S&P Global Offerings
Featured Topics
Featured Products
Events
S&P Global Offerings
Featured Topics
Featured Products
Events
S&P Global Offerings
Featured Topics
Featured Products
Events
Solutions
Capabilities
Delivery Platforms
News & Research
Our Methodology
Methodology & Participation
Reference Tools
Featured Events
S&P Global
S&P Global Offerings
S&P Global
Research & Insights
Solutions
Capabilities
Delivery Platforms
News & Research
Our Methodology
Methodology & Participation
Reference Tools
Featured Events
S&P Global
S&P Global Offerings
S&P Global
Research & Insights
S&P Global Offerings
Featured Topics
Featured Products
Events
Support
07 Mar 2018 | 13:15 UTC — Insight Blog
Featuring Annette Hugh
Blockchain’s use by the global energy industry in the years ahead is the subject du jour at industry gatherings these days.
This year’s CERAWeek by IHS Markit conference is no exception, with the theme threaded throughout the event with panels and the Global Blockchain Business Council hosting a discussion center featuring industry experts.
Some of the areas discussed for implementing blockchain technology included managing invoice processes, supply chain management and smart contracts.
The technology will open up data silos, according to Gert Sylvest, co-founder and general manager of Tradeshift Frontiers.
“It enables a different way to work with other partners,” BP’s Chief Digital Innovation Officer Morag Watson told CERAWeek attendees.
Trading house Trafigura is one company that has tried to leverage blockchain to some of these ends by embarking on a proof of concept last year in the US crude market to solve for some specific problems in a market where there were a few large players.
“We tried to find a small universe with a critical mass," said Rodney Malcolm, chief financial officer for Trafigura Americas.
In the US crude market effort, the focus has been on improving invoice reconciliation and forming an information warehouse where trading partners can more easily track information versus long email chains which underscore the execution of deals.
The use of blockchain to drive price discovery is not a goal of the US crude oil POC, Malcolm said, but rather after the price of a deal has been agreed the technology can facilitate the trade’s execution by making parts of that process more efficient. Malcolm said the number of emails tied to one trade are enormous and streamlining that alone would bring enormous value to cutting downtime and adding transparency to the details around a trade.
Utilizing blockchain to create more efficiencies and standardization along the value chain appears where the market sees the near-term focus, but it won’t be the elixir to cure all that ails the global energy industry.
“Used smartly it will be the answer to some things,” BP’s Watson said. “In five to 10 years, it won’t even be mentioned. It will be like the internet. You just assume it’s there. It will be part of the fabric.”