One of the major features of blockchain technology is the transparency it offers to any industry that utilizes its technology. Data sharing facilitated by third parties will be eliminated.This transparency feature can greatly benefit key industry processes such as the selection of partners for new projects, the reporting of revenues accrued from production, and joint interest billing. Blockchain technology could also bring down compliance cost to the bare minimum, and improve the speed of decision making if companies start utilizing tools that enables safe data sharing on the blockchain network.
Additionally, blockchain technology will help companies provide a more transparent reporting of their production revenues to the US Department of the Interior’s Office of Natural Resources Revenue which would reduce their risk of being charged hefty fines for misreporting operational revenues. Through the use of smart contracts, we can now replace paper and complex legal agreements that are cumbersome, difficult to transfer and can be hard to track for the average person and even for sophisticated investors. Our 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.