Seller BOL, SGS, CPA
We received this RFQ from an agent hoping to make a transaction with our Allotment Holder.
Hello Mr Scott,
Kindly check with your seller if he can do this procedure.
Very urgent CIF RotterdamSeller issue BOL, SGS , CPA
Buyer verifies vessel and issue DL/C
after product here in Europe, We release MT103We issue DL/C, RDLC, BG.. only if a can product verify.
If your seller can work with this procedure we have one year contract deal
Our response:
Dear Sir,
The seller can not issue a BOL (for a product currently for sale) unless it is loaded. An SGS is done on a product to verify quality and quantity (Q&Q) when being delivered. This test and report are performed by an independent testing company on crude oil when it is going to be off-loaded to a tank farm (CIF). These reports may be available for previous shipments to prove that the seller has made previous sales.
No Nigerian seller will give these documents for a contracted sale (multiple months) in advance of placement of a banking instrument because they are not done on tank farms only on loaded vessels.
They are available on SPOT deals where the buyer has disappeared (not paid after placing a banking instrument)
But here is the Fact right from the NNPC:
Please note that the supply and demand trends in the petrochemical industry and high quality of our Bonny Light Crude Oil (BLCO), allow us to sell it at a premium price. Normally all NNPC sales are executed on CIF basis and every cargo has a payment guarantee (with blocked funds), associated with it before it gets loaded at the Bonny Terminal.
So when a seller issues a BOL or SGS report prior to the buyer issuing a banking instrument that is advised (verified) it can only be for a Spot transaction or from a prior sale that is broken or from a prior sale that has been completed. If the sale has been completed then the documents only prove that the seller has delivered BLCO in the past but in no way can these docs be used for a current sale because they refer to a previous sale only.
No Nigerian allotment holder is going to load a vessel with his own money and then wait for a buyer to complete a transaction. This is because costs for vessel storage per day run anywhere from $25,000 to $65,000. And this money has to be paid or the seller forfeits title to the cargo.
To my knowledge no Nigerian seller would ever offer a multi-month contract on TTO or TTT because somebody has to pay (place a banking instrument) to load the cargo. The NNPC will not allow lifting until the banking instrument is good. So the idea that a seller will send out a pregnant vessel to a designated location for verification without getting some money up front to pay for the voyage is kind of silly. They would only do this if the deal was already broken and they were desperate to get the title out of their name.
We do not base our business practices on finding broken sales and then trying to insert the buyer into a spot opportunity. We are looking for real buyers that want to do a purchase with at least a one year duration. This would be where everything (all contracting processes) is done in advance WITHOUT advanced payments (CIF).
- So the buyer is identified and verified to be able to buy crude oil,
- then a contract is issued along with the NNPC documents proving authority and allocation,
- then the buyer verifies these documents,
- then the buyer places a banking instrument so that the product can be lifted onto a vessel
- and sail to the buyers POD (port of delivery).
Delivery to Rotterdam is not a problem but providing documents before a product is loaded that can only be generated after a product is loaded is just a fishing exhibition to find a stupid seller.
Our seller has been in business since 1988 so he is not stupid about how to get a delivery completed.
Any RFQ like this is automatically refused.
Jeff Scott – CFO