Why Blockchain Technology Is Critical To The Oil and Gas Trade

Crypto Assets have developed and increased in numbers in the past years and more and more industries have now one or multiple tokens to trade different types of values on the blockchain. In industries such as finance, payments, medicine, gold, airline and others, assets are becoming tokenized and large enterprises are gradually understanding the power of the blockchain. This is now also the case for the oil and gas industries. In this article, I will talk about the importance of the blockchain and creating tokenized assets that allow for an open, secure, transparent and direct oil and gas investment ecosystem powered by blockchain technology.

How could the blockchain technology help the oil and gas trade?

The oil and gas trade is in need of a change in the way operations and campaigns are designed, funded, and carried out. There is a lack of renewal and the technologies and resources used are often outdated and unadapted to the current markets. There is a disconnect between big oil & gas companies and investors. This is where the blockchain technology can intervene and help the industry. There needs to be what we call a “tokenization” of assets. This means that Oil & Gas reserves and production campaigns would be transformed into tokenized assets [digital representation of ownership] and would be available for purchase, sale or trade on the blockchain. These tokenized assets would represent upcoming and current exploration and production campaigns for fossil fuels and oil, as well as proven oil reserves. They would be turned into digital assets on the blockchain network. In other words, investors would be able to profit from tokenized gas and oil that have yet to be extracted. Moreover, by using this method, suppliers will be able to have their orders funded in advance, even if they have not been produced yet. These oil and gas orders could then be traded on the blockchain, thus raising the demand and the value injected in the production of oil and gas. The idea behind the tokenization of oil and gas would be that producers would receive the funds from investors even before the extraction and production campaigns begin. It would reduce the risk of overproduction and waste. It would allow suppliers to obtain revenue straight from individual, direct investors, cut costs and expenses, and completely remove third-party organizations from the picture (such as brokers). The ability for investors to purchase coins and tokens related to oil and gas would increase the industry’s appeal to the general public, make it more efficient and less costly for producers.

Conclusion

In my opinion, the tokenization of oil and gas as digital assets is the future of the industry and is essential for the oil and gas trade. This new take on gas and oil campaigns thanks to the blockchain technology and digital assets will boost the industry and will make it even more prosperous in the future. PermianChain is now setting the stage to launch a tokenized oil asset; the Permian Token (XPR), which will represent rights to the value of proven oil reserves and ongoing oil production campaigns that are listed on a dedicated blockchain network; the PermianChain network. As the only reserve-backed digital asset, it could serve as a store of value, and wealth preservation solution for professional investors. This is why PermianChain can truly revolutionize the industry and such technological advancement is critical for the oil and gas trade.

— by Paresh Masani

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