Launch on the oil market in the North Sea
Water markets are targeted
Cost efficiency of 40% expected
A project sponsored by BP, Shell and Equinor to modernize post-trade physical energy processes using blockchain technology is ready for commercialization by the end of the year, the Vakt platform consortium announced on Monday at S & P Global Platts Digital Commodities Summit in London.
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The platform aims to help companies to abandon the traditional and cumbersome paper-based negotiation contracts and documentation of operations for digital smart contracts. This would reduce costs, reduce the risk of errors and make back-end trading transactions more reliable and efficient.
"We expect to go to live in the North Sea oil market at the end of November," said Vakt product development vice president, Lyon Hardgrave.
"In 2019 we will look at ARA barges, US water and pipeline markets, and by January we expect the first licensees to join, in addition to our shareholders," said Hardgrave.
Waterborne markets have been a key target because of the need for flexibility, but Vakt has also received requests to look at American pet and gas, Hardgrave told Platts.
In addition to BP, Shell and Equinor, the shareholders of the Vakt consortium include Gunvor, ABN AMRO, Koch, ING, Mercuria and Société Générale.
S & P Global Platts explains the technology, examines the projects and analyzes the challenges and opportunities in which the blockchain enters a phase of critical development.
Licensees who pay to use the platform in the future can hope for about 40% cost savings in post-trade resolution, Hardgrave said, eliminating data errors and accelerating processes, freeing up time and capital.
"This is not a trading platform, nor a settlement platform – no cryptocurrency is involved, but it's all in between: summary of the business, confirmation, contract, logistics (the really great element in all this ) – and billing, "he said.
The trade and settlement elements have been characterized as part of the "future potential scope" in digital processes, but Hardgrave has seen significant barriers to settlement and only limited value in the use of blockchains in the transaction itself.
Noting that the blockchain was still an immature technology, Vakt's CTO Adam Vile said it was confined to the platform "to writing the resolved truth: there is a whole stack of standard technology above the blockchain – we have built a business solution with blockchain supporting it ".
A poll of the summit audience showed that the vast majority of delegates expected blockchain applications to have reached the retail market by 2025.
Opening the conference, David Shrier of the Said Business School of the University of Oxford said he expects the digitalization of entire raw materials ecosystems from seven to ten years, but warned that consistent regulation of the sector would require "10 years or never again ".
– Henry Edwardes-Evans, [email protected]
– Modified by Jonathan Loades-Carter, [email protected]