The buyer will need to submit an ICPO with a Notice of Readiness (NOR) from their tank farm or ship, along with the relevant documents and forms that will be sent to the Buyer. Once terms represented therein are accepted by the Buyer, pricing discounts will be offered.
NOTE: No NOR, No deal. This is a very strict policy instituted by the refineries and must be adhered to.
The procedures are as follows:
1) Buyer tenders ICPO (with passport & CP) and POF & NOR to Seller
2) Seller responds with Confirmation Letter of fuel availability;
3) Seller issues a Joint Participation Agreement (JPA);
4) Upon receipt of signed JPA, Seller issues CI;
5) Upon receipt of singed CI, Seller issues DTA;
6) Upon Buyer’s receipt of successful SGS report, Seller arranges fuel transfer to Buyer’s tanks;
7) Upon Buyer confirming complete transfer of fuel, Buyer pays for fuel and Seller issues POP & other relative Title docs.
** PLEASE NOTE: These procedures will adjust slightly based on which seller eventually tenders an offer. Seller conducts its banking transactions via the Bank of America Global Markets Trade Desk in New York; your buyer’s banking has to be either in the US or have a corresponding bank in the US.
STANDARD FOB TRADING PROCEDURE - GLOBAL OIL AND GAS TRADING
1. Buyer issues LOI with complete purchase requirement, and KYC + CP
2. Seller issues SCO
3. Buyer issues Irrevocable Corporate Purchase Order (ICPO) accepting seller's price, terms and procedures along with signed RWA /BCL from his bank evidencing availability of funds to transact, and vaid TSA/CPA
4. Seller issues draft of Sale and Purchase Agreement (SPA) contract along with Commercial Invoice. Buyer signs SPA and returns to seller along with verifiable storage tank coordinates. Seller verifies and approves Buyer’s tank farm coordinates, (TSA).
5. Seller provides following Partial Proof Of Product (PPOP) documents via Email or Fax to Buyer.
A. Authorization/Authority to Sell (ATS)
B. Product Quality Passport (Dip Test result of Product)
C. Letter of Commitment to Supply
D. Statement of Product Availability
E. Reservoir Storage Receipt.
F. Allocation Transaction Passport Code Certificate
6. Within 3 days upon the receipt & verification of the above PPOP documents, Buyer provides verifiable Tank Storage Receipt (TSR), Authorization to Inject (ATI) at the Loading port with injection permit. Buyer issues SBLC via SWIFT MT760 to seller's bank.
7. Seller issues 2% Performance Guarantee to Buyer
8. All parties sign NCNDA/IMFPA.
9. Seller issues (DTA) Dip Test Authorization for Q&Q along with complete Fuel Injection Report from the Pipeline/ Transportation Company.
10. Upon satisfactory Q&Q/Dip Test Inspection carried out by either SGS or similar inspection agency, Buyer releases full cost of the liftable product via MT103 TT wire transfer to Seller’s nominated Account within 72 hours and injection to buyer's tanks commences.
11. Seller issues the Title Transfer of Product Ownership / Certificate of Ownership to buyer’s company along with all necessary Export Documents.
12. Seller pays all intermediaries involved in the transaction as per IMFPA/NCNDA.
Global Oil And Gas Trading - FOB Transaction Procedure
FOB (ROTTERDAM & HOUSTON)
TERMS AND PROCEDURES / NON NEGOTIABLE
1. Buyer issues ICPO + C/P + POF + Buyer's Passport Copy for Data File (OR) Company License.
2. Seller issues commercial invoice (CI) along with POP documents listed below to the Buyer who returns signed and
sealed Commercial Invoice (CI) to the seller.
TSR (Tank Storage Receipt)
Unconditional Dip-Test Authorization
Letter of Acknowledgement
Dip-Test Inspection Schedule
ATV (Authorization to verify)
3. Buyer Dip-tests in Seller's tank using SGS (or equivalent) and receives fresh Q&Q Report along with ATSC (Authorization To Sell and Collect).
4. Within 72 Hours, Buyer provides TSR or Vessel storage for Injection of product into the Buyers hired tanks or vessel and returns the NCND/IMFPA signed by all parties involved in the buyer's side to the seller.
5. Buyer pays total cost of product via SWIFT MT103.
6. Seller confirms Buyer's payment receipt, completes injection into buyer's storage tanks/vessel,
7 Both parties release payment to all intermediaries on each side Involved in the transaction.
8. Contract begins with Rolls and Extensions.
GLOBAL OIL AND GAS TRADING FOB TRANSACTION PROCEDURE-2