Major Oil Firms, Banks Partner to Launch Blockchain Platform for Energy Commodity Trading

Major oil companies BP, Shell, and Equinor have united with large banks and trading houses to launch a blockchain-driven platform Vakt for energy commodity trading.

The partnership was reported by independent news agency covering energy and commodities markets S&P Global Platts Monday, Nov. 12.

Apart from the three oil companies mentioned above, Vakt includes banks ABN Amro, ING, and Societe Generale, along with trading houses Gunvor, Koch Supply & Trading, and Mercuria.

The blockchain solution, first announced in November 2017, will enable major industry players to move from "Cumbersome" paperwork to smart contracts, thereby helping to reduce time spent on operations and make trading more efficient.

While participating in the S&P Global Platts Digital Commodities Summit in London today, Nov. 12, Lyon Hardgrave, product development vice president of Vakt, stated that the platform will launch by the end of November in the North Sea oil market.

"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."

S&P Global Platts has conducted a poll throughout the summit, finding that a vast majority of participants expect blockchain applications to have reached mass retail market adoption by 2025.

S&P Global Platts itself has previously trialed blockchain solutions for oil industry.

In February 2018, the company announced it was launching a decentralized platform that would "Allow market participants to submit weekly inventory oil storage data." The platform to track oil storage was deployed in the UAE's Fujairah Oil Industry Zone.

The initiatives share some of the same participants, including ABN AMRO, ING, Koch Supply & Trading, Mercuria, Shell, and Societe Generale.