Amalto SA, a provider of order-to-cash solutions, and ConsenSys, a global blockchain company, have come together to create a platform that is dedicated to the automation of ticketing processes in the oil and gas industry. Ondiflo, as the joint venture is called, works on the Ethereum blockchain platform and is looking to experiment with pilot programs and by devising new use cases for the industry to improve its process efficiency.
FreightWaves caught up with Rana Basu, the Director of Energy and Natural Resources at ConsenSys, and Jean-Pierre Foehn, the CEO of Amalto SA, to discuss their ideas for Ondiflo and its prospects in the oil and gas industry. “My journey in this field started even before I moved into blockchain technology. I used to be the risk manager for a trading house. We had to deal with a lot of trucks, and that’s when we started looking for systems that could make life a lot easier,” says Basu. “We didn’t find any product that was commercial, that could handle the logistics for tanker trucking – diesel or gas. And we started building our own version, and that is how the whole concept started for me.”
Basu was joined by Foehn, and Sandro Giannetti, an entrepreneur and startup investor, who had been trying to solve the same problem, but in different ways. “We identified issues associated with field ticketing for water hauling, which is one of the use cases that we are addressing on Ondiflo,” says Foehn. “This is how it started for us; we were looking to resolve issues using blockchain.”
Water hauling in the oil and gas industry is a simple yet vital procedure. When oil and gas are being produced, water is a by-product which is stored in tanks and then hauled by trucks to disposal wells or a recycling center where the water is processed. Associated with this process are various transactions involving the trucking companies and the rig stations, where a lot of disputes arise while creating invoices and sending payments.
“The procedure involves calling the trucks at the beginning, which is a service request. Then a field ticket is issued, which describes the service being delivered by the trucking company. Eventually, the field ticket leads to an invoice which leads to the payment,” explains Foehn. “When you put this together, it leads to a lot of issues in the industry – like for example, questions regarding the real volume of water that is transferred from the tank to the truck. And this led us to think that maybe blockchain could help.”
Ondiflo helps capture the water level in the tank through IoT sensors that push information through blockchain, which is then used to create smart contracts where the steps mentioned above can be triggered by leveraging sensor data. By capturing key information about the water volume, time spent on site, contract information, and any additional charges in the blockchain database, the disputes that arise can be addressed quickly and seamlessly.
Ondiflo is looking to create a consortium with four distinct groups as its core players. “The first one is the large oil field operators who are working both offshore and onshore. The second one is the service providers and the third group is the one who works in fuel hauling. We have a lot of them on diesel, heating oil, and jet fuel – they are pulled on trucks and delivered to gas stations and homes. This makes them a very large constituent of the consortium,” explains Basu. “The final group consists of the financiers, who could be banks or non-banking institutions who provide the receivable securitization.”
Over the next quarter, the focus is on launching the consortium and getting the initial adopters and investors on board. The initial prototype is already partly ready and the team is working intently on providing a full-fledged solution that can tackle different types of ticketing issues inundating the industry.
“Blockchain’s initial impact will be in terms of improving efficiency and reducing friction in operational aspects. However, combining the emergence of industrial IoTs with a crypto economic layer, we have the ability to create new incentive models that could help the industry transform disruptively,” notes Basu. “I think this is going to be something very exciting and the reason for most people to come on-board our platform.”
Foehn also mentions that BiTA is of particular interest to Ondiflo. “It would make a lot of sense to bring BiTA into our project or to have bridges between the two. We want to develop standards that are critical to the success of this project. I think at some stage, the trucking world and the oil and gas world can basically adopt similar standards through blockchain,” he concludes.
Stay up-to-date with the latest commentary and insights on FreightTech and the impact to the markets by subscribing.