In the frigid North Sea, 90 miles off the coast of Norway, oil giant Equinor has developed one of the biggest projects in its 50-year history—a 300-ft-tall platform called Johan Sverdrup, which, when it hits peak output, will be gushing 750,000 BOPD. The field, containing an estimated 2.7 billion bbl, will flow for decades, generating copious cash for Equinor, which is 70% owned by the government. Norwegians are of two minds when it comes to oil. It’s made them among the richest people in the world, filling up the coffers of their $1.2 trillion sovereign wealth fund. But these environmentally conscious Scandinavians are also sheepish about its environmental impact. The company changed its name in 2018from Statoil to Equinor (i.e., Equity+Norway), and new CEO Anders Opedal has pledged to make it carbon-friendly as the first “net-zero” oil company by 2050.
In the interest of optimizing efficiency, Equinor has outfitted Johan Sverdrup with thousands of sensors monitoring everything from how much oil is flowing through pipelines, how fast new wells are being drilled, to how much diesel fuel the facility is consuming. All told, Johan Sverdrup’s sensors generate the equivalent of 15 high-definition video streams, which are transmitted continuously to Houston-based startup Data Gumbo, which encodes the most important data onto a proprietary, immutable blockchain ledger called GumboNet.
“We use data from the field to confirm transactions, and we store that data in the chain. Customers manage the distributed ledger,” explained Data Gumbo CEO Andrew Bruce. “No party can change any part of the transaction that provides the trust. There’s not two versions of the truth.”
The platform thus enables dozens of “smart contracts” between Equinor and its army of suppliers. “In the old days, it would take weeks to reconcile orders with records, weeks more for contractors to get paid,” Bruce said. Now a smart contract can be programmed to trigger payment to a drilling contractor when a sensor on a rig indicates that their drillbit has reached a certain depth. Contractors such as Baker Hughes “get paid sooner and for the correct work,” Bruce said. This gives Equinor leverage to negotiate for cheaper contracts and to reduce both its ranks of back-office bean counters and working capital. Equinor figures that, in its first year of operations, Johan Sverdrup saved $20 million thanks to Data Gumbo.