NEW YORK, January 18, 2018 /PRNewswire/ --
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) (OTC: 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 (http://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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