Published on Friday November 6, 2020 by Mick Wilson
The value of an asset is directly related to the information that is known about its history. That’s why traceability is so incredibly important within the oil and gas industry. Assets not only need to function properly, but they also need to be financially viable. Especially now.
Caveat Emptor sometimes works against you
When buying an asset, you have a general idea of the risks involved in the purchase. There are so many factors involved that without historical data it is impossible to be aware of everything.
Sometimes the transfer of an asset without the full data could endanger the value of the asset. Under caveat emptor, the buyer is responsible for the functionality and safety of the purchased asset, in which the buyer sometimes closes the wrong deal.
Lack of traceability inhibits innovation
Of course, market forces are important in our industry. But when a lack of traceability leaves its mark on innovation within the oil and gas industry, it is currently something all companies suffer from. It is therefore important to increase traceability, for the benefit of all companies in the industry. Especially in times when the oil price is under pressure.
Buyers invest a lot of time and money in operational due diligence, especially due to a lack of traceability. Because what is a plant made of? How did this plant perform in the past?
Traceability is crucial for operational due diligence
The traceability of assets provides efficiency, increases safety, and creates transparency.
Because thanks to today’s technologies, it is extremely easy to excel in operational due diligence. By applying traceability, buyers will experience that information is always available on demand and sellers in their turn benefit from value retention.
That’s because the traceability of individual pieces of steel throughout the entire lifecycle is possible. This creates a Cradle to Grave principle, in which the specification of a piece of steel can always be confirmed, at any time.
SteelTrace believes in an efficient traceable oil and gas industry, where the value of assets is preserved for as long as possible. And we can only create that world if we can assess the safety and value of those assets in the best possible way.
With our cloud platform SteelTrace, we register all new steel products coming from the manufacturers. With the use of blockchain technology, all these products can then be traced via the platform. From production to life extension and retirement, and it’s even helping green initiatives for recycling.
We believe that buyers, sellers and users of steel benefit from this technological advancement within the steel industry. Only by registering every piece of steel, we will know that the asset we use or purchase is safe.
For more information about Operational Due Diligence: view this interesting presentation.
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