BP, Shell plans energy trade through blockchain based platforms
More companies looking forward in joining these blockchain based platforms
An association among several companies including oil and gas leaders Royal Dutch Shell and BP gathered recently. The discussion of this forum went on to planning trade of energy material through blockchain based platforms. The trade will set up during the last quarter of 2018.
Other associated companies to trade in blockchain based platforms:
- Guvnor trading houses
- ABN Amro Bank
- ING Bank
- Societe Generale Bank
- Koch Supply and Trading
- Statoil (Norwegian oil company)
So, what is the use of a blockchain platform for this? The answer lies if we have a look at the functionality of a blockchain. Blockchain creates the backbone in the world of cryptocurrency. A network of computing “nodes” is the basis of blockchain platforms.
Blockchain technology comes along to handle bitcoins. The bitcoin information updates in real-time in a shared database. This information is processed and transactions are calculated within a short time. The best part is it does not require any third-party verification to complete the process.
The energy and commodity group, Mercuria supports the implementation of blockchain technology. Mercuria believes it will largely cut down oil trading charges.
Edward Bell, commodity analyst at Emirates NBD PJSC states that blockchain based platforms to keep track of energy trade will help sort out the ownership of the goods. This will reduce the risks and help to maintain a clear picture of the timeline of each trade.
There have been similar tryouts by other vendors to implement a platform supporting energy trade. Edward believes there is a better chance for the new blockchain technology to success as the oil and gas, and energy companies are already rallied around the task.
The plan of the platform is to run independently in the distributed blockchain. This will reduce maintenance costs and administrative costs. The blockchain based platforms will further enhance the trust and efficiency in the energy trade.