Blockchain Group Successfully Completes Produced Water Haulage Pilot in Bakken

The Offshore Operators Committee (OOC) Oil & Gas Blockchain Consortium said on June 3 it has successfully completed its first pilot leveraging blockchain technology.

The pilot, developed in partnership with Data Gumbo utilizing its GumboNet blockchain network, proved a platform for automating produced water haulage from field reading to invoice payment. It was executed on five Equinor wells in the Bakken field in North Dakota with water logistics and transportation provider Nuverra Environmental Solutions and a midstream disposal company. It was the first industry-wide use of a blockchain-native network for produced water haulage.

The OOC Oil & Gas Blockchain Consortium is a 10-company group including ConocoPhillips, Chevron, Hess, Marathon, Noble Energy, Pioneer Natural Resources, Equinor, Exxon Mobil Corp., Repsol and Royal Dutch Shell, which used the technology to automate payments for oilfield water-handling.

Blockchain, which underpins bitcoin and other digital currencies, is a distributed ledger that can make and verify transactions on a network in real time, offering the potential to speed transactions, cut costs and lower the risk of fraud.

In the Consortium's pilot, the technology was able to reduce the work flow process from 90-120 days to one to seven days, eliminating nine steps. It was also able to automatically validate 85% of all volume measurements, the group said.

Although the test focused exclusively on water hauling, the OCC Consortium plans to expand its use to other commodities and services, it said.

The pilot finished at the end of January, but the process for moving forward with the technology has been accelerated due to the COVID-19 pandemic and this year’s crash in oil prices, said Rebecca Hofmann, chairman of the OOC Blockchain Consortium.

“This could be adopted this year,” she said, adding savings could be in the millions of dollars. “Equinor and others in the consortium are seeing the value and investigating how this can be implemented to bring much needed cost savings back into their companies.”