By Sofiko Abeslamidze
Updated
3 min read
At the helm of an international oil consortium, Shell and BP set up a live blockchain-based platform to secure effective post-trade processes.
The cutting-edge blockchain technology is being widely adopted not only by passionate cryptocurrency miners. The diverse applicability of blockchain has received many praises from money-full industries that put immutability and transparency in the first place.
The blockchain is known for an explicit ability to preserve original data from any sort of involvement no matter who is trying to tamper with a record.
The underlying concept is rather simple — once something is being put into the blockchain it remains seized until after the initial terms of a deal will be executed and this something will be unlocked. This is called a smart contract.
At the same time, everyone engaged in a deal is able to trace every action being implemented towards the blockchain, thus reassuring that the terms of a deal are not violated. And this process stands for transparency.
The two features of blockchain that are responsible for such inundated interest in the technology. Big enterprises with hundreds of personnel employed consider it of a great importance since the blockchain is able to save plenty of money on human errors and paper-based work.
Renowned behemoths of oil industry Shell and BP has already announced their mutual intention to try out the blockchain as a major tool of energy trading automatization.
As previously reported by Coinspeaker, the two companies have joined forces of BFOET market to introduce a blockchain-based platform for the effective maintenance of post-trade processes.
Back then an exact date for the platform release was not disclosed, yet the companies announced that it is going to see the world at the end of 2018.
Today the first blockchain-based platform for finalizing crude oil deals goes live in London. The platform was developed by Vakt Global, a consortium venture set up by oil majors BP (BP.L) and Royal Dutch Shell (RDSa.AS), Norway’s Equinor, global energy trading firms Mercuria Energy Group and Koch Supply and Trading, as well as Gunvor.
These firms will initially be the only users of Vakt but access will be opened up in January next year.
According to the statement made by the platform’s official representatives, Vakt is going to use blockchains main advantages to secure transparently and cost-effective post-deal processes, thus facilitating crude oil trade between commodity firms.
As the next step, Vakt platform will be linked with to another platform launched earlier this year, Geneva-based komgo, which will provide financing including digital letters of credit.
Speaking about the Vakt development, Eren Zekioglu, Chief Operations and IT Officer at Gunvor Group said:
“Vakt is the logistical arm…Once a deal is executed through our book of records, it gets pushed through Vakt. The next leg is the financing and the link-up with komgo gives access to several banks.”
The financing platform komgo, which is due to go live before the year-end, is backed by a consortium including 10 global banks and most of the Vakt shareholders. It is expected to take care of the full spectrum of commodities trading, from oil to wheat.
In the meanwhile, Vakt aims to foster the migration of all forms of energy transaction data to the blockchain, improving data quality, further strengthening security and increasing the speed of settlements industry-wide, while reducing the cost for industry participants.
Sofiko is a freelance fintech copywriter at Coinspeaker. With a Bachelor degree in International Business and Economics, Sofiko has been deepening her knowledge of an agile innovative industry primary focusing on the robust blockchain technology and cryptocurrencies. As a bank employee, Sofiko particularly keens on crypto and blockchain integration into the established banking systems.
