[ad_1]
Shell and BP are now using a blockchain-based trading platform for crude oil, which they hope will solve commercial and regulatory inefficiencies.
Shell & BP Hope Blockchain will solve inefficiencies
Vakt is the first on the market of several pilot projects that have been under development, such as Bitcoinist reported in January 2018. It is kindly offered by a consortium of oil majors, global energy dealers and investment banks. These include BP, Shell, Mercuria Energy Group, ABN Amro, ING and Gunvor Group
Initially, Vakt is only accessible by these companies and is limited to contracts for five types of North Sea crude oil. These grades set the Brent benchmark for oil prices worldwide.
The platform will open access to third parties in January next year. In addition, the inclusion of US pipelines and European refined products such as petrol is scheduled for the beginning of 2019.
The reason for this interest from this sector is the belief that blockchain can reduce costs and increase profit margins by eliminating intermediaries. The industry hopes that it will also increase transparency and security and resolve commercial and regulatory inefficiencies.
Vakt realizes this through the digitalization and centralization of the mountain of bureaucratic practices previously requested by each party to a contract.
"Vakt is the logistic arm … Once an agreement is executed through our record book, it is pushed through Vakt.The next stage is financing," said Gunren Group's Eren Zekioglu.
Swiss account
The loan, including digital letters of credit, will be provided with a future link up to the Geneva financial platform, Komgo.
Komgo should be in operation before the end of the year and will aim to trade on a full range of products, from oil to wheat. The head of Shell's trading, Andrew Smith, had this to say about the project:
Collaboration with our colleagues and some of the industry's key players is the best way to combine market expertise and reach the scale needed to start a digital transaction platform that could transform the way we all do business.
Bitcoinist reported this project for the first time in January, although at the time it was two separate projects. Since then, the two teams have come together and Vakt is the result of their work.
Of course, on a much smaller scale, the United Kingdom has exchanged energy on the blockchain from April of this year, as Bitcoinist reported. The condominiums exchanged solar energy in a Hackney residential complex in London, through Verv's "renewable energy exchange platform".
Will blockchain technology be at the height of its promises for the monitoring and trading of raw materials? Share your thoughts below!
Images courtesy of Shutterstock
