There are three categories in the gas and oil industry, upstream, midstream and downstream. Each one actually presents a different part of the complex process in this industry. While upstream presents the resource extraction and exploration, the midstream is referred to transport and storing of the extracted resources. Final downstream category presents the part in which are final products refined from resources and provided to future users. This path from clear resource to final stage is really complex and includes sometimes even dozens or hundreds of companies, articles, actions and legal arrangements.
These categories are coordinated through various methods like manual data entries, written contract or compromised processes and this is where the blockchain technology makes its role. It optimizes reconciliation, communication and info management in order to help and achieve the highest integrated results of production.
As said, includes exploration and extraction itself so more exactly these are the companies or stakeholders which make drilling and contract companies. This part actually includes the biggest numbers of partners which are based to work on transmission and data management in order of high profit and success. Performance-based contracts are also an important part of this stage which makes sure that while one partner completes certain task it initiates other partner’s productivity. Blockchain technology makes sure partners do their job by making them “staking” a value which can be some profit percentage, outright money or similar. These smart contracts make sure other teams complete their work as it should be. Reconciliation process which is used to pay the companies is much more improved and reduced to just a few days.
This stage includes transport from field to refineries which is done by various rails, trucks, pipelines or tankers. Blockchain technology improves this stage as the first one with its benefits. For example, these uses pipelines may be sometimes for thousands of miles long. Every part of it must be properly inspected and confirmed it is safe and functional. Here comes the part where midstream companies get in touch with other local companies and make contracts with which every of this local company is obligated to inspect a specific section of the pipeline, more exactly section found in their region. Here comes part same like in upstream stage and that is “staking” value when declaring each section. These contracts also include employees who do the inspection altogether with recorded results, expertise, training and license. There is a lot of money, time and energy saved.
Part of this huge path which contains preparation, refining and clarifying natural gas and crude oil to the well-recognized products for customers. Those are jet fuel, asphalt, diesel, gasoline and many others. We all heard about Shell right? Blockchain technology suits here perfectly when it comes to gas stations and gasoline. It builds satisfaction and loyalty of the customers, improves cost and reduces data management by implementing a series of smart contracts. This makes successful coordination of downstream companies by parent companies.