The Abu Dhabi National Oil Company (ADNOC) has recently integrated blockchain technology into its internal processes, with plans for broader implementation throughout its supply chain network.
As a cornerstone of the United Arab Emirates’ economy for nearly 50 years, ADNOC holds a significant role in the oil and gas industry. With its production of three million barrels of oil daily and substantial gas processing capabilities, ADNOC encompasses 14 distinct entities involved in various aspects of oil and gas extraction, processing, transportation, sales, and marketing.
Abdul Nasser Al Mughairbi, head of digital at ADNOC, emphasized the individual profitability of each company within the conglomerate, highlighting the continuous exchange of products among these entities. Formerly conducted through conventional accounting methods and physical pipelines, these product transfers have now transitioned to IBM’s Hyperledger business blockchain framework, enhancing visibility and efficiency within ADNOC’s internal network.
Al Mughairbi elaborated on the benefits of blockchain, citing increased transparency as a pivotal advantage, particularly for shareholder companies like Total and BP. ADNOC aims to further leverage this technology by extending its application to the wider supply chain. Al Mughairbi expressed plans to incorporate smart contracts in these expansions, enabling streamlined negotiations and eliminating intermediaries, thus minimizing complexities in product allocation and accounting processes.
Established in 2017 to facilitate ADNOC’s technological transformation, Al Mughairbi’s department focuses on leveraging technologies such as blockchain and machine learning. This strategic initiative aligns with the ongoing industry evolution, known as Oil and Gas Industry 4.0, where innovations like the Internet of Things (IoT) and Artificial Intelligence (AI) redefine operational paradigms.
According to Gartner’s research, public blockchains are anticipated to form a fundamental global decentralized identity management system by 2025. The same research also indicates a projected 60% adoption rate of blockchain technologies among CIOs in the next three years, signaling a growing industry interest in its application.
However, while blockchain presents numerous advantages, its widespread adoption remains contingent upon overcoming various challenges. ADNOC’s proactive embrace of blockchain technology, despite its traditional conservatism in adopting new IT solutions, serves as an example for other companies across different sectors, shedding light on the technology’s potential for transformative change.
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