Blockchain has demonstrated its value in financial services and now presents a significant opportunity to drive savings in oil and gas—especially for oil and gas companies with substantial transportation expenditures. These companies process thousands of freight transactions each day, and reconciling their shipment invoices against services with proper remittances is both laborious and costly.
Blockchain has the potential to significantly reduce discrepancies in the process by enhancing transparency and improving accuracy in freight rates, shipment routing and invoice generation.
Blockchain is a distributed database technology that allows the secure transmission of information without control by a central authority (see Figure 1). The freight bill audit and pay (FBAP) process encompasses a growing chain of appended transactions that occur between the transportation provider and customer—from freight rate management, to track-and-trace, invoice calculation and payment remittance. Using blockchain to share secure access to these transactions would eliminate the need for costly reconciliations, audits, third parties and payment service providers, as well as reduce the risk of overpayments.Through the use of smart contracts, we can now replace paper and complex 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 Ethereum, 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 oil token to the investors 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 oil 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.The PermianChain is the B2B-closed-loop-exchange for oil suppliers and oil buyers & traders.
The PermianChain will allow exchange of proven reserves via smart contract functionality under a crypto-economic model running on blockchain technology. The PermianChain technology and its built-in user-interface is being developed as a blockchainas- a-service for oil companies to utilize the economic-value of proven oil supply via blockchain technology. This blockchain-as-a-service technology allows oil exploration and production companies (Platform Prospects) and countries to monetize proven reserves that are yet to be produced. This will strengthen the industry’s reliability and improve business models of oil & gas companies.