A blockchain-based trading platform that could assist oil majors and trading firms to drastically reduce costs is now operational.
Known as Vakt, the platform which was created last year by a consortium consisting of Anglo-Dutch oil giant Shell and British Petroleum (BP), went live on Wednesday, according to Reuters.
Other members of the consortium include global commodity trading firm Gunvor Group, Norwegian energy firm Equinor and energy trading firms Koch Supply and Trading Mercuria Energy Group. Financial institutions such as Societe Generale, ING and ABN Amro are also part of the consortium.
While the platform will initially digitize and centralize the paperwork generated by all the parties to a deal, a financing feature will be added when it is linked to Komgo, a financing platform that was unveiled earlier in the year.
“Vakt is the logistical arm…Once a deal is executed through our book of records, it gets pushed through Vakt,” Eren Zekioglu, a senior executive at Gunvor Group, said. “The next leg is the financing and the link-up with komgo gives access to several banks.”
Initially, the Vakt platform will be restricted to contracts for five crude grades from the North Sea. Plans are afoot, however, to include oil products from northern Europe and the United States.
Vakt is not the only blockchain platform that has been developed for the oil sector in the recent past. In March this year, CCN.com reported that the energy industry had invested approximately US$300 million in developing blockchain applications.
Some of the blockchain platforms for the energy sector which have received prominent coverage include Ondiflo, an application aimed at digitizing and automating various oilfield services on the Ethereum blockchain. It was developed by blockchain software firm ConsenSys in partnership with software developer Amalto.
Specifically, the Ondiflo blockchain platform was designed to streamline and improve the order-to-cash processes in the upstream, midstream and downstream sectors of the oil industry that are still heavily reliant on paper. Benefits of the platform include faster transaction times and an enhanced overall efficiency which would help cut costs in an industry with razor-thin margins.
“As one of our first ventures into the oil and gas supply chain industry, Ondiflo will offer a solution where all operators and service companies can benefit from digitization, automation and the seamless exchange of data and immutability of their records…” the co-founder of ConsenSys, Joe Lubin, said at the time.
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Last modified: October 3, 2020 5:30 PM