The OOC Oil & GasBlockchain Consortium has collaborated with Canadian software firm GuildOne tosuccessfully test the industrys first blockchain application for Authorizationfor Expenditure (AFE) balloting.

AFE focuses on cost andexpense approval, particularly in the upstream oil and gas process wherebylarge expenditure is required with regards to exploration, development, andproduction.

Integrating blockchainto conventional AFE balloting would streamline and reduce the manuallyintensive and largely paper-driven process of approving capital and expense projectsand provide immutable documentation of the final interests, the consortium notes.The AFE balloting proof of concept (POC) tested the ability to send ballots andmake elections digitally utilising the technology, with smart contract enabledworkflows calculating working interests automatically.

This year, the AFEballoting scope will be expanded to capture complicated scenarios, whereasinitial design and testing will be executed on the joint interest billingexchange process that deals with the billing and payment of expendituresbetween joint venture partners.

In September, the consortium announced that it would start testing the blockchain technology to lowering administrative costs in their field operations, along with reducing payment disputes and risk of fraud. It was reported that the contract was given to Houston-based software company Data Gumbo to pilot blockchain for water handling services in the Bakken shale field in North Dakota.

This time last year, post trade management platform VAKT announced three new strategic investors, in the shape of oil and gas giants Chevron, Total, and Reliance Industries, which are among the five of the worlds top ten largest oil and gas companies by market capitalisation. VAKTs blockchain-based platform is said to be the worlds first fully operational enterprise-grade blockchain solution that assures major efficiency gains and cost savings for post-trade processing, including trade finance.

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Oil & Gas Blockchain Consortium goes ahead with project around expense approval - The Block - The Block