* BP, Shell, top traders to start with North Sea cargoes
* Blockchain seen as solution to boost margins
* Vakt platform speeds-up processes, provides security
* Targets U.S. pipelines, northern Europe products in early2019
By Julia Payne
LONDON, Nov 29 (Reuters) - Oil majors and trading firms canstart finalising crude oil deals on a live blockchain-basedplatform for the first time, in a move that could revolutionisethe market.
Commodities trading firms have piloted similar schemes inrecent years as blockchain technology has the potential todrastically cut costs in an environment of razor-thin profitmargins.
London-based platform Vakt is the first of these to go live,with shareholder Gunvor Group saying it was rolled out onWednesday, although no trades took place that day.
Blockchain, the platform behind cryptocurrency Bitcoin, isviewed by many as a solution to trade and settlementinefficiencies, as well as a way to improve transparency andreduce the risk of fraud.
Vakt was created in 2017 by a consortium that includes oilmajors BP and Royal Dutch Shell, Norway'sEquinor, global energy trading firms Mercuria Energy Group andKoch Supply and Trading, as well as Gunvor.
These firms will initially be the only users of Vakt butaccess will be opened up in January next year.
Banks ABN Amro, ING and Societe Generale are othershareholders.
Vakt digitises and centralises what was previously amountain of a paperwork shared between all the parties involvedin each deal. It will be linked to another platform launchedearlier this year, Geneva-based komgo, which will providefinancing including digital letters of credit.
"Vakt is the logistical arm...Once a deal is executedthrough our book of records, it gets pushed through Vakt. Thenext leg is the financing and the link-up with komgo givesaccess to several banks," said Eren Zekioglu, Chief Operationsand IT Officer at Gunvor Group.
komgo, which is due to go live before the year end, isbacked by a consortium including 10 global banks and most of theVakt shareholders.
The financing platform will target the full spectrum ofcommodities trading, from oil to wheat.
Use of Vakt will at first be limited to contracts for thefive North Sea crude grades that are used to set dated Brent, abenchmark used to price most of the world's crude oil.
In early 2019, the platform plans to include U.S. crudepipelines and barges of refined products like gasoline innorthern Europe.
"It's an exciting time," Andrew Smith, Shell's head oftrading, said.
"Collaboration with our peers and some of the industry's keyplayers is the best way to combine market expertise and achievethe scale necessary to launch a digital transaction platformthat could transform the way we all do business."(Reporting By Julia Payne; Editing by Kirsten Donovan)