Yesterday, the
OOC Oil & Gas Blockchain Consortium announced it completed a trial for blockchain-based authorization for expenditure (AFE) balloting in collaboration with Canadian tech firm
GuildOne. The alliance consists of several major oil companies including Chevron, ExxonMobil and Shell.
AFE balloting is used to approve large expenditures related to exploration, development and production. Most exploration projects are joint ventures which makes blockchain a good match for sharing. Depending on how much of the expenditure a participant agrees to bear, AFE balloting determines the final interest of parties in a joint venture project.
The legacy AFE balloting process is manual and largely paper-based, where an operator sends ballots via registered mail or courier to invite prospective joint venture partners to participate in new capital projects. This process may take months to complete. Owing to a paper trail, it becomes difficult to calculate working interests of partners which may lead to delays and disputes.
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