Oil industry giants Shell and BP are among a group of firms planning to launch a blockchain platform to automate post-trade processes in the energy industry by the end of 2018. Other members of the group include Norwegian energy company Statoil, trading houses such as Gunvor, Koch Supply & Trading and Mercuria, and banks including ABN Amro, ING and Societe Generale.
The effort effectively intends to help oil companies replace paper-based documentation with smart contracts — a move expected to cut costs, reduce the risk of errors and make post-trade processes more efficient. The platform will comprise a “secure, real-time blockchain-based platform to manage physical energy transactions,” according to the group.
Lyon Hardgrave, vice president of product development, VAKT Global, the consortium building the platform said licensees that join the blockchain platform on a fee basis can expect to save around 40 percent in post-trade resolution.
“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.” Regulatory approvals for the venture are pending..