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Blockchain in Oil and Gas Industry

11.3.1  Trade

“International Oil and Gas Transactions Analysis 2017” reveals the petroleum and

gas trade at 343.5 billion dollars (E.Y., 2017). The energy sector comprises a variety

of related sub-industries. The vast volume of transactions and deals in these pro­

cesses results in comprehensive arbitration work and surveillance work.

11.3.1.1  Smart/Intelligent Contract

Smart contracting is a form of acquiring. Smart contracts should include program­

ming language rather than legal language. The oil and gas industry’s complex

nature is such that long and complicated contracts always exist. Intelligent contracts

can significantly reduce red tape, automate operations, increase productivity and

reduce costs. The smart contract should be verified before use and comply with

Smart Contract Protection Standards, as poor architecture results in severe losses.

In February 2018, numerous investigators in Singapore and the United Kingdom

reported that there might be vulnerabilities to well over 34,000 intelligent contracts

(Huatai Securities Oil and Gas Industry Chain Depth Report, 2018).

11.3.1.2  Transaction

In the oil and gas sector, the conventional method creates commerce errors and is

vulnerable to corruption. The exchange may even be made simpler by using block­

chain. Many processes are implemented, including opening the account and customs

clearance. Money that is encrypted would significantly minimize the expense of

international transfers, thereby reducing the time it takes intermediaries to authen­

ticate and liquidate funds. Transaction intensity is often high and differs from the

magnitude of inter-bank transactions. The purpose of trade may be covered, overlap­

ping or interspecies arbitrage (Lakhanpal and Samuel, 2018; HIS Markit Oil and Gas

Petcher Industries Blockchain solution, 2018).

11.3.1.3  Management Decisions

Blockchain also has a significant technological capacity to make decisions.

Management decision-making requires multiple informed choices by the entire

system’s facts and evidence. Furthermore, specific petroleum and gas industries’

decisions require voting management levels, and intelligent blockchain contracts

allow automatic and open voting applications. Voters can vote or send their votes

to others, and everyone can check the results publicly. The technology improves

the reliability of data exchange and dissemination, leading to more accurate deci­

sions. Data is recorded at each level that cannot be misused, contributing signifi­

cantly to the design process (Blockchain empowers oil and gas industry, 2018).

Pipeline transportation is an example of an intelligent management system. The

pipeline system is complex and challenging to manage, especially concerning

energy allocation. If relevant demand and supply details are generated and smart

contracts signed, oil and gas deployment using pipelines can be scientifically

reinforced.