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. Hardgrave has also hinted about Vakt’s future plans 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."

Hardgrave also added that Vakt is receiving requests to look at petrochemicals and U.S. gas. He further stresses that the blockchain-driven platform, once fully operational, could cut up to 40 percent of costs in the post-trade resolution.

In addition, 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 (FOIZ).

A platform similar to Vakt already exists in Switzerland, where a group of major global banks, trading firms, and a leading energy company launched a joint venture, dubbed komgo SA, to oversee a new blockchain-based platform for financing the trading of commodities. The initiatives share some of the same participants, including ABN AMRO, ING, Koch Supply & Trading, Mercuria, Shell, and Societe Generale.