The Swiss oil and gas industry Mercuria could start using the technology behind the Bitcoin digital currency within the next year, according to one of the globe biggest dealer. The commodities is seen to be one where many basic processes, such as the paperwork needed to load oil onto a tanker, for example, are still very old. Marco Dunand, chief executive of Swiss-based Mercuria said, "he don’t know if it is 17th or 18th century, but it's not that sophisticated and with today's technology it seems to be easy to improve the efficiency of the system". Mercuria has seen enough bank presentations to believe the technology is there and it's solid. And They believe they’re going to see a digital transformation of the oil and gas industry. Dunand believes a key part of the Brent market that helps to set the global benchmark price for oil could be making regular use of blockchain payment technology, provided enough members agree to use it.
The Brent crude derivative, or paper, market, is underpinned by four physical crude oils - Brent itself, Forties, Ekofisk and Oseberg (BFOE) - and could be an ideal early adopter of blockchain. BFOE for instance is a market that has a limited amount of participants, that requires a reasonably solid balance sheet. You could see this type of market going to blockchain payments within the next 12 months. They think this could reduce costs, certainly on payments, by 30 percent. The blockchain technology works by creating permanent, public ledgers of all transactions that could potentially replace complicated clearing and settlement systems with one simple ledger.
Dunand's company often helps to bridge the gap between the so-called physical markets, where real barrels of oil change hands, and the paper markets, where futures, options and other derivatives trade. It is not often that a commodities market leapfrogs ahead of some of the bigger financial markets that tend to be more likely to embrace new technology. While almost every major bank has said it is looking into the technology, widespread financial adoption has been thought to be at least five to 10 years away. Consultancy Oliver Wyman said in a report in February 2016, "it would take at least a decade for blockchain to overhaul core parts of the financial industry". According to Marco Dunand some parts of the physical energy markets would remain stuck in their ways for some time to come. The company could adapt it fast, but it need a certain amount of members in the business to get it going.
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