Three prominent players in the oil industry, BP, Equinor, and Shell have established a partnership with major banks and trading institutions to develop a blockchain-based energy commodity trading platform known as Vakt. S&P Global Platts, an independent news outlet that covers the commodities and energy markets, made this partnership public on Monday, November 12.

In addition to the aforementioned oil companies, trading houses Koch Supply & Trading, Mercuria, and Gunvor, along with banks Societe Generale, ING, and ABN Amro are also a part of Vakt. Originally unveiled last year November, Vakt has been designated to aid major firms in their move from “cumbersome paperwork to smart contracts, thereby helping to reduce time spent on operations and make trading more efficient.”

Lyon Hardgrave, Vakt’s product development vice president, noted during the S&P Global Platts Digital Commodities Summit held in London Nov. 12, that the blockchain-driven platform will be launched in the North Sea oil market by the end of November. Hardgrave further elaborated about the plans Vakt has for 2019: “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.”

In addition, Hardgrave stated that Vakt is currently “receiving requests” to look at U.S. gas and petrochemicals. He also added that once the blockchain-driven platform is fully functional, it “could cut up to 40 percent of costs in the post-trade resolution.”

This partnership seems to be approved by stakeholders in the oil industry as a poll conducted by S&P Global Platts throughout the summit shows. The result of the poll found that “a vast majority of participants expect blockchain applications to have reached mass retail market adoption by 2025.”

Vakt won’t be the first of its kind in the industry, however. Switzerland already has a platform that is quite similar to it. In the Swiss version, a major energy company, trading firms, and some major global banks collaborated to launch a joint venture called komgo SA which will “oversee a new blockchain-based platform for financing the trading of commodities.” Some of the participants that are also involved in Vakt include ING, Mercuria, ABN Amro, Societe Generale, Shell, and Koch Supply & Trading.

In conclusion

Major oil firms Equinor, BP, and Shell are partnering with prominent banks and trading houses to launch Vakt, a blockchain-driven platform that will be used for energy commodity trading.

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