Blockchain Technology-Based Oil and Energy Platform Primed to go Live by 2018 End
Aim to Modernize Physical Energy Post-trade Processes
In the 21st-century trade world, the global energy and oil industry still relies a great deal on orthodox and outdated paperwork. The endeavor by industry giants is aimed towards a more efficient and faster alternative by utilizing digital smart contracts.
The move towards digitization would further help the companies to raze down their costs, reduce the risk of manual errors, and simplify back-end trading operations.
Platform consortium Vakt’s product development vice-president Lyon Hardgrave expects the DLT-powered oil project to go live by the end of November in the North Sea oil market. Hardgrave stated:
“In 2019 we will look at ARA barges, waterborne markets and U.S. crude pipelines. And by January we expect the first licensees will come on board, in addition to our shareholders.”
It was also learned that Vakt had received requests to consider petroleum chemicals and U.S. gas as well. Notably, shareholders in the Vakt consortium comprise of Gunvor, ABN AMRO, Koch, ING, Mercuria and Societe Generale, in addition to Shell, Equinor, and BP.
With regard to the utility of the platform, Hardgrave stated:
“This not a trading platform, nor a settlement platform – there is no cryptocurrency involved. But it is everything in between: deal recap; confirmation; contract; logistics (the really big element in all this) — and invoicing.”
Wheat Traded on the Black Sea using Blockchain Technology
In a development akin to the oil-centric energy platform, a Russian 25,000 metric ton parcel of 11.5 percent protein wheat was traded at Novorossiisk on November 12, 2018.
The developer of Cerealia Platform, which facilitated the deal, stated that it was the first blockchain-enabled wheat trade on the waters of the Black Sea.
Blockchain technology was deployed in the deal to mitigate risks and any potential conflicts that may arise by storing an irrefutable depository of all related data on the blockchain.
As a testimony to the effectiveness of the technology, Cerealia, a Swiss blockchain solutions startup stated in its press release:
“An independent auditor has reviewed all the important details of the trade from the blockchain and validated the smart contract, digital signatures, signed document, and timestamps. He also confirmed that data has been encrypted, that no other data has been stored and that all data is up to date.”
As previously reported by BTCManager on February 28, 2018, oil and energy sector has already taken its first steps to move away from paperwork towards a more efficient, faster, and transparent alternative.