Blockchain- Only solution for supply chain management in the oil industry

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The growing need for integration between logistics providers has created a market for blockchain technology in oil and gas supply chains. Blockchain can help address issues such as trust and transparency, efficiency, cost-effectiveness, speed of transaction settlement and coordination across multiple participants.

It’s also an effective method for connecting disparate systems to ensure efficient flow between them with minimal processing or data management overhead. As a result, the oil and gas industry benefits from applying blockchain technology in supply chain management because it can streamline processes and optimize costs. Here are four important ways in which blockchain can play a role in supply chain management:

Reducing Fraud

Oil and gas are among the most common targets for fraud, making it one of the top industries for cybercrime. An effective way to combat this issue is by implementing blockchain technology. Blockchain can help secure data verification, thereby making fraud more difficult to achieve. It also makes double-entry accounting easier, so companies will no longer rely on third parties to act as impartial checkers for fraudulent efforts.

Since blockchain can be programmed to deliver a set of immutable records, all participants in the supply chain can trust that the transactions have been made. As a result, it eliminates the need for extra storage or processing, resulting in lower costs.

Streamlining Information Management

Processing and storing information is a crucial resource drain; for example, a single oil and gas company will have hundreds of thousands of documents. Still, most of these documents are redundant or unneeded in the long run. Collecting data is also time-consuming and costly, which is why a more efficient system for digital information management will optimize this process. Using a blockchain network will allow companies to store only relevant data and therefore save on processing costs.

Integration with Other Technologies

With all the different techniques used in oil and gas, there will always be gaps between these systems. Blockchain technology can help integrate systems into one big, integrated platform so that the supply chain can function more efficiently and effectively.

There will be increased efficiency since companies won’t have to spend time integrating existing pieces of software. Using blockchain for integration also protects against network outages because it is decentralized and does not rely on a single communications provider for its security – which makes it immune to some cyberattacks.

Streamlining Supply Chain Management Processes

Blockchain technology is ideal for streamlining processes and optimizing costs. The oil and gas industry can save time, money and resources through the management of supply chain management processes. It brings significant benefits, like cost reduction (through the reduction in the number of transactions), improved resource utilization (by reducing transactions among entities of different levels) and improved overall business performance (through the automated process without errors or manual intervention). Although this level of automation has yet to be in use, some institutes are already exploring blockchain applications in supply chain management.

Blockchain for Transparency in Oilfield Assets:

Blockchain technology is no longer hype by now. With the number of companies already adopting it, we can only expect more from this technology shortly. By using blockchain, supply chain players can track the history of oilfield assets. It will help improve asset management and prove compliance with regulations and standards throughout their lifecycle.

The most significant benefit that blockchain brings to the oilfield is transparency. It will be possible for all supply chain participants to view at any time, anywhere, real-time data related to the assets that have been registered on a distributed ledger addition; with a smart contract and a cryptocurrency payment system, it will also be possible to carry out automatic and direct compensation between companies via the blockchain technology.

Crypto-Backed Oil and Gas:

Blockchain will also make it possible to reward every participant fairly and ensure they are all fulfilling their responsibilities. In the new digital economy, using cryptocurrencies as a reward for services provided is the next logical step.

It allows all supply chain participants, even those removed from the actual transaction, to be incentivized by crypto-backed tokens paid directly in dollars or euros via a decentralized blockchain system. Blockchain technology makes it possible to pay directly with cryptocurrency or fiat money. It is a big step forward in terms of production transparency and transparency in operation procedures.

So nearly every element in the oil and gas supply chain has something in common – an increasing need for technological innovation is driving it forward. That’s why we are seeing the emergence of several new technologies bringing blockchain closer to being a successful tech component to optimize your oil and gas supply chain.