Blockchain, the foundational technology behind digital currencies like Bitcoin, is increasingly making its way into the oil and gas industry. Major players such as BP and Shell are leading the charge, exploring how blockchain can revolutionize their operations.
At the China Energy Week, Zhang Yao from Bit Capital highlighted that energy blockchain could unlock trillions in digital assets. He noted that Alibaba already holds around 4 trillion in digital assets, and with Bitcoin's explosive growth, global digital currency assets have reached approximately one trillion USD. Blockchain is now being tested deeply within the oil sector, with real-world applications emerging.
Zhang explained that the core of blockchain is eliminating intermediaries, enabling direct exchanges between parties. From barter systems to gold, paper money, and the internet, human society has always relied on intermediaries. With blockchain, people can build decentralized platforms that bypass traditional intermediaries like Alipay or WeChat, reducing costs and increasing efficiency.
He criticized the current system, where users pay high fees through platforms like Alipay and WeChat, while these companies profit significantly. By using blockchain, data can be stored locally, transactions conducted directly, and distribution managed independently—without relying on third-party tools.
The evolution of oil blockchain is divided into three key areas: supply chain, finance, and payment information flow. BP, for instance, is leveraging its strong supply chain integration to implement blockchain solutions that track crude oil from producers to retailers, cutting down on information, settlement, and logistics costs.
Shell recently invested in Applied Blockchain, a company specializing in distributed ledger technology and smart contracts. This move marks a significant step for blockchain into the energy sector, allowing real-world deployment of blockchain-based solutions.
Johan Krebbers, CTO of Shell’s global solutions division, emphasized that blockchain can simplify operations across the entire energy value chain, from supplier collaboration to customer service.
In 2017, BP, Shell, Petronas, and other major banks formed an alliance to develop a blockchain-based trading platform by 2018. This platform aimed to streamline cross-border payments, record management, and supply chain processes.
Zhang also pointed out that blockchain ensures transparency and trust. For example, IBM’s Hyperledger Fabric allows for secure, tamper-proof transaction records. If a node tries to falsify data, it can be detected, ensuring the integrity of the system.
Beyond cost savings, blockchain helps stabilize oil prices by aligning production with demand. It enables dynamic coordination from production to consumer needs, improving efficiency.
Venezuela launched Petro, a cryptocurrency backed by oil reserves, in 2018. The government claimed each Petro equals one barrel of oil, with 5 billion barrels reserved as collateral. This marked one of the first attempts to tie a digital currency directly to energy assets.
Zhang believes that only industry-specific data and digital currencies tied to national currencies will form the mainstream. As energy blockchain matures, digital assets may gain dominance in financial flows.
He outlined three types of blockchain: public chains, consortium chains, and private chains. Public chains with financial consensus mechanisms could control digital asset pricing, while consortium chains like BP’s might become the digital-age equivalents of traditional giants. Private chains, especially those integrating retail ecosystems, could evolve into small-scale versions of Taobao.
Zhang also described gas stations as existing blockchain nodes. They connect to side chains like car washes, tourism services, and aftermarkets. Those contributing to the main chain could become new retail leaders.
In conclusion, the future of energy and retail lies in blockchain. Gas stations that embrace digital transformation could become central nodes in a decentralized network, securing their place in the evolving market. As new energy vehicles rise, those who adapt early will thrive in the coming decade.
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