Helping the Oil and Gas sector reach its potential (Part I)
Perhaps it’s slightly provocative to suggest that the oil and gas sector needs to make changes to live up to its potential. The reality is though that at this stage, an industry that has dominated and facilitated global economic activity for the best part of a century could probably do with taking a long, hard look the way that it works and trying to work out if there’s a better way to track and trade its assets.
In any business, long-term strategies and day-to-day tactics need to be constantly examined in the light of changing ways of working, evolving regulations and new technologies. Look at this from the perspective of a global industry the size of natural resources and this could seem like an insurmountable task: it would surely be far easier to focus on the parts of the process that an individual organisation can control. The thing is though, for the oil and gas sector, while the scale of the challenge is vast, so is the potential benefit.
The bottom line is that the intricate web of organisations and regulators that are directly and indirectly involved in exploration, extraction and distribution of oil and gas is colossal. What has been built up over the last century is an impressive international human achievement that for all its quirks and inefficiencies, basically works.
A blank sheet of paper
But if you were given a blank (and potentially very large) sheet of paper and asked to design an efficient way of moving vast quantities of natural resources from where they are to where they need to be, would you come up with something as convoluted as the current system?
Perhaps it doesn’t really matter. There are an estimated 1.6 trillion barrels of oil reserves around the world. Given the enhancements in exploration and discovery that have been made over the last two decades and current rates of consumption, it is thought that we have enough oil to keep us going for at least the next fifty years. It is certainly a large enough amount that nervous talk of peak oil has receded to the quieter corners of academia.
There is however a new challenge in the form of the rising efficiency of alternative energy sources. Batteries are improving, the effectiveness of photo-voltaic cells is rising. It has become less certain that oil and gas will retain their preeminent place in the world’s economy for the next half a century. Though oil and natural gas remain essential commodities for respectively manufacturing and powering our everyday human necessities.
There is a long way to go between now and 2070 and many, many things could change, but this certainly seems like a good time to look at the natural resources sector and work out if there are ways to bolster efficiencies and reduce wastage with the aim of conserving our world’s natural resource.
In the next article, we will look at how the blockchain could have a significant role to play in helping the natural resources sector work more efficiently.
PermianChain Technologies is a pioneer member of the Blockchain Research Institute. PermianChain is investigating ways to harness the power of blockchain technology, data science and artificial intelligence to digitize, tokenize and monetize proven but undeveloped natural resources, starting with oil and gas. The PermianChain, which already has secured oil and gas reserves to be listed on its platform, intends to unlock liquidity to revolutionise the way that oil and gas reserves are funded, produced, bought and sold on a permissioned-access blockchain. The firm is currently in the process of applying to become a regulated digital securities trading and investment platform.