A BP PLC (LON:BP) and Royal Dutch Shell PLC (LON:RDSB) led blockchain oil trading system could be up and running before the end of 2018.
There have been a number of recent reports regarding the potential implementation of blockchain which would allow ‘Big Oil’ to ditch “cumbersome” paper contracts and instead use smart contracts that can be secured and authenticated by the new blockchain ledger technology.
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Other companies in the consortium included trading groups such as Gunvor, Koch and Mercuria, as well as international banks ABN Amro, ING and Societe Generale.
The members of the initial consortium are significant oil market participants and they will stress test the platform, before it is opened up to the broader commodity industry.
“By combining the expertise of some of the largest players in energy and commodity trading with the trade finance credentials of established banks in this space, the new venture will benefit from its shareholders' ability to implement projects, as well as their first-hand understanding of the operational and process opportunities that digitalisation presents,” the group said in a statement.
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“The new venture seeks to create a secure, real-time blockchain-based digital platform to manage physical energy transactions from trade entry to final settlement.”