The ten benefits of the PermianChain (Part two)
In the last article, we offered a non-technical definition of the blockchain and explained how innovators and traditional companies are investigating how it could be used far more widely than the cryptocurrency sector that it was initially developed to support. In the next three articles, we will discuss the benefits of implementing a blockchain to manage the oil and gas sector’s supply chain and financial activities.
Adding oil and gas reserves to a global blockchain would enhance the way that the sector works in ten ways. Over the next three articles, we will discuss the potential benefits and explain how the PermianChain will ensure that the oil and gas sector as a whole takes advantage of them.
Reduced administrative costs
Primarily, it would significantly reduce administrative time and costs because rather than spend time waiting for paperwork (in whatever form) to make its way around the system, participants could simply add their approval to a process phase and let the next link in the chain go about their business. The need for re-keying information would become a thing of the past, you wouldn’t even need to copy and paste information from the blockchain, a company system could simply take a cut of the data in the format it was needed, check it, make any necessary amendments or approvals and on it would go.
The PermianChain’s Natural Resource Token (NRT) establishes an open, secure, transparent and direct oil and gas investment trading ecosystem that is powered by blockchain technology. It will increase the efficiency of oil and gas trading, making ownership more transparent and help resources from the entire sector move more efficiently around the globe.
Reduced reliance on brokers
As well as reducing administrative time, the level of transparency would mean that brokers’ involvement would be significantly reduced, which would again strip out costs. Brokers have played a very necessary role in the sector for the last half a century, acting as a focal point for investors, oil and gas firms, regulators and other third parties, but in a transparent system where all pertinent information is managed efficiently, a broker’s role as gatekeeper is potentially massively reduced.
Reducing the role of brokers would take cost out of the system, meaning that more of an investor’s input would go directly to financing an oil and gas project. This could also change the levels at which an extraction project becomes viable.
A just-in-time system for oil and gas?
An efficient blockchain structure would also mean that there would be more clarity about what is available in the global system and how long it could take to reach a specific destination.
This would mean that organisations all across the process would be able to manage their supply more efficiently, which would again bring down overall costs as well as in some cases reduce reliance on storage facilities. This could again have significant cost implications for the oil and gas sector overall.
It would be impossible to create a just-in-time system for oil and gas along the lines of the motor manufacturing, but with an increased availability of data and the potential to analyse it with increasingly advanced artificial intelligence, it should be possible to significantly enhance global supply chains.
In the next article in this series, we will examine three more benefits of PermianChain’s blockchain-based infrastructure. Read it here.
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 for its regulated digital securities trading and investment platform.