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Blockchain and Internet-of-Things (IoT) technologies being successfully tested in logistics at Gazprom Neft

Specialists at Gazprom Neft’s Offshore Projects Division, together with specialists from the company’s procurement division, Gazpromneft-Snabzheniye, have begun testing blockchain* and “Internet of Things (IoT)” technologies in logistics and procurement management.**

Section isolation valves recently procured for Gazpromneft Shelf have been fitted with radio frequency identification (RFID) tags and GPS sensors, resulting in a document — containing all information on the delivery — being produced on the RFID being read following shipment from production facilities at Veliky Novgorod. The GPS receiver subsequently allowed full tracking of the consignment to storage facilities in Murmansk, as well as monitoring its speed in transit, and the number and frequency of stops. All data received from the devices was confirmed under a “smart contract”,*** and reflected in the blockchain. Subsequent information on warehousing and transportation — from the goods being delivered to the warehouse, their transportation to the loading pier (embarkation quay) and their onward delivery to the Prirazlomnaya offshore platform in the Kara Sea — was similarly relayed. Blockchain technology ensured indissoluble connection to the physical consignment, and throughout all related processes and document flow, as well as allowing all participants in the process access to accurate — and encrypted — information.

The successful implementation of this pilot project has confirmed the possibility of using blockchain technology in supply chain management. Gazprom Neft is considering the outlook for the further use of the potential inherent in blockchain technology, and disseminating this in line with experience gained.

Abdulla Karaev, Head of the Directorate for Procurement and Capital Construction, Gazprom Neft PJSC, commented: “Blockchain technology in supply chain management and logistics will create an ecosystem allowing collaboration between all participants in the process — producers, inspectors, logistics operators, warehousing and the consumer. We see considerable potential in its further development and application.”

Notes for editors

* “Blockchain” refers to a continuously growing distributed database for storing and distributing information. No transactions recorded in a blockchain can be deleted or changed.

** The “Internet of Things (IoT)” refers to a network of devices connected to the Internet and capable of data interchange with both the user and each other. The use of IoT technologies means consignments can, with the use of various devices, be integrated with real-time data.

*** A “smart contract” is an algorithm which remotely initiates a blockchain on certain conditions being met. As a result of a smart contract being initiated, all parties in the blockchain are verified: on which basis, all data and history relating to logistics operations can be collated holistically. All parties involved in the procurement process have access to encrypted information, and all contracting parties — and enabled technologies — can engage in electronic data interchange.