Relevance and Effectiveness of Blockchain Technology in Oil and Gas Industry

This report analyses the relevance and effectiveness of blockchain technology in Oil and Gas industry and illustrates the future development of the incorporation of blockchain technology in oil and gas sector. The report discusses the advantages of blockchain technology in reducing operational costs and creating a more authentic transactional framework that fosters security and reliability to the organisation as well as the clients and customers of the company. The report also highlights the reluctance of the oil and gas industry to adopt blockchain technology due to conservatism and conventional ideas. The report concludes that the role of blockchain technology has the potential to develop a future sustainability for the oil and gas sector across the world.

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Oil and Gas sector is considered to be a lucrative industry that can generate more profit
for the company and the country as well. This global dynamism of Oil and Gas Industry with its
escalating demands is now facing a series of threats regarding organisational activities and the
way to reduce its operational costs. In this regard, the purpose of this report is to understand the
problem and make a solution for it. Moreover, with the emergence of Bitcoin or blockchain
technology it becomes easier for the companies to reduce their operational expenditure. Based on
this understanding, the report is going to analyse the relevance and effectiveness of blockchain
technology in Oil and Gas industry and by analysing it the report illustrates the future
development of the incorporation of blockchain technology in oil and gas sector.
The blockchain technology also known as the Distributed ledger technology can be
considered as an effective tool in the business organisation not only for its systematic responses
in the form of a blend between finance and technology but also for its benevolent impact on the
operational outcome to reduce the cost of the organisational processes and create more authentic
transactional framework that fosters security and reliability to the organisation as well as the
clients and customers of the company. For an example, it can be argued that the petroleum and
mining company BHP Billiton is highly influenced by the presence of the bitcoin technology in
the operational framework of the company and willing to proceed with this technology in future
also (Koeppen, Shrier and Bazilian 2017).
However, it can be opined that there no little hope for the blockchain technology in the
oil and gas sector around d the world. The recent studies have been going to express their
concern about the future of the blockchain mechanism. Conservatism and the conventional ideas
prevail in the oil and gas industry that develops disruptions in the process of changes regarding
the operational framework (Krosinsky and Cort 2018). In this context, conventional wisdom,

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strategies and tactics fuelled the organisational framework that is prevalent for so many years.
Distribution ledger technology may be an effective measure to change the organisational
framework in a positive way but these organisations do not want to implement it because of their
fear of change that would be led to further destruction (Chen 2018).
In this discussion, it is important to understand the relationship between blockchain
technology and its positive impacts on the business activities of the companies. Therefore, it is
imperative to analyse the mechanism of the bitcoin system. The system is highly developed on
the basis of networking and supply chain management. As a result of that providing real time
data during delivery and creating a chain of request connecting every aspects of the
organisational framework can be generated accurately and effectively. It can be argued that the
stakeholders of this management mechanism are the engineers, analysts and the laboratories that
are responsible for the production of the company (Giungato et al. 2017). As a matter of fact,
these advantages are strongly related to the oil and gas industries around the world. Therefore, it
is highly relevant with the organisational framework of the oil and gas company.
The blockchain framework becomes a growing trend among the business organisation
nowadays. It can be articulated that the role of bitcoin in the organisational operations has
reduced the operational costs and create the business activities more accurate. The
implementation of the distributed ledger technology by the global petroleum and mining
company BHP Billiton has proved to be an effective strategy for the company (Vovchenko et al.
2017). It can be articulated that the BHP Organisation is intended to incorporate this tool in their
operational framework in order to reduce expenses and earn more profit in compare to its past
business experience. In fact, during the Global Blockchain Summit in Shanghai the BHP
management asserted that the inclusion of the bitcoin technology in their organisational

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framework is proved to be a significant step for the betterment of their future business
orientation.
In the social aspect it can be argued that the big data collection are very secure and
enables the consumer and employee security profoundly. Moreover, the inspection over the
working environment using bitcoin as a carbon currency it fosters a practice of paperless
transaction process that helps to environmental sustainability. Technologically, the mechanism of
the Distributed ledger technology is primarily designed for making the transaction process and
the operations of the organisation more accurate. Besides this, the industry market of the
technology has been increased because it has certain advantageous characteristics in terms of
reducing the operational expenditure (Petersson and Baur 2018). This feature makes the
mechanism more attractive and organisational friendly that most of the business houses are
willing to incorporate it into their organisational structure.
There are a number of advantages that the oil and gas sectors can be leveraged by
introducing the blocklchain mechanism in their organisational performances. It can be argued
with the help of the blockchain technology the oil and gas companies are able to secure ledgers
for digital transactions and in course of this practice will be able to elevate the pace of flexible
business dealings with the clients. Moreover, the oil and gas industries are going to incorporate
technological assistance in order to do tough jobs like drilling oil reserves 10 miles below the sea
or to move the heavy gears with the help of the robots. Therefore, the role of technologies like
the blockchain has the potential to develop a future sustainability for the oil and gas sector acroos
the world. According to the report of the World Economic Forum it can be argued that major oil
and gas companies like the Shell are taking keen interest in establishing blockchain technology
in operations and make it less time consuming and effective (Roman 2017).

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In a conclusion it can be stated that the role of bitcoin or the blockchain technology in
one hand designed to secure the digital transactions of the companies and ensure the safeguard
for any kind of loss in the organisational details. On the other hand, it curtails the operational
costs of the companies in a great deal of manner so that despite of having market fluctuations the
companies can retain their profit and interest as it was.

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Reference
Chen, D., 2018. Utility of the Blockchain for Climate Mitigation. The JBBA, 1(1), p.3577.
Giungato, P., Rana, R., Tarabella, A. and Tricase, C., 2017. Current Trends in Sustainability of
Bitcoins and Related Blockchain Technology. Sustainability, 9(12), p.2214.
Koeppen, M., Shrier, D. and Bazilian, M. (2017). Is Blockchain’s Future in Oil and Gas
Transformative or Transient?. [online] Available at: http://www.deloitte.com/us/about [Accessed
8 Jul. 2018].
Krosinsky, C. and Cort, T. eds., 2018. Sustainable Innovation and Impact. Routledge.
Petersson, E. and Baur, K., 2018. Impacts of Blockchain technology on Supply Chain
Collaboration: A study on the use of blockchain technology in supply chains and how it
influences supply chain collaboration.
Roman, A., 2017. Application of Blockchain Technology in Corporation’s Transactional Cost
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Vovchenko, N.G., Andreeva, A.V., Orobinskiy, A.S. and Filippov, Y.M., 2017. Competitive
Advantages of Financial Transactions on the Basis of the Blockchain Technology in Digital
Economy. European Research Studies, 20(3B), p.193.