NetworkNewsWire
Editorial Coverage: The excitement generated by the potential
use of blockchain technology in many industries has been slow to
reach the energy sector. However, indications are that 2018 could
see several companies in the field adopting the revolutionary
technology, which could substantially transform the energy
industry’s markets and processes. Several companies in the oil and
gas industry are already looking to incorporate blockchain
technology in their business processes, including Petroteq
Energy Inc. (TSX.V: PQE) (OTCQX: PQEFF) (PQEFF
Profile), British Petroleum p.l.c.
(NYSE: BP) and Royal Dutch Shell plc (OTC:
RYDAF). Information technology companies servicing the
energy industry, including IBM (NYSE: IBM) and
Wipro Limited (NYSE: WIT), are developing
blockchain solutions for enterprises.
Applications of Blockchain for the Energy
Grid
Renewable energy generated from sources like the sun or wind is
tracked via systems based on tradable certificates to distinguish
it from power generated by fossil fuels. This is an inefficient
process, which could be significantly improved with blockchain
technology. Blockchain can also be used to track transactions
between energy providers, and between utility companies and
consumers. Another example of the use of blockchain in the energy
industry is a model for peer-to-peer energy trading. Rather than
selling excess energy back to a utility provider, consumers can use
bitcoin’s decentralized blockchain network to sell excess power to
each other.
Benefits for the Oil and Gas Industry
Oil and gas industry experts expect the adoption of blockchain
technology to disrupt the sector. As a shared database, blockchain
eliminates the role of third parties in transaction processes and
the sharing of information. Encryption ensures secure payment
transactions and the sharing of data, including contracts,
inventories and industry technology.
Blockchain also enables fast and secure commodity exchanges, and
oil and gas trading anywhere in the world, without the assistance
of intermediaries like banks and brokers. The technology ensures
enhanced transparency and can fast-track regulatory filings and
reporting. Most importantly, blockchain is seen as a way to vastly
improve the cyber security of critical data.
Petroteq’s Foray into Blockchain Technology
As an innovative petroleum technology company that has always
been a leader in developing new and advanced oil extraction and
refining technologies Canadian based Petroteq Energy
Inc. (TSX.V: PQE) (OTCQX: PQEFF) has decided to address the
lackluster global supply chain channels in the oil and gas
industry. The industry is dynamic and complex, with companies
operating in the sector facing daily fluctuations in supply and
demand, constantly changing geopolitics and increasing regulatory
oversight. These complexities, coupled with the difficulties of oil
and gas exploration and production, make it necessary to have an
efficient supply chain management system.
Subsequently, on November 6, 2017, Petroteq Energy announced an
agreement with First Bitcoin Capital Corp. (OTC: BITCF) to
co-develop a blockchain technology-based supply chain management
platform, called Petrobloq (www.petrobloq.com), for the global oil and gas
industry.
The nature of blockchain makes it ideal for any kind of records
management activity, and its reach is not purely limited to
documents but any digitized assets and transactions. The oil and
gas industry is heavily-regulated, with protocols deriving from
multiple sources and covering everything from the environment
impact, refining, transporting to taxation issues on multinational
oil transactions. Data contained in a blockchain could be shared
with regulators in real-time to maximize visibility and prevent
non-compliance and other potential issues.
Joint-venture partnerships, which may involve several companies
collaborating on the same project, are common within the oil and
gas marketplace. Collaborative interactions could also be
significantly more efficient on blockchain. The transparency of
blockchain data can allow investors, company managers, different
departments to view an entire project’s history, potentially
removing the contract conflicts that could lead to millions of
dollars in losses.
The oil and gas industry has been identified as one of the most
vulnerable in global business, and major companies have suffered
multiple hacker attacks in the past few years. As blockchain is a
synchronized and distributed system, it makes it almost impregnable
to harm from hackers.
Petrobloq: Providing the Solution
The upstream, midstream and downstream sectors within the oil
and gas industry each have their own complexities and challenges.
Petrobloq will be the first blockchain-based platform to serve the
supply chain needs of the oil and gas industry. Blockchain will
enable oil and gas producers to meet their supply chain needs,
while enjoying cost and time savings. Petrobloq’s solution will
provide users with the ability to mitigate market fluctuations and
the constantly evolving geopolitical atmosphere.
Petrobloq’s presence and operations on the market did not go
unnoticed, and Petroteq is already gaining recognition for its
initiative as it continues its efforts toward successful
implementation of blockchain technology in the oil and gas
industry, as noted in a recent EnergyNow article (http://nnw.fm/K0Mzn).
Petroteq has an expansive vision for the future on how to
transform the industry through technology and collaboration with
other entities. The company recently became a member of
Hyperledger, the open source collaboration hosted by Linux to
advance cross-industry blockchain technologies, and the American
Petroleum Institute (API), the largest U.S. trade association for
the oil and natural gas industry.
Hyperledger Executive Director Brian Behlendorf noted the value
of adding contributing members like Petrobloq to its
organization.
“We are pleased to welcome PetroBLOQ to the Hyperledger family,”
he stated in the press release (http://nnw.fm/4gUms). “We are constantly seeking
diverse industry and thought leaders to join our efforts to advance
enterprise grade, open source distributed ledger frameworks to
support an increasing variety of critical applications.”
Petrobloq has also joined the Enterprise Ethereum Alliance, the
world’s largest open-source blockchain initiative, again
demonstrating its commitment to networking with open-source,
blockchain enabling enterprises.
The core advisory team to Petrobloq consists of Dr. R. Gerald
Bailey, P.E., a director of Petroteq Energy, Joseph Adams,
financial advisor to Petroteq Energy, Greg Rubin, CEO and director
of First Bitcoin and Vyacheslav M. Abramov, chairman of First
Bitcoin’s Advisory Board. Adams has built many successful emerging
technology companies, including Inter-Mix Media Inc., The Software
Toolworks Inc. and ZAGG, all of which created significant value for
investors.
Petroteq Energy’s New Patents
In addition to its focus on implementing blockchain technology,
Petroteq Energy’s main focus is the extraction of heavy oils from
oil sands, oil shale deposits and shallow oil deposits. The company
is working toward accomplishment of two primary projects: oil and
gas exploration and production from mineral leases it owns with
Accord GR Energy Inc. in Texas, and expansion of production
capacity at its heavy oil facility at Asphalt Ridge in Utah.
Petroteq’s Texas interest involves the recovery of oil from more
than 80 shallow oil wells over an area of 7,000 acres. Its Asphalt
Ridge mineral lease in Utah covers over 3,000 acres and features a
large oil sands resource base with an estimated 87 million barrels
of oil equivalent.
On January 10, 2018, Petroteq Energy announced that it had
received a Notice of Allowance from the U.S. Patent Office for its
“Oil from Oil Sands Extraction Process” patent (http://nnw.fm/m3sIj). The company also received a
Notice of Allowance from the Canadian Intellectual Property Office
for its “Oil Extraction Process” patent. Petroteq has applied for
patent protection in all countries with significant heavy oil
assets, including Russia.
The two patents cover Petroteq’s proprietary process for
extracting bitumen from oil sands in a highly energy efficient and
environmentally friendly way. The company’s technology uses no
water in the extraction process, requires no high temperatures or
pressures, and produces no greenhouse gases. The process extracts
up to 99 percent of all bitumen, heavy oil and lighter
hydrocarbons, and recycles up to 99 percent of the benign
extraction solvents.
While the patents are new, the technology has already been used
by Petroteq in its first facility in Maeser, Utah, producing 10,000
barrels of oil in 2015. The company is also building a facility to
increase the capacity of its lease site at Asphalt Ridge, Utah by
400 percent.
Notably, the new Petroteq oil processing plant is reportedly the
first refinery in North America where all industrial processes will
be logged and managed on the Petrobloq blockchain platform.
Other Companies Developing Blockchain
Applications
British Petroleum p.l.c. (NYSE:
BP) is a heavyweight in the oil and gas industry that is
involved in the exploration, production and refining of oil in more
than 70 countries around the globe. BP recognizes the potential of
blockchain to disrupt entire industries by changing how trading is
done and how transactions are processed. For BP, blockchain would
facilitate digital payments directly from a supplier’s wallet to
the retail outlet without the need to transact through a bank. On
November 6, 2017, BP announced that it was part of a consortium of
energy companies, including Royal Dutch Shell, that will develop a
blockchain-based digital platform for energy commodities trading,
expected to launch by the end of 2018.
Headquartered in The Hague, Holland, Royal Dutch Shell
plc (OTC: RYDAF) is another established leader in the oil
and gas industry, exploring for oil and natural gas worldwide. The
company also extracts bitumen from mined oil sands to convert to
synthetic crude oil and converts natural gas to liquid fuels and
other products. It is intimately involved in the exploration,
development, production, liquefaction and marketing of a wide range
of hydrocarbon products. Shell holds interests in 22 refineries
around the world, 100 distribution terminals and 770 supply
points.
IBM (NYSE: IBM) has been engineering and
developing a blockchain platform for some time. The company’s IBM
Blockchain Platform is an integrated platform designed to
accelerate the creation of a global blockchain network across
industries and use cases. IBM has already worked with over 400
clients around the world in various industries for the design and
implementation of its blockchain platform. The company’s offering
helps companies to save time, cut costs, reduce risk and uncover
new revenue streams.
Wipro Limited (NYSE: WIT) is a leading
information technology, consulting and business process services
company with global reach. The company recently announced a joint
venture with Hyperledger to design and develop open source
blockchain solutions for enterprise-grade blockchain deployments.
Hosted by Linux, Hyperledger is a collaborative effort created to
advance cross-industry blockchain technologies. Collaborators
include leaders in banking, finance, technology, Internet of
Things, manufacturing and supply chains.
The widescale implementation of blockchain technology in the oil
and gas sector will not only make exploration and production more
efficient via implementation of an improved supply chain management
system, it will also lead to reduced operating costs and overall
increased security against cyberthreats. These companies are
positioning themselves at the forefront of successful blockchain
implementation, paving the way toward revolutionizing the energy
market and its processes.
For more information on Petroteq Energy, visit: Petroteq Energy
Inc. (TSX.V: PQE) (OTCQX: PQEFF)
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