Oman Oil, Orpic Group and HSBC Execute First Blockchain Pilot Transaction
The Oman Oil and Orpic Group and HSBC Bank Oman have successfully executed the first blockchain pilot trade finance transaction in Oman on its 49th National Day at the Group’s main office in Muscat. The blockchain transaction involved the issuance of a fully digitised letter of credit (LC) created on a distributed ledger platform, with HSBC Oman as the advising bank and Oman Oil and Orpic Group as the beneficiary of the LC. The transaction involved the shipment of polypropylene, a thermoplastic polymer used in a wide variety of applications.
The Oman Oil and Orpic Group and HSBC Bank Oman have successfully executed the first blockchain pilot trade finance transaction in Oman on its 49th National Day at the Group’s main office in Muscat. The blockchain transaction involved the issuance of a fully digitised letter of credit (LC) created on a distributed ledger platform, with HSBC Oman as the advising bank and Oman Oil and Orpic Group as the beneficiary of the LC. The transaction involved the shipment of polypropylene, a thermoplastic polymer used in a wide variety of applications.
Andrew Long, CEO of HSBC Oman said: “As the world’s leading bank for trade finance, HSBC is actively supporting the adoption of technologies such as blockchain to make global trade faster, safer and simpler. During the last 71 years in Oman, HSBC has had many ‘firsts’ in the country including being the first bank to offer ATMs and the first online banking platform. Completing the first blockchain trade finance transaction is yet another significant milestone in our journey in Oman as it breaks new ground in pushing forward digital technologies in Oman’s financial sector. The support of the Central Bank of Oman was critical in taking the transaction from concept to execution in a short timeframe”.
Commenting on this milestone, Nazar Al Lawati, the Oman Oil and Orpic Group’s CFO stated that “As an integrated Group, we are proud to be among the first in the region taking serious steps in digitising Trade Finance through exploring Blockchain technology and responding to the 4th Industrial Revolution. This wouldn’t have been possible without the commitment of our team, our customer’s cooperation and the support we received from the Central Bank of Oman and HSBC Oman”
This transaction further evidences the commercial and operational viability of blockchain as an alternative to conventional exchanges of paper-based documentation. The blockchain LC flow mirrors the traditional process with all participants using a single blockchain platform that enables exponential improvement in efficiency.
“This Blockchain pilot is an important station in our journey towards digitisation, a journey that started with Artificial Intelligence (RPA++) and continues to embrace new disruptive technologies”, Sadiq Al Lawati, Finance & Strategy Commercial Value Partner at the Oman Oil and Orpic Group.
R3’s Corda uses blockchain to track, and trace information as it moves between parties. The Corda technology keeps all stakeholders in sync, reducing the need for reconciliation and speeding up transactions, whilst providing visibility on progress for all. This visibility means greater confidence for all parties involved, including banks, making trade finance straighter forward.
“Implementing a new form of digital technology will always have its share of challenges. However, with the close coordination and collaboration between Oman Oil and Orpic Group, the Central Bank of Oman and HSBC Oman, we were able to collectively overcome obstacles and push Oman’s financial sector to the forefront of the ‘new age of banking,’” said Mohamed Mansour, Head of Global Trade and Receivables Finance in HSBC Oman.
Gilles Rochas, GM of Performance Chemical at the Oman Oil and Orpic Group added that “this Blockchain pilot transaction is an important step towards increasing our value proposition to our valued customers. We thank our customer, Abu Dhabi National Carpet Factory, member of ADNIP group, for collaborating with us in this important milestone”
A blockchain is said to be a highly resilient system which will revolutionise international trade and paperwork. In summary it is a digital record of transactions that creates trust and is maintained across several computers that are linked in a peer-to-peer network. Through decentralised, secure networks, blockchain technology can be the conduit that connects trade partners globally to share data in a scalable way that makes the trade process faster, safer and simpler opening new opportunities for Oman in international trade and investment.
