Saudi Aramco has joined the already sizeable list of oil companies partnered with Vakt, the provider of a blockchain-based trading settlement platform for North Sea oil.
Saudi Arabia’s state oil company, Saudi Aramco, has bought into the blockchain-based oil trading company Vakt, Reuters reports on Jan. 28.
Saudi Aramco’s Energy Ventures branch has bought $5 million in new shares, according to Vakt’s press release. The investment will be used to develop the platform, with a focus on expansion into the Asian market.
In addition to investment, the oil conglomerate’s trading subsidiary Aramco Trading is set to use the Vakt platform. The platform is currently live in the North Sea Brent, Forties, Oseberg, Ekofisk and Troll crude oil markets, where it reports to have a high market share. Aramco Trading will add its trading volumes to the blockchain-based platform.
Potential to streamline and modernize oil trading
The Vakt platform focuses on post-trade processing for physical energy transactions. It provides a smooth process from trade entry to settlement by eliminating paper-based processes and manual accounting practices. Hans Middelthon, managing director of SAEV Europe said, “VAKT has demonstrated that their platform has the potential to digitize what is currently a very manual process.”
The use of blockchain ensures a “single source of truth” for both buyers and sellers, which is stored on an immutable and distributed ledger, according to Vakt.
Vakt launched its trading platform in December 2018 with an initial limitation on North Sea markets. The company was created in 2017 by a consortium of industry leaders that included Shell and BP, which were also the first users of the platform.
Since then, the platform onboarded more industry giants such as Chevron, Total and India’s Reliance Industries.
Saudi Aramco — the largest oil company in the world in terms of production — has previously invested in blockchain firms via its venture subsidiary. In May 2019, the firm participated in a $6 million funding round for American blockchain startup Data Gumbo Corp.