ADNOC digital operations manager on its blockchain platform and next steps
Standing in ADNOC Group's Panorama Command Centre, Ali Alshehhi, manager of business and operations for ADNOC's digital unit, says the company is undergoing a "step change" right now as it rolls out blockchain in the company, and tells us about its next steps as it digitises its operations on and off the oilfield.
Where do you expect blockchain to benefit ADNOC most?
This is the first time in the oil and gas industry that a blockchain application has been applied on production accounting. The success in blockchain applications is clear in other industries, we are beyond establishing the case for it.
For ADNOC, as a group of companies that operate in the supply chain of oil and gas, whether from drilling wells all the way to shipping products and the petrochemicals and crude oil and gas processing in between, all of these industries interact on a single value chain.
There was always a business need to improve, improve efficiencies, reduce costs, and in our case, blockchain helps us establish the production accounting of those products. It streamlines several processes that exist between those companies and makes it seamless, more accurate, more transparent and immutable… All the benefits that come from a typical blockchain application.
How does this blockchain platform fit into ADNOC’s wider plans?
We look at blockchain as a technology, a tool to help us improve our efficiency and the way we do business. When we use blockchain, what we are doing is basically reducing a lot of existing systems and processes into a streamlined, seamless application and platform, so today, the way we used to do production accounting takes time, it takes weeks, it takes months and even then it takes effort to ensure the quality and accuracy of the numbers that go through on this platform.
In a blockchain application, all of this is reduced. The effort that it takes to maintain a certain quality goes down dramatically. A key perk that we found very useful to us in a blockchain application is we improve so much the transparency and the flow of information throughout the value chain. This is important not only for the stakeholders, shareholders of the company, but also for our customers.
ADNOC ultimately plans to use blockchain with customers as well… Is there a timeline for this?
Right now, we’re in this step change from the production accounting. The immediate next step is to reach out to our customers. That’s a natural progression. If you look at the supply chain we’re moving from the wells all the way to our inventories, from there to the customers that’s a natural easy step, because all of the groundwork has been established already.
What are some of the challenges associated with rolling out this blockchain platform?
When it comes to introducing blockchain to our organisation there two main challenges: System-related challenges and people-related challenges. When it comes to the technology, that is the easy part. The tricky part comes in the people aspect. When it comes to people, we need to be mindful of the buy-in of the organisation—we need to establish that. The pace of the change is so fast and without a strong buy-in from the organisation, at all levels, that change will not be possible.
We are constantly in touch and we constantly address the concerns of the stakeholders throughout the organisation at all levels, especially the working level, the people who deal with this on a day-by-day basis. Their buy-in is important. We need to convince them that this is the right thing for the organisation. When it comes to blockchain in production accounting, we take their concerns and address the challenges they face.
Currently, we run two systems. We run the old system and the new system in parallel. This deployment is important. We could have made it an abrupt change. However, we thought it was more useful to have a natural progression, Fast, natural progression.
They slowly migrate into the new system, we’re establishing that buy-in, and once we pass this stage it’s easy growth from there on.