The NNPCSo How A, Crude Oil Buyer Buy Crude From Nigerian OFF-OPEC Market?
The first step is to find a credible crude oil seller who doesn ,t just have experience trading OFF-OPEC, but is willing to complete a transaction on reasonable terms, discounts, and procedures.Since the sellers are usually difficult to find, you,d have to communicate directly with their mandates or facilitators.
The NNPC only sells crude oil on FOB terms for both OPEC and OFF-OPEC (PLR) transactions. After which the crude oil seller goes on to cover the insurance , clearance , and transportation cost to enable them to ship crude oil to their buyers on CIF terms. Although ,OFF-OPEC crude oil sellers can still do FOB (Free On Board) , CIF (Cost Insurance Freight ), TTT ( Tanker To Tanker) )and TTO (Tanker Take Over) procedures for any crude buyer that request it.
Next,the crude oil buyer,s bank would need to show a proof of finance to the crude oil sellers,s bank ,after which the seller,s bank would go to show their financial capability and readiness, to post 2% performance bond upon the placing of a financial instrument by the crude oil buyer.
In some cases , the crude oil seller can post an upfront performance bond for the crude oil buyer to provide comfort. After the crude oil buyer,s financial instrument is in place,the crude oil seller will then go on yo secure laycan, load the vessel , and then present all the vessel documents and more to the crude oil buyer for verification before the cargo is shipped.
Procedures could widely varly, and an inexperienced OFF-OPEC crude oil seller,could make dire mistakes in choosing the type of financial instrument or procedure,which occasionally leads to distressed vessels.
What if the crude Oil buyer can,t verify the crude oil seller,s AT5 and partial Proof Of Product ? NNPC does not give OFF-OPEC allocations and so any AT5 (Authority To Sell)
If you,d like us to represent your interest as your crude oil seller mandate or crude oil buyer mandate ,we ,d be glad to do so.
We can also represent your interest as your AGO /JETFUEL A1 buyer mandate or AGO/JETFUEL A1 seller mandate.