View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
November 22, 2018updated 23 Dec 2019 11:28am

PermianChain launches blockchain network for oil and gas sector

Canadian blockchain solutions provider PermianChain Technologies has launched the Permian Token (XPR), which will underpin all the holding rights to the value of potential but undeveloped oil and gas reserves.

Canadian blockchain solutions provider PermianChain Technologies has launched the Permian Token (XPR), which will underpin all the holding rights to the value of potential but undeveloped oil and gas reserves.

The objective of the new crypto asset-class is to eliminate the layers of bureaucracy while significantly reducing broker and administrative fees.

XPR is also expected to minimise delays and improve investment efficiency, thereby attracting several new investors to the oil and gas sector.

Through the new system, PermianChain aims to reduce the amount of complexity currently experienced in trading oil and gas.

The company stressed the complex nature of the agreements and the difficulty in transfers without substantial cost additions, adding that the existing system involves several steps before oil and gas reaches downstream from upstream through mid-stream.

“The Permian Token helps public organisations and private sector oil companies use them more efficiently.”

The inefficiencies could discourage potential investors from investing in the oil and gas market and subsequently reduce the sector’s potential liquidity and value, PermianChain stated.

PermianChain developed the Permian Token’s smart contract system as a solution to replace these complex agreements.

The solution is based on the PermianChain, which is a blockchain network currently being developed by the company.

PermianChain Technologies co-founder Mohamed El-Masri said: “Many private oil and gas opportunities are structured with an upfront fee due to their exclusivity and inaccessibility.

“Advisers and brokers take a proportion of the profit simply for placing investors’ money in the deal, which means charging higher investment costs to cover administrative and brokerage tasks, rather than helping the project itself.

“It also means that the offering company’s incentive is often to fill the deal quickly to protect their balance sheets in the short-term. There are currently over 1.6 trillion barrels of potential oil reserves globally. The Permian Token helps public organisations and private sector oil companies use them more efficiently.”

The Permian Token will reduce investors’ liquidity issues by creating a tradable crypto-asset on a permission-access trust-protocol.

Furthermore, the smart contracts are expected to eliminate the administrative and brokerage burden to a large extent.

PermianChain expects to list around 250 million barrels of potential oil and gas reserves on the blockchain network.

Related Companies

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Offshore Technology