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Commodities Behemoth Testing Blockchain Tech with Crude Oil Cargo

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.

Richard Kasteleinhttps://www.the-blockchain.com
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, the Netherlands where he has set down his anchor to raise a family and write. Founder and publisher of industry publication Blockchain News (EST 2015) and director of education company Blockchain Partners (Oracle Partner) – Vancouver native Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur. He has written over 2500 articles on Blockchain technology and startups at Blockchain News and has also published in Harvard Business Review, Venturebeat, Wired, The Guardian and a number of other publications. Kastelein has an Honorary Ph.D. and is Chair Professor of Blockchain at China's first blockchain University in Nanchang at the Jiangxi Ahead Institute software and Technology. He has over a half a decade experience judging and rewarding some 1000+ innovation projects as an EU expert for the European Commission's SME Instrument programme as a startup assessor and as a startup judge for the UK government's Innovate UK division. Kastelein has spoken (keynotes & panels) on Blockchain technology at over 50 events in 30+ cities.
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