The oil and gas industries have recently transformed itself into a data-intensive industry – artificial intelligence, machine learning and internet of things. With such growth and expansion, distributed ledger technology, commonly known as blockchain, can carry the industry's transformation forward. This technology can help the industry to overcome various challenges such as price volatility, supply chain, accounting, data management and security. It can also help in streamlining various engineering and technical decisions.

The oil and gas industries are characterized by heavy investment and cooperation among multiple parties, especially on the upstream side. Even midstream and downstream, however, there are often ownership changes, transactions, and information exchanges taking place across multiple companies. This is due to the inherent trading nature and bulk movement of various commodities comprising of gas, crude oil, refined products, and petrochemicals.

Natixis, IBM and Trafigura introduce first-ever Blockchain solution for U.S. crude oil market

Natixis, IBM (NYSE: IBM) and Trafigura have pioneered the first blockchain solution in commodity trade finance for US crude oil transactions. The distributed ledger platform, built on the Linux Foundation open source Hyperledger Fabric, allows major steps in a crude oil transaction to be digitized on the blockchain, ensuring improved transparency, enhanced security, and optimized efficiency.

About Natixis

Natixis is the international corporate, investment, insurance and financial services arm of Groupe BPCE, the 2nd-largest banking group in France with 31.2 million clients spread over two retail banking networks, Banque Populaire and Caisse d’Epargne.

With more than 16,000 employees, Natixis has a number of areas of expertise that are organized into three main business lines: Corporate & Investment Banking, Investment Solutions & Insurance, and Specialized Financial Services.

About IBM

IBM is the leader in secure open-source blockchain solutions built for the enterprise. As an early member of the Linux Foundation’s Hyperledger Project, IBM is dedicated to supporting the development of openly-governed blockchains. IBM has worked with more than 400 clients across financial services, supply chains, IoT, risk management, digital rights management and healthcare to implement blockchain applications delivered via the IBM Cloud.

About Trafigura

Founded in 1993, Trafigura is one of the largest physical commodities trading groups in the world. Trafigura sources, stores, transports and delivers a range of raw materials (including oil and refined products and metals and minerals) to clients around the world. The trading business is supported by industrial and financial assets, including 49.6 percent owned global oil products storage and distribution company Puma Energy; global terminals, warehousing and logistics operator Impala Terminals

Blockchain’s future in oil and gas: Transformative or transient? 

Important advances in technology rarely come with a full embrace at the start. Ground-breaking ideas can yield as many doubters as disciples. It takes time, experience, growth, and eventual acceptance to turn an idea into reality. Will that be the case with blockchain? Careful analysis monitoring of evolving trends will tell if blockchain’s future in oil and gas is transformative or transient. 

In summary, permissioned private blockchains present a good opportunity for the oil and gas industry to experiment with one or two high-impact use cases to assess the value and business case for its use. In addition to process optimization and transparency, blockchain brings business value by reducing costs and risk and increasing workflow efficiency.

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