Abu Dhabi National Oil Company taps IBM Blockchain for oil and gas production

The Abu Dhabi National Oil Company (ADNOC), the state-owned oil company of the United Arab Emirates, is collaborating with tech giant IBM as it seeks to leverage blockchain technology.

Using the IBM blockchain, ADNOC piloted an automated system to integrate oil and gas production across the full value chain, allowing tracking, validating and execution of transactions at every stage, from the production well to the end customer.

According to the official release, ADNOC’s blockchain pilot provided a single platform that automated the accounting process by tracking the quantities and financial values of each bilateral transaction between ADNOC’s operating companies.

Taking the example of crude oil’s supply chain, it said that all quantities are accounted for on a daily basis along with the associated monetary values. The blockchain application also includes other products such as gas, condensates, Natural Gas Liquids (NGLs) and Sulphur. These products are exchanged between ADNOC’ operating companies and exported to customers overseas.

Blockchain technology, ADNOC said, will reduce the time taken to execute transactions between its operating companies and enhance operational efficiencies across its full value chain. The technology will also bring more transparency to transactions, thereby improving the reliability of production data.

“We believe this could be the first application of Blockchain in oil and gas production accounting anywhere in the world,” Abdul Nasser Al Mughairbi, ADNOC Digital Unit Manager

“Blockchain is a game-changer. It will substantially reduce our operating costs by eliminating time-consuming and labor-intensive processes, strengthen the marketing and trading of our products, and create long-term sustainable value that will ensure that ADNOC delivers on its 2030 smart growth strategy.”

ADNOC said that the application will be expanded to link it to customers and investors, providing seamless integration among stakeholders, adding:

“This enhanced clarity and transparency will reduce inherent business risks and consequently enhance the attractiveness of ADNOC Group as an investment partner.”