Commodities Behemoth Testing Blockchain Tech with Crude Oil Cargo

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Swiss-based international commodity trading company Mercuria along with financial services companies ING and Societe Generale is working on a large Blockchain-based oil trade. 

Reuters reported that Mercuria’s chief executive and co-founder Marco Dunand announced the deal during the ongoing World Economic Forum in Davos, Switzerland, that is focusing on the topic digitalization among top global oil companies and trading houses.

Dunand told Reuters that Mercuria is shipping an oil cargo with African crude to China and selling it to ‘ChemChina’, a shareholder of Mercuria, along with the partnership of ING and Societe Generale that are helping out in executing the deal.

“The energy industry will have to digitalize more and more in oil production, refining, shipping. So traders will also have to participate,” Dunand said. “It is a pre-archaic process. So introducing Blockchain will allow passing title from buyer to shipper to seller without going through a massive paperwork of bills of lading.”

Presently, when the goods are shipped from buyer to trader to seller, the captain of the ship issues a document called ‘bill of lading’ and stamps it, which has to be carried to acknowledge the receipt of the cargo shipment. These documents will then go to the customers, surveyors, and others, whereas the carrier should issue letters of indemnity in case documents are not processed in time.

This is where the Blockchain technology comes in. In the case of the Blockchain, it works as creating a permanent and public ‘ledgers’ of all the transactions that can potentially replace the clearing and settlement system with a simple ledger. According to Dunand, the concept underlying the deal is very simple and efficient.

Dunand also mentioned that if the industry managed to standardize the Blockchain contracts, the oil trading process will become faster, safer at the same time cost-effective.

About Richard Kastelein

Founder, Publisher and Editor in Chief of industry leading online publication, Blockchain News and co-founder and director at Blockchain Partners in London/Amsterdam/NYC. Kastelein is also an advisor with a number Blockchain startups doing ICOs including Humaniq.co where hs is interim CMO, DECENT.ch, Inchain, Chronobank, eGaas and others. He is regarded as one of the top journalists by the Blockchain and fintech communities – as is evident by his entry in the Top 150 Fintech journalists online and in the top 10 of the Blockchain Top 100 List.

As a prominent keynote presenter, he has spoken on Blockchain at events in Gdansk, Amsterdam, Minsk, Dubai, Antwerp, Eindhoven, Bucharest, Nairobi, Tel Aviv, Manchester, Brussels, Barcelona etc, where he helped spread the cause for Blockchain technology and cryptocurrency and, consequently, has built a notable network in the scene.

He’s also a director of a Dutch foundation called The Hackitarians and has run innovation events in London, San Francisco, Berlin, Amsterdam and other cities around the world on topics such Blockchain, Health, Energy, Internet of Things, AI etc.

In 2013, the European Commission appointed him as an expert for overseeing financing for emerging startups as a part of the European Commission’s 90 billion euro Horizon 2020 project, created in Brussels to promote innovation as a driving force of job creation and business ventures across Europe. He has also worked as an external expert for Innovate UK since 2012, judging startups for the UK government.

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