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Abu Dhabi Oil Joins IBM to Explore Blockchain for Supply Chain

Abu Dhabi Oil Joins IBM to Explore Blockchain for Supply Chain

The Abu Dhabi National Oil Company (ADNOC) has announced its collaboration with IBM to develop a blockchain-based supply chain system for its daily output of 3 billion barrels of oil and 10.5 cubic feet of natural gas.

The announcement was made at the recent World Energy Capital Assembly event in London, where ADNOC Digital Unit Manager Abdul Nasser Al Mughairbi said, “We believe this could be the first application of blockchain in oil and gas production accounting anywhere in the world.”

The pilot project as reported in the release will involve the development of an automated system to integrate financial accountability of oil and gas production throughout the “full value chain”. This implies that the corporation will be able to track transactions and volumes of oil produced within its system.

The objective of the collaboration is to enable ADNOC to explore blockchain potentials in improving cost and time efficiency between operating companies. According to the state-owned oil company, the new technology will shave off valuable time for ADNOC operating companies when executing transactions.

ADNOC’s adoption of blockchain will improve cost tracking activities of oil and gas products, as well as by-products such as condensates, natural gas liquid and sulphur, which are “exchanged between ADNOC’s operating companies and also exported to customers overseas”.

IBM’s Chemicals and Petroleum Solutions VP Zahid Habib said, “With this pilot, ADNOC takes a massive leap forward in asset provenance and asset financials… reinvent [its] hydrocarbon value chain… accelerating ADNOC towards their 2030 vision”, which includes cost efficiency.

ADNOC is one of the world’s leading diversified energy and petrochemicals groups and according to Oil & Gas Journal, it holds a major portion of the seventh-largest oil reserves of the world located in the UAE.

ADNOC CEO HE Dr Sultan Al Jaber, at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), said, “… the world is on the verge of an era of unprecedented prosperity. This will be driven, he said, by rapid advances in technology and a global middle class, which will grow to five billion people by 2030.”

Despite the cryptocurrency market downturn this year, blockchain development with the UAE industries continues in a steadfast manner.

Last week, Abu Dhabi financial institutions completed Phase 1 of blockchain e-KYC aimed at testing the operational and technological values of a blockchain-based KYC system while adapting its infrastructure to current businesses with sustainable models.

Not too far back, the UAE Bank performed its first Sharia-compliant bonds transaction on the blockchain, paving the way for innovative digitized Islamic Sukuk.


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South Korea Adopts Blockchain for Beef Supply Chain

South Korea has further expanded blockchain infrastructure and will now be utilizing the technology in a beef supply chain pilot in order to create transparency for consumers.


First reported by local media outlet Yonhap News, the project will be conducted by the Ministry of Agriculture, Food and Rural Affairs (MAFRA), as well as the Ministry of Science and ICT. It will be piloted in North Jeolla Province by December and after a trial period, it will be officially launched in January 2019 in cattle farms and slaughterhouses.

Like many supply chain systems that are blockchain-based, accountability, transparency, and immutability are core characteristics from which industries such as agriculture will benefit from. Additionally, the upgraded system is anticipated to the reduce costs, time-consumption, and risk of fraud that presently looms over the paper-based reporting system that tracks cattle from birth, slaughter, packaging and distribution.

According to the joint press release from MAFRA and the Ministry of Science and ICT the blockchain platform, all related information and certificates will be stored, enhancing efficiency and credibility.

Blockchain adoption

South Korea is bustling with blockchain projects that are being introduced into many sectors; most recently, the nation’s largest power provider KEPCO unveiled plans to transform energy infrastructure using by blockchain and other technologies to develop microgrids. In doing so, they would allow for electricity to trade across microgrids which is seen as a solution to energy supply issues and to “promote eco-friendly energy practices”.

Furthermore, plans to upgrade e-government services and utilize blockchain for hospital patient records are underway. These are just the tip of the iceberg for a nation that continuously announces budget increases for blockchain and places blockchain within extremely well-funded innovation plans.


For farming, blockchain technologies have found themselves as favorable entries into the sector and have also come in numerous nuanced forms with the typical benefits still intact.

One pilot project which was recently announced in the United States is a supply chain solution that utilizes both blockchain technology and the Internet of Things (IoT) to trace and track dairy products, improving connections between farmers and end customers and increasing transparency and product freshness, an overall upgrade to the system.

Oxfam International is also on board with blockchain for rice farmers in Cambodia; the project being trialed is designed to create a fair pricing ecosystem among rice farmers. It sets in place digitized contracts that carry numerous essential data inputs as well as establishing appropriate contracts with clients, reducing the risk of exploitation and lowering financial pressures for farmers.


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Oxfam Launches Blockchain-Based Rice Supply Chain

Advocates for poverty eradication Oxfam announced yesterday that it has launched its rice supply chain management platform BlocRice on the blockchain.

BlocRice, introduced in April, started out as a pilot program aiming to enhance the negotiation powers of organic rice farmers in Cambodia. The project was the first of its kind in the region, allowing farmers to interact with key players along the rice supply chain.

Country director of Oxfam Solinn Lim stated that “the aim is for BlocRice to gain acknowledgment from all relevant actors in the supply chain”.

With six actors identified in the rice value chain – the organic farmer, the agricultural cooperative, the export company, the import company (Europe), retailers, and consumers – Solinn envisages BlocRice as an ecosystem of farmers with a collective bargaining power. She said, “BlocRice will give farmers collective bargaining power since agricultural cooperatives will be parties to the contracts.”

Smart contracts will be the core technology to be leveraged upon here, which will be used to establish transparency and a coherent working protocol among farmers, exporters, and buyers.

Solinn added that all stakeholders would share a digital contract, sharing information on blockchain throughout the process, from planting to manufacture of rice crackers.

As records from 2017 reveal, Cambodian rice farmers are currently the ninth largest exporters of rice, however, applying blockchain technology could possibly improve the welfare of small-scale farmers, as well as scale up export activities of rice and other agricultural produce in Cambodia.

Song Saran, CEO of Amru Rice, an exporter in the value chain, commented on the BlocRice project: “…if it proves successful, however, it may be expanded to include all the communities currently working with Amru Rice and new products, such as organic cassava, pepper and cashew nuts.”

Further, interest from the Cambodians shows positive reception to the idea of contract farming and a desire for “financial literacy”.


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Oxfam to Trial Blockchain to Improve Pricing for Cambodian Rice Farmers

Oxfam International is piloting a blockchain-based farming project that aims to ensure that rice farmers get a fair price for their produce.

With 50 organic rice farmers already on board, the Blockchain for Livelihoods from Organic Cambodian Rice project, also dubbed Blocrice, Oxfam intends to introduce the program across the country.

Blockchain boost

Currently, the technology has found itself being trialed in Cambodia’s northern province of Preah Vihear. According to the Oxfam website, it will “contract farming between farmers’ cooperatives and exporters, rice cracker makers and other buyers. Contracts predefine the primary purchase price, trade volume, transportation method and other conditions.”

The pilot will digitize and register these contracts on the blockchain platform, details such as primary purchase price, trade volume and transportation method are recorded, with cashless payments made to rice farmers through bank accounts for traceability.

Solinn Lim, Country Director of Oxfam in Cambodia, believes that with Blocrice, farmers gain “collective bargaining power”. Lim adds: “The sheer fact of being registered as an actor on the blockchain platform implies that people matter, Blocrice will give them a platform to empower themselves.”

Oxfam estimates that 60% of Cambodia’s workforce is employed in the agriculture industry, explaining that many of the low-income farmers and some laborers do not have the appropriate contracts with their clients. Furthermore, lack of market price knowledge and high-interest loans are putting producers under a great deal of pressure to sell produce and clear debt.

On the up

It’s not a fantastic situation for a key industry within Cambodia. That said, over the past couple of decades, rice exports have been increasing significantly. Since 2013, Cambodian rice exports have risen by 32.5%; this is according to World’s Top Exports (WTEx), who also report Cambodia as the ninth largest exporter of rice in 2017, selling USD 331.1 million worth.

The 50 farmers who are part of the pilot are registering their profiles as well as uploading key data such as expected yields and planting areas. The project is taking place through March 2019 during the rainy season, which is the country’s prime season to harvest and sell rice.

It’s an exciting prospect for the country. Blocrice pilot participant Kann Kunthy, Managing Director of rice exporter AmruRice said, “We expect to bring traceability, transparency, financial literacy and best practices [to] contract farming in Cambodia.”

The project will be targeting the European market which accounts for almost half of Cambodia’s rice exports. Thanks to the EU’s preferential tariff exemption, Cambodian rice exports have benefited greatly.

However, the European Commission has concerns regarding certain human rights issues that occurred in the run-up to a July election, which may cause Cambodia to be removed from the special tariff.

With any luck, the implementation of the blockchain product could ease the worries of the EU and reinvigorate the rice export industry entirely. Furthermore, the project intends to expand into other provinces and exports including cassava, cashew nuts, maize and pepper.


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UN Publishes White Paper on Supply Chain Blockchain Applications

The United Nations Center For Trade Facilitation and Electronic Business’s (UN/CEFACT) blockchain project team recently published a ‘Blockchain White Paper’ for public review, describing technical applications for blockchain in supply chains. The paper describes an intent to use blockchain technology to support supply chain interoperability, efficiency, and integrity.

Since the 1980s, UN/CEFACT standards have played a fundamental role in facilitating trade and making economic supply chains more efficient. The Blockchain White Paper analyzes how blockchain technology can be maximized to further the organization’s mission.

It says the UN/CEFACT will focus on a few aspects of blockchain technology including smart contracts, electronic notary and decentralized process coordination. The ability of blockchains to transmit money with cryptocurrency and to facilitate digital voting will not be focused on, since the primary goal of the paper is to see how blockchain could improve supply chains.

The paper states that blockchain could improve supply chains by moving away from traditional paper record systems and replacing it with a digital trustless system. If the UN/CEFACT were to implement blockchain technology, it could standardize supply chain records into one database rather than the many different databases there are today, and the ledger would be immutable, meaning that no one could go in and manipulate the data in order to commit fraud. This would make a blockchain ledger solution for supply chains more reputable and credible than older systems.

The UN/CEFACT says that many different types of supply chain data can be transmitted through a blockchain ledger, including consignment and shipping, invoicing, insurance, and movements through international customs.

On the downside, blockchain doesn’t solve the supply chain interoperability problem, and the UN/CEFACT says it must be careful to choose the right blockchain technology since not all blockchains are created equal. Indeed, some cryptocurrency blockchains have been compromised recently by 51% attacks.

According to the UN/CEFACT Blockchain White Paper, more research and development is needed to ascertain the potential of blockchain to facilitate international trade, and it is suggested that blockchain experts from member nations work together to develop new blockchain technology that could be implemented for supply chains.


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