Potential Blockchain Application in Energy Industry – Asset Lifecycle Management

A large portion of the existing systems in oil & gas industry – exploration, production, and supply chain and logistics operations - are centralized, manual, and disintegrated, making them vulnerable to manipulation and single point of failure. Blockchain technology offers practical solutions in providing traceability, immutability, operational transparency, audit, security, and trusted provenance features.

An issue/challenge to address:

Conventional infrastructure challenges and limitations in monitoring, operating and maintaining a massive number of assets.

Results from a poll conducted on our social media


The procurement, shipment, installation, establishment, and repair activities of oil & gas assets involve different subcontractors, requiring compliance with safety regulations. 

Top 4 expectations from blockchain-based platform/solution:

  • Up-to-date asset inventory records. 
  • Processing of purchase and sale requests, based on equipment supplier scores representing their reputation. 
  • Allow the detection and prevention of fabricated, uncertified, or insufficiently performing equipment that does not meet standards.
  • Minimizing the equipment costs, field staff safety issues, and service interruptions.

Suitable Blockchain type:

Consortium Blockchain: Also known as federated blockchain. 

  1. It is not owned and used by one sole organization or group. Multiple organizations can exist on a single federated blockchain, allowing them to share data across the network privately and securely. Every pre-authorized user within a federated network also has equal control as the next.
  2. Asset life-cycle management requires high scalability – so, a consortium blockchain is preferred, with authorized organizations taking part in the validation of new blocks.

Suitable Consensus Mechanism:

Proof of Authority (PoA) – Identity as a Stake: A system in which the actors put their identity (read reputation) into stakes.

  • Validators provide their official identity, recognized in real life. Blockchain will therefore be able to obtain real, truthful data.
  • Requires minimal computational effort and does not need specialized equipment; PoA platform is quite cheap to run and maintain. (Energy consumption and operational cost aspect)

PoA system is based on a limited number of block validators; thus, allowing the network to reach consensus quickly. The transactions are confirmed in less than 1 second (transaction speed aspect). Because of this reason, PoA systems are more scalable.

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