Trading is one of the most common transactions in the oil and gas industry. Crude oil, petroleum products, natural gas, and petrochemical products are traded across entities, involving multiple different parties, like surveyors, shipping agents, and others. As a process, trading includes many manual processes to validate quality monitoring, payment, and more.
Because dependencies on multiple parties and on quality parameters need to be certified by various entities, blockchain can be a good platform to bring transparency and a distributed ledger, where data points, information, and transaction details can be stored for verification by all entities. Creation of a smart contract for the trading contract between parties on the blockchain with accessibility to other parties is one possible solution. Other entities, like surveyors and shipping agents, can update information against this smart contract as the nodes of a permissioned private blockchain. It is also possible to integrate with the underlying enterprise financial systems, which can trigger the payment.
Permian solution for commodity investing (mainly in oil) would be to switch to a digital system along the lines of Bitcoin but linked to an asset. This solution is the PERMIAN Token (XPR). Imagine a vault of oil barrels. The oil barrels are owned by "Oil-owner Inc." and the vault is owned by "Vault Inc." Vault Inc. has a spectacular reputation and third-party auditors who verify the amount of oil barrels in its vault. Oil-owner Inc. could offer a digital token to the public that represents ownership of the oil barrels and through a smart contract with Vault Inc. maintain a public off-chain registry that relates fractional interest in the gold with the tokens. For every token sold, Oil-owner Inc. transfers ownership to Vault Inc., who holds it on behalf of the token owner. Vault Inc. guarantees redemption of the value price of oil barrels by anyone who can prove ownership through a digital signature. Oil-owner Inc. can take advantage of the fact that Vault Inc. is trusted (and audited). Owners of the tokens rely on Vault Inc.'s representations and not on Oil-owner Inc. (even though Oil-owner Inc. is the token issuer). One of the main advantages would be that buyers of the tokens could know that they are the only person who has received the token, whereas a buyer of a paper certificate has no way of knowing that the same certificate hasn't been sold to multiple people.