BP, Shell, and Equinor are some of the biggest names in oil, and they decided to make a change in their industry. Together, they are working with trading houses and major banks in an effort to launch a new platform for energy commodity trading, which they have decided to call “Vakt.” The news of the launch was reported by S&P Global Platts on November 12th.
Along with the three aforementioned oil companies, Vakt also includes ABN Amro, ING, and Societe Generale as their banks. The trading houses include Gunvor, Koch Supply % Trading, and Mercuria. The solution involving blockchain technology was first announced this time last year, and it will hopefully move the industry’s various players from cumbersome paperwork to smart contracts. With this implementation, it will hopefully reduce the time spent on these tedious operations and made the whole process more competent.
Lyon Hardgrave, who is the vice president for product development at Vakt, recently participated at the S&P Global Platts Digital Commodities Summit in London, which is going on today. Speaking at the event, he added that this platform plans to launch in the North Sea oil market before the month is over. Regarding the future, he noted,
“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.”
With all of this success, Hardgrave is seeing some interest from petrochemicals and U.S. gas industries. Once the blockchain-based platform is operational, it is possible that the work could reduce post-trade resolution costs by up to 40%. After taking a poll at the summit, S&P Global Platts discovered that the majority of the participants believe that the blockchain applications should have mass adoption in the retail market by 2025.
In the past, S&P Global Platts has worked on other trials for blockchain in the oil industry. In February this year, they said that their upcoming decentralized platform would “allow market participants to submit weekly inventory oil storage data.” This platform for oil storage tracking was already launched by the UAE’s Fujairah Oil Industry Zone (FOIZ).
Switzerland has a platform that is much like Vakt already, which is called komgo SA. The platform consists of major global banks, trading firms, and an energy company that take responsibility for monitoring the financing involved with trading commodities. TheNextWeb even notes that “the initiatives share some of the same participants, including ABN AMRO, ING, Koch Supply & Trading, Mercuria, Shell, and Societe Generale.”