Yesterday, Reuters reported that Sinochem Energy Technology Co Ltd, the tech arm of China-based Sinochem, is in talks with Shell and Macquarie for blockchain projects. A source told the news site that the firms are discussing building a platform for the trading of crude oil.
Reportedly, oil giant Shell and investment bank Macquarie signed a Memorandum of Understanding (MoU) in July to explore blockchain systems for oil. This involved looking at one of Sinochem’s incubator projects named Gateway, an energy trading platform. The source revealed that Shell and Macquarie agreed to look at investing in Sinochem under the MoU. We believe PetroChina and COSCO Energy Shipping are also participants.
Gateway hopes to streamline the oil trade with the improved transparency, fraud protection, and settlement efficiency afforded by blockchain technology. Exactly which blockchain the system will run on is unconfirmed.
Ledger Insights first reported on the Sinochem project three days ago. Sinochem’s tech subsidiary values Gateway at just over $14 million, according to Reuters, as opposed to previous reports of $15 million. That compares to international oil blockchain VAKT which initially raised $9 million followed by another $9 million within its first year. But late joiners after launch time invested $5 million each bringing VAKT’s funding to $33 million.
Macquarie and Shell both invested in blockchain commodity trade finance platform komgo last year. The platform is essentially a sister of VAKT, which focuses on post-trade for the oil industry. VAKT now boasts managing more than 90% of the North Sea oil trades. Shell is a member of VAKT, but Macquarie is not. Other leading firms such as Total, BP, and Chevron are also VAKT participants.