The Abu Dhabi National Oil Company (ADNOC) has partnered with tech giant IBM to pilot a blockchain system that integrates oil and gas production across the full value chain.
ADNOC is the state-owned oil company of the United Arab Emirates (UAE). It engages in exploration and production, support, oil refining and marketing, oil and gas processing, chemical and petrochemical production, maritime transportation, and refined products distribution activities. It is the world’s 12th largest oil company by production, standing at 3.1 million barrels per day.
ADNOC’s blockchain pilot project with IBM, which was announced at the recent World Energy Capital Assembly in London, has reportedly provided a single platform that automated the accounting process by tracking the quantities and financial values of each bilateral transaction between ADNOC’s operating companies.
“For example, as crude oil makes its way from the production well to the refinery, or the export terminal, all quantities are accounted for on a daily basis along with the associated monetary values,” ADNOC said. “Other products included in the blockchain application are gas, condensates, Natural Gas Liquids (NGLs) and Sulphur. These products are exchanged between ADNOC’ operating companies and exported to customers overseas.”
ADNOC said that the pilot proves that blockchain can reduce the time it takes to execute transactions between ADNOC’s operating companies and significantly increase operational efficiencies across its full value chain. The technology will also improve the reliability of production data by enabling greater transparency in transactions.
Abdul Nasser Al Mughairbi, ADNOC Digital Unit Manager, said that the pilot demonstrates how ADNOC is leveraging innovative partnerships to unleash the power of technology and creative thinking to enhance efficiencies and deliver greater performance.
“Blockchain is a game-changer. It will substantially reduce our operating costs by eliminating time-consuming and labor-intensive processes, strengthen the marketing and trading of our products, and create long-term sustainable value that will ensure that ADNOC delivers on its 2030 smart growth strategy,” Al Mughairbi said.
ASNOC is planning to expand the application to link it to customers and investors, providing seamless integration among stakeholders. The oil company claims that the blockchain system’s enhanced clarity and transparency will reduce inherent business risks and consequently enhance the attractiveness of ADNOC Group as an investment partner.
“With this pilot, ADNOC takes a massive leap forward in asset provenance and asset financials, which, in its simplest terms, enables the ability to track irrefutably, every molecule of oil, and its value, from well to customer,” said Zahid Habib, IBM’s Chemicals and Petroleum Solutions VP. “This unlocks the potential to digitally reinvent ADNOC’s hydrocarbon value chain, adds a unique dimension to their data visualization in their Panorama Digital Command Center, and accelerates ADNOC towards their 2030 Vision.”