BY CNA Team - November 13, 2018
Vakt to go live end-November
A blockchain platform facilitating physical energy post-trade processes will go live by the end of the year.
The platform, known as Vakt, was set up by a consortium comprising BP, Shell, Equinor, Gunvor, ABN AMRO, Koch, ING, Mercuria and Societe Generale.
“We expect to go live at the end of November in the North Sea oil market,” said Vakt product development vice president Lyon Hardgrave says at the S&P Global Platts Digital Commodities Summit in London.
S&P Global Platts says in a report dated Nov 12 that the platform will help companies modernise by documenting trading contracts and operations through smart contracts.
By modernising these processes, costs and errors will be reduced while back-end operations will be more reliable and efficient.
“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 says.
He adds that licensees can expect efficiency cost savings of around 40% in post-trade resolution, with data errors eliminated and processes accelerated, freeing up time and capital.
“This not a trading platform, nor a settlement platform – there is no crypto currency involved. But it is everything in between: deal recap; confirmation; contract; logistics (the really big element in all this) – and invoicing,” Hardgrave says.
While he sees the trade and settlement elements as part of a “potential future scope” in digital processes, there are still significant barriers for settlement and only limited value in using blockchain for transactions.
Image courtesy of Vakt website.