will certainly disrupt the entire
industry. Data will be shared seamlessly between joint ventures. The time it
takes to cut a deal will be reduced significantly. And perhaps most
importantly, the middle man essentially disappears, reducing costs for every
sub-section of the industry.
American Energy Dominance
The dramatic improvements planned for U.S. infrastructure will incorporate
innovations from companies like Petroteq.
President Trump announced a $1.5
trillion infrastructure plan at the State of the Union Address in
January. That means billions will be invested into dilapidated oil and gas
infrastructure.
The Trump Administration has made energy dominance a high priority. The Utah
oil sands will play a huge part in advancing the future of American
energy.
And Petroteq has technology to unlock the full potential of the Utah
fields and their 32
billion barrels of oil.
And unlike the dirty,
expensive
tar sands of Canada, Petroteq will be able to exploit the Utah oil sands in
an environmentally-friendly,
cost-effective way through their proprietary technology.
Once the fields of Utah are on-line, U.S. imports of oil from overseas, which
are already in decline, could end altogether. The importance of Utah oil
sands will push demand for it up and up, making it some of the most valuable
oil on the market.
With its mastery of blockchain, Petroteq will be at the head of the pack. But
its innovative drive forward is sure to be matched by other companies in the
oil and gas sector.
In such a globally connected economy, the impact of transitioning to
blockchain tech will be profound and will likely turn any industry on its
head.
From oil majors like BP and Shell, to smaller innovators like Petroteq,
massive potential is set to be unlocked in the oil and gas industry through
the innovative use of new technology.
Oil and gas companies using tech to change the industry:
British Petroleum (NYSE:BP) is a multi-national oil and
gas supermajor, and the sixth largest energy company on the planet. The
company is over 100 years old and is not afraid of reinventing the wheel. And
that�s exactly what they�re doing.
As blockchain forced its way into nearly every industry, BP took note. In
October 2017, BP begun experimenting with a blockchain-based oil trading
platform, with the goal of implementing �practical and ethical� uses of the
technology.
With BP�s forward-thinking mindset and vast amount of resources and
assets, the company is always looking to learn about and adopt new
technology.
Royal Dutch Shell (NYSE:RDS.A) is household name. As one
of the largest energy companies on the planet, Shell knows the industry
through and through. Shell also has its eyes on the blockchain industry. The
company is no stranger to technology, and sees blockchain�s clear benefits,
and looks to become an early adopter within the industry.
With BP, Shell is leading a blockchain movement within the industry that is
set to revolutionize the way oil and gas is bought and sold. Their platform
is set to be launched by the end of 2018, and investors are clearly on the
edge of their seats in anticipation.
Pengrowth Energy Corp. (TSX:PGF, NYSE:PGH): Another
company that looks to have halted its falling stock price and is now
preparing to ride the bullish sentiment in oil markets. Having shed a lot of
excess weight this year in massive asset selloffs, investors can expect a
much leaner and meaner Pengrowth in 2018.
For those investors who like to follow the smart money, billionaire
investor Seymour Schulich bought millions of extra shares in Pengrowth in
early October, boosting his position from 19 percent of the stock to 24
percent. He claims that he is confident that oil and gas is going up.
Pembina Pipeline Corp. (TSE:PPL, NYSE:PBA): The North
American pipeline industry has had a tough year, but the recent approval of
the Keystone XL pipeline route and the growing need for transportation
capacity should act as a boon for the sector.
Pembina Pipeline Corp. has ridden the oil price crash in an impressive
manner, maintaining a good stock price and increasing its dividend. This is a
stock that pays you to wait, and as the sector continues to improve it is
likely investors will see good gains here.
TransCanada (TSX:TRP, NYSE:TRP): is a major oil and
energy company based in Calgary, Canada. The company owns and operates energy
infrastructure throughout North America. TransCanada is one of the
continent�s largest providers of gas storage, and owns and has interests in
approximately 11,800 megawatts of power generations.
With TransCanada�s massive influence throughout North America, it is no
wonder that the company is among one of Canada�s highest valued energy
companies. Investors can feel comfortable with the company due to its huge
and diverse portfolio, and continuing eye for success.
By Meredith Taylor
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