The OOC Oil & Gas Blockchain Consortium has collaborated with Canadian software firm GuildOne to successfully test the industry’s first blockchain application for Authorization for Expenditure (AFE) balloting.
AFE focuses on cost and expense approval, particularly in the upstream oil and gas process whereby large expenditure is required with regards to exploration, development, and production.
Integrating blockchain to conventional AFE balloting would streamline and reduce the manually intensive and largely paper-driven process of approving capital and expense projects and provide immutable documentation of the final interests, the consortium notes. The AFE balloting proof of concept (POC) tested the ability to send ballots and make elections digitally utilising the technology, with smart contract enabled workflows calculating working interests automatically.
This year, the AFE balloting scope will be expanded to capture complicated scenarios, whereas initial design and testing will be executed on the joint interest billing exchange process that deals with the billing and payment of expenditures between joint venture partners.
In September, the consortium announced that it would start testing the blockchain technology to lowering administrative costs in their field operations, along with reducing payment disputes and risk of fraud. It was reported that the contract was given to Houston-based software company Data Gumbo to pilot blockchain for water handling services in the Bakken shale field in North Dakota.
This time last year, post trade management platform VAKT announced three new strategic investors, in the shape of oil and gas giants Chevron, Total, and Reliance Industries, which are among the five of the world’s top ten largest oil and gas companies by market capitalisation. VAKT’s blockchain-based platform is said to be the world’s first fully operational enterprise-grade blockchain solution that assures major efficiency gains and cost savings for post-trade processing, including trade finance.
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