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 of industry publication Blockchain News, partner at ICO services collective CryptoAsset Design Group (helped raise over $200m+), director of education company Blockchain Partners (Oracle Partner) and ICO event organiser at leading industry event  CryptoFinancing (first ICO event in Europe) - Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur. He sits on the advisory boards of half a dozen Blockchain startups and has written over 1200 articles on Blockchain technology and startups at Blockchain News and has also published pioneering articles on ICOs in Harvard Business Review and Venturebeat.
 
Kastelein has spoken (keynotes & panels) on Blockchain technology in Amsterdam, Antwerp, Barcelona, Beijing, Brussels, Bucharest, Dubai, Eindhoven, Gdansk, Groningen, the Hague, Helsinki, London, Manchester, Minsk, Nairobi, Nanchang, San Mateo, Shanghai,Tel Aviv and Venice. His network is global and extensive.
 
He is a Canadian (Dutch/Irish/English/Métis) whose writing career has ranged from the Canadian Native Press (Arctic) to the Caribbean & Europe. He's written occasionally for Harvard Business Review, Wired, Venturebeat, The Guardian and Virgin.com and his work and ideas have been translated into Dutch, Greek, Polish, German and French.
 
A journalist by trade, an entrepreneur and adventurer at heart, Kastelein's professional career has ranged from political publishing to TV technology, boatbuilding to judging startups, skippering yachts to marketing and more as he's travelled for nearly 30 years as a Canadian expatriate living around the world.
 
In his 20s, he sailed around the world on small yachts and wrote a series of travel articles called, "The Hitchhiker's Guide to the Seas' travelling by hitching rides on yachts (1989) in major travel and yachting publications. He currently lives in Groningen, Netherlands where he's raising three teenage daughters with his wife and sailing partner, Wieke Beenen.

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