The implementation of blockchain technology has already made it to the oil industry with the use of Vakt as a segue. The blockchain-based post-trade platform has been working to expand its reach for a clearer view of the industry as a whole in the North Sea region. According to a recent announcement by Vakt on their official website, another four clients have been signed up.
CEO Etienne Amic said that the four new clients have joined just before the upcoming launch of International Petroleum Week, which begins in London on February 26th. At this point, the platform had only been used by the direct backers of the project, which includes BP, Shell, Total, Guvnor, and Mercuria. However, other investors have gotten involved, like Chevron, Equinor, and Reliance Industries.
“We felt that we needed about 60 to 70 percent of a market to reach ignition point that would incentivize other people to join.”
True to his goals, the addition of these four new clients ensures that Vakt will be a critical part of 2/3 of all deals to happen in the North Sea area. However, that is just the beginning of the potential that Vakt has in the trading market. Vakt’s work right now will lay down the groundwork for the addition of other products onto a blockchain, like gasoline in Northern Europe and crude pipelines in the United States.
Along with the efforts made by Vakt, it is becoming more apparent that the need to use blockchain technology is arising in areas like agriculture and crop trading. Presently, the
“ABCDs” of agricultural trading – which includes Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus Company – along with Cofco, are looking at setting up a platform as well. Jean-Francois Lambert, a commodity consultant, and former head of commodity trade finance at HSBC, commented in the press release, “It’s become more and more difficult to make money by trading commodities and any means to lower costs and shorten the transaction times is welcome.”
Better efficiency in commodity trading is a must, and the digitization of these records could bring back the edge that traders used to have, considering the substantial proprietary knowledge this ledger offers. Considering that many trades are still arranged by phone, digitization and the blockchain could speed up innovation for the entire trading sector. Simply put, Amic said,
“The younger people want to click, they don’t want to talk on the phone.”