Participants in the physically traded BFOET crude oil business – including some of the world’s premier energy traders – will now benefit from improved security and efficiency. This private launch marks the world’s first fully operational, enterprise-grade blockchain platform to enter the market.
VAKT is an independent company created and backed by some of the world’s premier energy majors, commodity traders and banks. Of these, BP, Equinor, Shell, Gunvor and Mercuria have launched privately as VAKT’s first users, running in parallel with their internal systems, with the platform set to open to the wider market in January.
John Jimenez, Interim CEO, comments: “We’ve been overwhelmed by the strength of response to the VAKT concept. Launching into our first market with such high-calibre first users is a transformational moment for us and the industry. But it’s just the start: success for a blockchain solution depends on widespread adoption and we’re looking forward to seeing the ecosystem grow.”
VAKT’s other backers include Koch Supply & Trading, ABN Amro, ING and Societe Generale.
VAKT has created a secure, real-time blockchain-based digital platform, working with global software consultancy ThoughtWorks and underpinned by JPMorgan’s Quorum private distributed ledger. The platform manages physical energy transactions from trade entry to final settlement, eliminating reconciliation and paper-based processes.
Eren Zekioglu, Chief Operations & IT Officer, Gunvor, comments: “To be great, a trading company needs two things: good technology and speed. By radically streamlining post-trade processes, VAKT offers both. This is a big step for the physical energy trading markets and I see VAKT becoming the industry-standard.”
Though the initial launch is limited to trade specifically in BFOET crude oil contracts, VAKT’s ambition is to extend the platform to all physically traded energy commodities. The company is building its roadmap in response to industry need but has US crude oil pipelines and Northern Europe refined product barges slated for launch in early 2019.
“Digitalisation is changing how the energy value chain works. It’s an exciting time,” said Andrew Smith, EVP Trading & Supply, Shell International Trading and Shipping Company Limited. “Collaboration with our peers and some of the industry’s key players is the best way to combine market expertise and achieve the scale necessary to launch a digital transaction platform that could transform the way we all do business. Ultimately the aim is improved speed and security, which benefits everyone along the supply chain from market participants to customers.”