A consortium of major oil and natural gas companies has agreed to begin testing the blockchain technology in the Bakken Shale in North Dakota, Kallanish Energy reports.
The platform, provided by Data Gumbo, a Houston-based company, will handle water-handling service contracts in a pilot project.
The plan is supported by the Offshore Operators Committee’s Oil & Gas Blockchain Consortium, whose members are Chevron, ExxonMobil, ConocoPhillips, Equinor, Royal Dutch Shell, Repsol, Hess, Marathon Oil, Noble Energy and Pioneer Natural Resources. The consortium was launched last February.
The technology is designed to deal with a growing list of records called blocks linked together using cryptography, a technology at the heart of digital currencies.
Data Gumbo’s platform, known as GumboNet, is a distributed and synchronized ledger that can make and verify transactions on a network in real time, offering the potential to cut costs, reduce payment disputes and lower the risk of fraud.
The system will be used to automate payments typically handled manually and through third-party reporting, that increases costs.
The technology could generate about $3.7 billion annually in savings for the O&G water business, Data Gumbo CEO Andrew Bruce told Reuters.
It reported Norwegian state-owned Equinor said it expects to save 25% in saltwater disposal costs from the technology. Data Gumbo has gotten financial backing from Saudi Aramco Energy Ventures and Equinor Technology Ventures.
In 2017, Swiss trader Trafigura teamed up with IBM and Natixis to develop a blockchain platform for U.S. crude oil deals.