Oil and Gas is one of the largest industry in the world. It is a lucrative business yet carries the risk of logistics and storage problems. The process to deliver from the source to the consumer includes exploration, extraction, refining, transporting via oil tankers and pipelines, and marketing of petroleum products.
The problem in this industry lies in the process of delivering millions of oil barrels each day from the raw source into the refinery and then transporting it to the consumer. There is a risk where oil and gas collected from downstream does not tally with the information provided in upstream.Though implementing a blockchain technology into the oil and gas industry is still in its infant phase, prototypes were being made behind the programming room to test out the significant impact in the industry.
It is not impossible that such technology can be used to provide a more reliable way to deliver the oil and gas from upstream to downstream. As the origin of each oil barrel is recorded into the blockchain, it will be hard for anyone to tamper the record of inventory. Thus, providing a transparent system for every participating country.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 industrys reliability and improve business models of oil & gas companies.