VAKT To Launch Oil Industry-Backed Blockchain Platform This Month
VAKT, a company jointly established by global banks, energy companies and trading firms, is planning to launch a blockchain platform for energy commodity trading by the end of this month.
VAKT was created and launched as an independent firm in December 2017. Companies from energy majors BP, Equinor and Shell, independent traders Gunvor, Koch Supply & Trading and Mercuria, and banks ABN Amro, ING and Société Générale each contributed capital with the purpose of developing an industry-wide solution in post-trade processing for commodities.
During the Digital Commodities Summit hosted by S&P Global Platts on Monday, VAKT announced that it will launch a blockchain platform to help companies move away from traditional and cumbersome paper-based trading contracts and operations documentation to digital smart contracts. The goal is to help companies cut costs, reduce the risk of errors and make back-end trading operations more reliable and efficient.
“We expect to go live at the end of November in the North Sea oil market,” said Vakt product development vice president Lyon Hardgrave. “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 said that with the plaform’s ability to eliminate data errors and accelerate processes, licensees paying to use the platform would experience cost savings of around 40% in post-trade resolution.
“This not a trading platform, nor a settlement platform – there is no crypto currency involved,” Hardgrave said. “But it is everything in between: deal recap; confirmation; contract; logistics (the really big element in all this) — and invoicing,.”
Vakt CTO Adam Vile said that the platform will focus on creating a “single source of truth” for the trade lifecycle.
“It was confined in the platform to the writing of the resolved truth,” Vile said. “There is a whole stack of standard technology above the blockchain – we’ve built an enterprise solution with blockchain underpinning it.”
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