US oil, gas consortium completes successful blockchain pilot – Ledger Insights

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Today the OOC Oil & Gas Blockchain Consortium announced it completed a blockchain pilot with Data Gumbo for automating water management at the Bakken shale field in North Dakota. The trial was able to reduce process workflow to less than a week from 90-120 days. 

The OOC Consortium consists of ten prominent oil and gas players such as Chevron, ConocoPhillips, Equinor, ExxonMobil, Hess, Marathon Oil, Noble Energy, Pioneer Natural Resources, Shell and Repsol. The Consortium contracted Data Gumbo last year to use its GumboNet blockchain platform for recording data about wastewater disposal. 

The pilot was run at five Equinor wells and involved a water logistics and transportation company and a midstream disposal company. The Consortium was able to reduce the processing time drastically due to automation using blockchain. For water volume measurement, the solution was able to automate validation for 85% of the data. 

This automatically triggered smart contracts for related invoice transactions releasing payments as work was completed. Additionally, the pilot was able to free up 25%-35% of resources for the operator and trucking company. 

“The results of this pilot prove that non-manned volume validations can trigger automated payments to vendors, and showcase the opportunities that exist for blockchain to reduce costs, increase efficiency, provide transparency and eliminate disputes in the oil and gas industry,” said Rebecca Hofmann, Chairman of the OOC Oil & Gas Blockchain Consortium. 

The solution enhanced collaboration between the several service providers and reduce costs for all. GumboNet enabled all parties to view the same data with transparency, eliminating the need for reconciliation. 

Texas-based Data Gumbo previously said its blockchain solution could save $3.7 billion annually for oil and gas water business. The company is backed by Saudi Aramco and Equinor, who participated in its Series A funding round. 

Outside of the OOC project, GumboNet is being used in the Permian Basin by Antelope Water Management. Shipping company Murphy Global Logistics is working with Data Gumbo to use blockchain for supply chain operations. More recently, Air Drilling Associates (ADA) adopted GumboNet for automating the execution of project management contracts and invoice payments. 

Meanwhile, the OOC Consortium is exploring a range of blockchain applications. It contracted Canada’s GuildOne for authorization for expenditure (AFE) balloting. It is also exploring blockchain for other joint venture management operations. 

Another blockchain initiative is VAKT, which is using blockchain for post-trade processes. Three of the OCC participants, Chevron, Equinor and Shell are also VAKT investors. More recently, Saudi Aramco invested $5 million in VAKT.