VAKT Global, a consortium of massive energy producers, traders, and banks including Shell and BP has announced its blockchain-based trading platform.
The firm tweeted on Thursday confirming that the platform is set to facilitate the trade in crude oil between commodity firms. It claims to be the “first enterprise-grade” blockchain solution, as far as oil and gas market is concerned.
The Tweet states, “Our 5 investors within the BFOET market have now gone live on the VAKT platform!” The BFOET market involves five North Sea crude oil fields – Brent, Forties, Oseberg, Ekofisk, and Troll. The firm intends to enter other markets next year.
The newly launched blockchain platform functions to assist the trading companies, in order to replace paper-based documentation with smart contracts. The move is expected to reduce the cost, resolve errors and make post-trade processes more smooth. Notably, The platform will open to a broader market in January.
Also, VAKT Global has revealed through the Linkedin post that the first line of code was written in May this year. The post further stated that together with its partners Deloitte and IT firm ThoughtWorks, it managed to deliver this project “on time and to budget.”
Additionally, John Jimenez, VAKT Interim CEO expressed on this saying, “Launching into our first market with such high-caliber first users is a transformational moment for us and the industry. But it’s just the start. Success for a blockchain solution depends on widespread adoption, and we’re looking forward to seeing the ecosystem grow.”
The consortium was created a year ago. Apart from Shell and BP, the members are Koch Supply & Trading and Mercuria, Norwegian energy firm Statoil, trading houses such as Gunvor, and banks like ABN Amro, ING, and Societe Generale.
With that, VAKT said in a launch that it intends to “lead 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.”
However, it is not the first time where the oil market is involved in a blockchain platform. Reportedly, in March the energy industry had invested approximately US$300 million in building blockchain applications.