Three major oil companies have partnered with large banks and trading houses to launch Vakt, a blockchain driven platform for energy commodity trading. The partnership was reported by the independent news agency this week and involves Shell, BP, and Equinor.
Major Partners Make Up Vakt
The banks involved include ING, ABN Amro, and Societe Generale. They are joined by trading houses Mercuria, Koch Supply & Trading, and Gunvor. The blockchain solution was first announced in November 2017.
It will enable significant industry players to migrate from cumbersome paperwork to smart contracts. Consequently, this will help reduce the time spent on operations making trading more efficient.
Lyon Hardgrave, the product vice president of Vakt, while participating in the S&P Global Platts Digital Commodities Summit in London on Monday, said the platform would be launching by the end of November.
He also mentioned Vakt’s plans in 2019:
“In 2019 we will look at ARA barges, waterborne markets, and US crude pipelines. And by January we expect the first licensees will come on board, in addition to our shareholders.”
The vice president also added that the platform was receiving requests to have a look at petrochemicals and U.S. gas. He further stressed that once the platform was fully operational, it will help cut up to 40 percent of costs associated with post-trade resolution.
Interestingly, a poll conducted throughout the summit by S&P Global Platts found that the majority of the participants believe that blockchain applications will reach mass retail market adoption by 2025.
Previously, S&P Global Platts has trailed blockchain solutions for the oil industry. Earlier this year in February, the firm announced that it was launching a decentralized platform that would “allow market participants to submit weekly inventory oil storage data.” The platform was deployed in UAE’s Fujairah Oil Industry Zone (FOIZ).
However, Vakt will not be the first platform of its kind. Already there is another similar platform in Switzerland dubbed Komgo SA. Its also a joint venture of leading energy firms, trading firms, and major global banks. Its primary objective is to oversee a blockchain based platform that finances the trading of commodities.
Basil has three years of freelance experience writing on disruptive technologies. He focuses on breaking news and education pieces; helping to spread the gospel of Blockchain. He hopes to have his own blockchain company one day; helping the world through its innovative ledger technology.