Most investors are already aware of bitcoin's meteoric rise from $900 to $19,000 last year.
But what the majority of investors have missed out on is the tidal wave of stocks that have soared from the implementation of bitcoin’s secret tech: the blockchain.
And this tech has finally arrived at the door of Big Oil, promising to reshape the most important industry in the world.
With OPEC and U.S. shale producers striving for dominance in an oil war that has raged for years, those innovators who can implement this game-changing tech first will undoubtedly gain the upper hand, rewarding their shareholders handsomely along the way.
Just as the shale boom transformed the face of the oil industry, blockchain is promising to usher in a new age of more efficient and cheaper production. From oil trading, to oilfield services and supply chain management – the industry will never be the same.
Early investors are already reaping the benefits of this breakthrough, and in the world’s most important industry, it is these 5 companies that are leading the oil tech race.
#1 Royal Dutch Shell (NYSE: RDS.A)
Royal Dutch Shell is at the forefront of a pack of supermajors embracing blockchain to maximize gains in 2018, long with partners BP, Statoil, and Mercuria, among others.
This heavy-hitting coalition are investing in the creation of a new blockchain-based digital platform to revolutionize how energy commodities are traded in the industry.
Thanks to blockchain, oil and gas companies will be able to ditch the mountains of inefficient and antiquated paperwork involved in traditional energy trading and replace them with e-docs and smart contracts.
In addition to cutting out the paper trail and saving more than a few trees, the industry will simultaneously be bolstering its risk management by creating super-accurate time stamping and improved cyber-security. Smarter, better, faster, stronger, and safer.
While this all-star group is not the first to try to implement blockchain on a wide scale in energy trading, this time it’s a near-guaranteed success with the kind of name recognition and cash flow brought to the table by these supermajors ($17 billion in annual free cash flow from Shell alone).
The new system is nearly ready for launch, waiting for regulatory approval, making now the perfect moment to get in on the ground floor. For long-term investors it’s a no-brainer--Shell’s dividend payouts are pushing $16 billion and their Q3 earnings have exceeded expectations.
#2 Petroteq Energy Inc. (TSX:PQE.V; OTC:PQEFF)
Canadian Petroteq is taking a more complex and diversified approach to new technologies.
Most notably, the company is pioneering a new, greener approach to the dirty process of oil sands extraction, a major issue in the Canadian oil industry that is rapidly gaining a bad reputation with an ever more eco-conscious consumer base.
The company’s researchers have come up with a revolutionary Liquid Extraction System that can extract oil from Canadian and foreign oil sands with minimal environmental collateral damage and at an impressively low production cost of a projected $22 per barrel.
The innovative technology is capable of extracting over 99 percent of all hydrocarbons in the sand while generating zero greenhouse gases and without the use of high temperatures and pressure. This will allow for great publicity, favorable public opinion, and will even create clean sand available for resale to fracking or construction industries.
The company’s management has plans to license this (literally) groundbreaking technology across the globe, catalyzing the extraction of the more than a trillion barrels of oil sitting in the sands of Utah, Colorado, and Wyoming, not to mention the tens of trillions of barrels located around the world.
Petroteq is prepared to capitalize on their own extraction revolution, having purchased the rights to 87 million barrels of oil equivalent in Utah’s Asphalt Ridge in a $10 million deal. It will also be a gamechanger in Canada, where the oil sands have been historically pricey, dirty, and difficult to extract from.
Next to its unique oil extraction process, the company is also incorporating blockchain technology into their corporate structure. They’re currently in the process of authorizing a deal with First Bitcoin Capital, specialists in cryptocurrency and BlockChain development.
They will license the blockchain built by IBM, tweaking it to be industry-specific, creating the opportunity to make a free, open-source blockchain for massive oil data. It would be accessible in all factions of the industry, upstream and down, including everything from exactly how much oil an individual entity purchased at what price and how long delivery took, to where and when it was drilled and how it was refined.
Knowledge is power, and as Petroteq secures heavy-hitting investors across the world, they are ramping up to be very powerful indeed.
#3 Nvidia (NYSE:NVDA)
Markets can be explosive, and no one knows it better than tech-industry darling Nvidia, which has drawn sceptics and worshippers alike as its stock skyrocketed 130 percent over the last year to $213 a share and has landed the accolade of top performer in the S&P 500.
Nvidia’s groundbreaking technologies are shaking things up in arenas as diverse as gaming, cryptocurrency, and automotive.
The U.S.-based company is expecting huge profits this year based on their involvement with Nintendo Switch, but the gaming industry is just the beginning of where their hot-ticket chip technology reaches. They’re used in self-driving vehicle projects and Amazon’s Echo speaker as well and will soon be major players in artificial intelligence developments, with 6 of the 10 most efficient supercomputers in the world.
Nvidia’s products are in such high demand that electric stores specializing in gaming hardware are running dry. There are even opportunistic entrepreneurs pre-ordering Nvidia’s Graphics Processing Units (GPUs) and reselling them for a premium. Why? Cryptocurrency mining. The crypo-craze has spiraled out of control in recent months, and Nvidia’s products are in high demand.
As the crypto-trend continues to gain speed, Nvidia and its rivals are all sure to earn a pretty penny on hardware sales. Investors have taken note, and Nvidia’s sales are reaching all-time highs. But the smart money knows this is only the beginning for this tech giant. If cryptocurrencies live up to the hype, there’s a lot more upside to be realized.
#4 BP (NYSE: BP)
Even the most major mainstays of the oil industry have had to accept that the days of $100 oil are gone, and traditional methods have gone along with them.
Any company caught resting on its laurels will be quickly left behind. This includes old industry faithful BP, who have also accepted the changing of the tides and turned toward robots, AI and blockchain to stay competitive in this unstable economic climate.
BP’s chief of upstream operations, Bernard Looney recently said that the company is looking to double down on technology. “The combined impact of supercomputing and artificial intelligence is helping us see our world through new eyes. We can uncover resources. We can compare wells instantly. We can pinpoint corrosion risks by applying machine learning to 40 years’ worth of data. Who would have thought 10 years ago that Upstream folks would come to conferences like this to compare algorithms and petaflops?”
The alarm clock that woke the industry up to the potential of digital technology was the 2014 price crash. The entire industry started looking or smart ways to save costs, lower break-even costs per barrel and improve efficiency company wide.
Much bigger than big data, drones and AI are clever blockchain solutions. The oil industry is the perfect sector for a wide-scale blockchain disruption, with an incredibly intricate system and such an innumerable number of players involved along the path from the drill to the pump.
Together with Wien Energie and Eni Trading and Shipping, BP is taking the initiative to bring the oil industry into the future, having already completed 12-week pilot blockchain program. The program was a success, and BP is now courting involvement from other supermajors including Shell and Statoil.
#5 Schlumberger (NYSE: SLB)
Schlumberger is no stranger to pioneering new technologies, and it is continuing this legacy with new developments in cloud technology – focusing on its grand potential for flexibility and scalability, which will lead to unprecedented efficiency.
The cloud is just one of many tech innovations that Schlumberger may implement in the coming year.
They’re ultimately aiming for a “digital technology ecosystem”, from wide-scale system reorganization with hyper-customized interfaces down to fully automated and integrated rig hardware on the ground.
Schlumberger has joined with Google for their Cloud IoT Core, a fully managed cloud service that connects and manages IoT devices at scale. Several companies wanted in at the ground floor and Schlumberger made sure they were one of them.
While this oil giant has struggled of late, the long-term trajectory for Schlumberger is looking great as it continues to embrace tech in a market that is seeing investors return and opportunities boom. When the oil tech boom does hit, it is likely that this giant will be at the forefront, most notably with its cloud-based technologies and its partnerships with giants such as google.
With the recent sell off, multiple analysts have Schlumberger down as a buy.
More companies transforming the oil and gas industry:
Tourmaline Oil Corp (TSX:TOU) is another Canadian resource producer focusing on exploration, production, development and acquisition within Western Canadian Sedimentary Basin. The company is in possession of an extensive undeveloped land position with long-term growth opportunities and a large multi-year drilling inventory.
Tourmaline’s strong leadership make the company a promising pick for investors looking to take advantage of the tremendous Canadian oil opportunities which are due for a strong rebound as oil prices inch higher.
Suncor Energy (TSX:SU): Suncor's Oil Sands operations cash operating costs per barrel are maintained at $23.00 - $26.00 despite the five-year planned maintenance turnaround at Upgrader 1. Some one-quarter of the company’s 2018 capital spending program is allocated towards upstream growth projects in the Oil Sands and E&P businesses.
As one of the biggest names in energy, Suncor has adopted a number of high tech solutions for finding, pumping, storing, and delivering its resources.
If the next shale boom truly is to be in the oil sands then giants like Suncor is sure to do well out of it. While many of the oil majors have given up on oil sands production – those who focus on technological advancements in the area have a great long-term outlook.
Encana Corporation (TSX:ECA): Calgary-based Encana saw October oil production recover to more than 325,000 oil-equivalent barrels per day after matching analyst expectations at just 284,000 boe/d in the third quarter.
The oil market looks to be recovering and now appears to be the perfect time to get in on the rebound with companies like Encana that are seeing a tangible improvement in performance. There is very much a future in oil stocks and plenty of value to be found amongst the survivors in Canada.
Husky Energy Inc (TSX:HSE): This integrated oil and gas company out of Western Canada also has stakes in the South China Sea and the Atlantic. While shares have dropped this year, they’ve started to rally since the second quarter.
The dip in stock price in the third quarter certainly looks to be bottoming out now, with the Royal Bank of Canada increasing its price target to $17 and energy markets looking to be at a turning point.
Enbridge, Inc (TSX:ENB), based in Canada’s oil sands capital Alberta, is an energy delivery company focusing on transportation, distribution, and generation of energy. Operating in the United States and Canada, Enbridge owns and operates the largest natural gas distribution network in Canada and the longest crude oil transportation system in the world. Founded in 1949, investors can feel confident in Enbridge’s experience and market know-how.
Though not strictly dealing in commodities, Enbridge’s diversified assets and connections to a variety of industries position the company as solidified player in many Canadian investors’ portfolio.
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This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include that PETROTEQ will be able to produce oil as currently scheduled, at the rates of production announced and at the targeted low prices from its Utah property; that PETROTEQ’s technology results in much lower environmental damage; that PETROTEQ will successfully develop a blockchain supply chain solution for the oil industry; that it will have customers and contracts for its supply chain technology; that oil will be as much in demand in future as currently expected; that PETROTEQ’s technology is protected by patents and that it doesn’t infringe on intellectual property rights of others; that PETROTEQ will find licensees for its technology and that it can patent its technology in many countries; that PETROTEQ’s technology will work as well as expected; that blockchain technology will help PETROTEQ achieve its goals; and that PETROTEQ will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that the Company’s patents and other technology protection are not valid, patents may not be granted in countries where PETROTEQ wants to license its technology; production of oil may not be cost effective as expected, technology development costs may be much higher than expected, there may be construction delays and cost overruns at the production plants, PETROTEQ may not raise sufficient funds to carry out its plans, changing costs for extraction and processing; technological results based on current data that may change with more detailed information or testing; blockchain technology may not be developed to be as useful as expected and PETROTEQ may not achieve its business plans; competitors may offer better technology; and despite the current expected viability of its projects, that the oil cannot be economically produced with its technology. Currently, PETROTEQ has no revenues.
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