Hydrocarbon Processing - September 2021 - 10

Business Trends
in its Renuva mattress recycling program. In addition, crossindustry
collaborations with an initial upstream focus, such as
Blockchain for Energy, are now actively seeking membership
across the full oil and gas value chain.
FIG. 2. Blockchain patent filings around the world.
communicated between entities. The decentralized and immutable
nature of blockchain will enable entities to trust that they
are using up-to-date and accurate data that is consistent with
counterpart data available to the other entities. Cost-savings and
improved efficiencies along supply chains should arise because
the system is not hindered by the need for a central authority.
Smart contracts also offer particularly special advantages with
their ability to automatically execute and enforce contractual
agreements in real time, saving time and money for the entities
involved. Of course, some data generated by entities may be
confidential, and it is well within blockchain's capability to realize
what is known as a permissioned system, which can adhere
to certain requirements of confidentiality between entities.
Recent years have seen mounting evidence for blockchain
evolving from a disruptive technology to tangible gains in the
oil and gas industry. In June 2020, the Offshore Operators Committee
(OOC) Oil and Gas Blockchain Consortium released the
results of a pilot blockchain platform for automating and managing
water haulage from field readings to invoice payments. Initial
results indicated that the traditional 90-d-120-d process was reduced
to just seven days. This was achieved by reducing the number
of workflow steps by more than half by removing all manual
interventions. Moreover, 85% of all volume measurements were
automatically validated, with the project aiming to reach 100%
automatic validation in the future. Contract costs have been reduced
by 25%-35% using blockchain-based smart contracts.
Also in June 2020, BHP Billiton completed its first iron ore
trade on a blockchain platform, worth $14 MM. This followed
BHP's September 2019 announcement that they will start using
blockchain technologies to digitize and streamline their
supply chain. BHP reported that the blockchain platform was
able to automatically process contractual terms, exchange digital
documents between entities and provide real-time visibility
of the cargo.
Blockchain adoption has been slower in the downstream
processing sector; however, there has been increased activity
over the past year, with major petrochemical players such as
BASF and Dow publishing their own pilot programs. BASF's
pilot used blockchain to track the recyclability of plastics in
British Columbia, Canada, by embedding a marker into the
plastic material that can survive recycling, enabling the scanning
and tracking of the percentage of recycled content, the
type of plastic recycled, the manufacturer and the number of
times the material has been recycled. The intention is to promote
an economic model in which manufacturers can generate
a credit/token each time the plastic is recycled.
Dow Polyurethanes launched a pilot in early 2021 to track
the compositional information of mattresses during recycling
10 SEPTEMBER 2021 | HydrocarbonProcessing.com
The patent landscape. The enormous potential of blockchain
technology has seen early investors seeking to maintain
exclusivity to maximize their returns. The most effective way of
achieving this is using patent systems around the world.
Patent filing statistics show that the number of blockchain
patent applications filed globally has skyrocketed since 2016.
Many blockchain patents have already been granted, and the
number of new applications continues to increase unabated.
The largest proportion of blockchain patent applications are being
filed in China, followed by the U.S. and South Korea (FIG. 2).
Patents are territorial to the countries in which they are granted,
which indicates that blockchain developers are most concerned
with seeking exclusivity for their technology in these top countries.
There is comparatively little regard for the rest of the world
in the eyes of those seeking to patent blockchain technologies.
Given the relative infancy of blockchain technology, it can be
expected that a fair number of blockchain patent applications
may be attempts at land-grabs of key technological ideas. As
such, there is a high chance of high volumes of patent litigation
in the future, similar to that experienced by the telecoms industry
a decade ago. This effect could be amplified for blockchain
technology given its reach across many industry sectors.
If the focus is in China and the U.S., then this leaves open a
wide amount of freedom and opportunity in other territories.
Territories key to the oil and gas supply chain-such as Norway,
the Persian Gulf region and Australia-are seeing little
patenting activity for blockchain technology. Therefore, oil and
gas entities operating in those territories could benefit from a
natural immunity from patent holders in China and the U.S.
Furthermore, this lack of activity may indicate that there is still a
wealth of blockchain technology to be developed and exploited
in the oil and gas industry.
Takeaway. Blockchain technology is proven to provide many
benefits to the oil and gas sector. The decentralized and immutable
nature of blockchain can improve trust and transparency
between entities. Increased digitization and process automation
will create time- and cost-savings throughout supply chains.
With most patenting activity currently limited to a few specific
regions, a window of opportunity has opened for sectors such as
oil and gas with a wider geographical reach. It will be fascinating
to see which companies exploit or monopolize blockchain over
the next decade in key oil and gas regions beyond those seeing
the current surge in patent filings.
GREG STEPNEY is a Chemical Patent Attorney and Partner at Withers and
Rogers LLP, one of the largest European patent firms. He earned a PhD in
organic chemistry and specializes in downstream oil and gas, petrochemicals
and industrial chemistry inventions.
PHILIP HORLER is a Patent Attorney and Partner at Withers and Rogers LLP.
He specializes in electronics and software related inventions and established
Withers and Rogers' specialist blockchain technology group in 2017.
RAJAN CHAUHAN is a Patent Attorney and Associate at Withers and Rogers
LLP. He specializes in electronic, electrical and software inventions and is also
a member of Withers and Rogers' specialist blockchain technology group.
http://www.HydrocarbonProcessing.com
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