Oil and gas is sold in large volumes and as such entail significant value, not unlike the size and scale of transactions between banks. The frequency of transactions is also high; for example, a 300,000 barrel per day oil refinery will need to source a large crude carrier every week to maintain adequate volumes, and cargos can cost as much as USD 100 million (two million barrels at USD 50 per barrel). Oil companies also need to be aware of where crude is ultimately sourced. Some exporting nations are from time-to-time under sanctions to prevent trade in this commodity. Blockchain could provide a fully transparent and secure record of the entire supply chain. Using a distributed ledger, digital tokens can be used to represent the asset being transacted. These tokens can be issued by a trusted authority for the needs of the companies or participating parties; for example, if oil and gas companies used a blockchain ledger to buy and sell barrels of oil, transactions could include digital tokens named Brent or WTI. These tokens would represent the underlying asset of a barrel of oil and would remain digitally attached throughout its supply chain journey. Currently, around nine percent of crude oil transactions are disputed, which equates to around USD 150 billion each year. By using tokens in a blockchain, payment could be processed more quickly, paperwork such as title transfers would be eliminated, and disputed transactions could be significantly reduced. It is important to note that the token being exchanged will be subject to gains or losses based on the strength of the underlying fiat (local) currency. If 50 WTI tokens are purchased using US dollars, the value of these tokens are exposed to fluctuations in the US dollar. As the use of cryptocurrencies increases, governments are forming positions on the taxation implications of cryptocurrencies and their exchange for fiat currency.
The Permian Token opportunity allows for direct equity crowdfunding participation by token contributors under a trust-protocol that allows them to benefit from oil supply that is proven to be available but not yet produced. The Strategy With the Permian Token we developed a solution to solve the working capital requirements of oil exploration & production companies and oil exploration and production economies, meanwhile democratizing the direct investment sector for the average investor. The result, allowing seamless and transparent reporting of our worlds energy reserves and oil transactions under an immutable trust protocol (the blockchain). The Company also solved theoretical and technological issues of oil exploration & production by allowing public and private sector to sell proven reserves yet to be produced via blockchain technology under a closed-loop-B2B-exchange (the PermianChain). 11 The PERMIAN Token Offering will launch 10 billion XPR tokens. It is our intention that at least 8.0 billion XPR will be sold during the ITO stages at $0.10 per token. Where we anticipate that 87.5% of the funds raised will go into oil campaigns and acreage with proven reserves, also referred to as P90. Whereas over 6% will be used to invest in continuous technology including blockchain and artificial intelligence for oil & gas exploration and production. Therefore, the total value of circulating XPR will eventually equal to a portion of the total value of Proven Reserves that are identified until each barrel of oil in proven reserves is produced and sold.