Oil industry giants BP and Shell are among a group of business entities plotting the launch of a Blockchain platform that will automate post-trade processes in the energy industry this year. This news was revealed by VAKT Global, a consortium that is building the platform, at a digital commodities summit hosted by S&P Global Platts last Monday. This move will help oil companies embrace smart contracts while shelving paper-based documentation. The platform will assist in reducing the risk of errors, cutting costs, and making post-trade processes much more efficient. The platform will be a secure, real-time, blockchain based platform to manage physical and energy transactions.
The vice president of product development at VAKT, Lyon Hardgrave, confirmed that they expected the platform to be up and running by the end of this month in the North Sea oil market. He also confirmed that VAKT was planning to have a look at waterborne markets, US crude pipelines and ARA barges in 2019. According to Hardgrave, the first licenses are expected to be on board by January 2019. VAKT global stated earlier in the week, that the blockchain platform would be run like a new venture by the consortium members, as an independent entity. Regulatory approvals for the platform are still being worked on at the moment.
Apart from Shell and BP, other entities working on the platform launch are; Statoil, a Norwegian energy company, banks such as ABN, Amro, ING, and Societe Generale, as well as trading houses among them being; Mercuria, Koch Supply and Trading and also Gunvor. Hardgrave added that “This, not a trading platform, nor a settlement platform – there is no crypto-currency involved. But it is everything in between: deal recap; confirmation; contract; logistics (the really big element in all this) – and invoicing.”
