Recently, the world has seen countries in the Middle East significantly explore blockchain technology in all sectors and industries, and the oil and gas industry is no exception. Indeed, the Middle East is a region blessed with oil, and it is home to some of the largest oil-producing nations in the world. However, in light of increased awareness about the dangers caused by oil production and the discovery of the several capabilities of blockchain technology, these countries have thought it best to utilize blockchain technology for the efficiency of the oil and gas industry and to promote transparency and security.
What is the Nexus between the Middle East and Blockchain Technology
Here are five ways that countries in the Middle East have and can potentially utilize blockchain technology in the oil and gas industry.
- Supply Chain Tracking
Blockchain technology is rapidly being employed for the supply chain management. In this way, the technology is used to monitor the oil production and delivery processes. From the first pit stop of output to the final delivery to customers, efficiency and transparency are essential. Blockchain seeks to achieve these characteristics as it helps track product transportation, storage, and distribution to prevent fraud and regulatory delays.
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Smart Contracts
Indeed, it is common knowledge that smart contracts are an innovation of blockchain technology. Blockchain technology is used in the oil and gas sector to automate the processes involved in oil production in the Middle East. Where there is a need to procure a service or device, process some payments, or manage several oil rigs, smart contracts are used to reduce costs and increase transparency while also paying close attention to efficiency.
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Managing Assets
Blockchain technology has recently been employed by countries in the Middle East, like Kuwait and the United Arab Emirates, to improve asset management. In this wise, the technology is used to keep a detailed record of the industry’s assets and also allow for effective maintenance and tracking of the various assets.
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Royalty Management
Blockchain technology is surprisingly efficient in creating a transparent and airtight system for managing royalties and profits obtained from production. Blockchain can help to keep the record of royalty payments and ownership information on a decentralized ledger. It can also be used to trace all transactions of assets and promote transparency in conveying such support to the appropriate parties.
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Carbon Credit Trading
Surprisingly, blockchain can create a transparent and secure platform for companies to trade in carbon offsets to allow for more credit to meet emission reduction targets. In this wise, the technology can provide security and efficiency in ensuring that the credits are duplicated or falsified. It can also make carbon credit trading quicker and more cost-effective. Finally, it can provide a standard form for buying and selling, which may ultimately lead to the standardization of carbon credit trading.
Conclusion
Blockchain technology is taking the world in strides, and the Middle East is here for it. From the United Arab Emirates to Saudi Arabia, Kuwait, and Bahrain, several Middle East countries are rapidly adopting the use of blockchain technology in their energy and oil production. Of course, there are still unnavigated territories regarding the Middle East and blockchain technology, and there is no doubt that the future holds so much more for the region.
