Machine learning gains renewed momentum as oil companies tap into AI
Russian oil producer goes digital; GE and Noble digitize their marine operations
A U.S.-based startup is offering distributed ledger-based Smart Contracts to enable greater clarity over what is paid for meeting drilling performance targets.
Data Gumbo, a Houston-based Blockchain as a Service (BaaS) start-up, earlier this year announced its entrance into the completions segment of upstream oil & gas – tailoring this emerging technology to meet the sector’s needs.
Andrew Bruce, Data Gumbo’s Founder and CEO noted that with the advent of modern hydraulic fracturing in the oil and gas industry, the days of approximations and guess work are fading quickly as the industrial internet of things (IIoT), big data, and data analytics have exploded to service the segment.
Blockchain’s distributed ledger technology is the foundation that will disrupt how contracts are set, incentives are aligned, and operations optimised.
A “Smart Contract”, or a computer protocol designed to facilitate, verify, and enforce the terms of a contract, operates in parallel to the Blockchain.
Feeding off the data automatically produced from IIoT devices located on a pad, the smart contract assesses the work of a crew or service provider to generate premiums or penalties based on actual, real-time performance versus a rolling average.
This Key Performance Indicator (KPI) data is fully logged within the Blockchain allowing all participants to view the source data along with the calculations used to determine performance and payments. After verification from each participant, transactions can be sent autonomously to internal ERP software, or directly to payment accounts. Streamlining will lead to lower net payment terms and cash could even be released on a per- stage basis.
“The head of engineering at marine contractors here had an interesting perspective on blockchain relative to automation and cognitive drilling,” said Bruce, referring to so-called cognitive systems that apply human-like levels of understanding towards drilling-related data, in the aim of solving common problems.
“He noted that everyone has for long time been trying to figure out how you make a business case that pays for things like cognitive drilling. His whole position was that with blockchain, for the first time there is a cast-iron business case that proves the value of all these automation trends and enable people to get paid for it.”