AP NEWS
Press release content from Business Wire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Business Wire
Press release content from Business Wire. The AP news staff was not involved in its creation.

OOC Oil & Gas Blockchain Consortium Successfully Tests Digitizing the AFE Balloting Process Leveraging Blockchain Technology

December 18, 2019 GMT

HOUSTON--(BUSINESS WIRE)--Dec 18, 2019--

The OOC Oil & Gas Blockchain Consortium today announced that it has engaged with GuildOne to successfully test the industry’s first blockchain application for Authorization for Expenditure (AFE) balloting.

AFEs are used in the oil and gas industry to approve capital and expense projects and determine working interests among parties participating in projects under a joint operating agreement. Conventional AFE balloting is a manually intensive and largely paper-driven process that can take significant time and frequently results in subsequent working interest disputes. Blockchain seeks to streamline the approval process reducing cycle time and errors, as well as provide immutable documentation of the final working interests.

The AFE balloting proof of concept (POC) tested the ability to send ballots and make elections digitally utilizing blockchain technology, with smart contract enabled workflows calculating working interests automatically. In the test, the operator electronically submitted AFEs under multiple scenarios to nine non-operating partners using blockchain nodes, which then automatically calculated working interest percentages based on the elections made by each partner. The balloting lasted several rounds until a final working interest among participating parties was determined.

“We are very excited to have completed the building and testing of this POC in less than four months,” said Rebecca Hofmann, chairman of the OOC Oil & Gas Blockchain Consortium. “Successfully proving the application of blockchain in the AFE balloting process with all ten operator member companies demonstrates the power of this technology and its ability to transform fundamental oil and gas business activities.”

The POC completes an important first step in the path to transforming joint venture management in the oil and gas industry. In 2020, the AFE balloting scope will be expanded to capture more complex scenarios, while initial design and testing will be performed on the joint interest billing (JIB) exchange process, which deals with the billing and payment of expenditures between joint venture partners. The intent is to integrate JIB exchange with AFE balloting for a seamless end-to-end way to manage joint venture operations.

“AFE balloting represents just one of several use cases with common industry pain points being advanced within the consortium,” said JD Franke, vice-chairman of the OOC Oil & Gas Blockchain Consortium. “The success of this POC demonstrates how the industry can use blockchain technology to address these pain points, and we expect to leverage learnings from this project to realize key blockchain frameworks and guidelines for the oil and gas industry.”

About the OOC Oil & Gas Blockchain Consortium

The OOC Oil & Gas Blockchain Consortium is an oil and gas industry consortium that was founded to advance blockchain technology for the purpose of driving industry learnings, guidelines, frameworks and capabilities around common industry pain points. Current members include Chevron, ConocoPhillips, Equinor, ExxonMobil, Hess, Marathon, Noble Energy, Pioneer Natural Resources, Repsol, and Shell. For more information, go to www.oocblockchain.com.

View source version on businesswire.com:https://www.businesswire.com/news/home/20191218005033/en/

CONTACT: Media Contact

Rebecca Hofmann

OOC Oil & Gas Blockchain Consortium

media@oocblockchain.com

KEYWORD: TEXAS UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: OIL/GAS ENERGY

SOURCE: OOC Oil & Gas Blockchain Consortium

Copyright Business Wire 2019.

PUB: 12/18/2019 08:30 AM/DISC: 12/18/2019 08:30 AM

http://www.businesswire.com/news/home/20191218005033/en