Guide To Buy Crude Oil
Nigeria is among the top producer of crude oil with billions of light crude oil reserves
. It is a major exporter of crude oil in the world. Millions of barrels of crude oil are generated in Nigeria on a daily basis. The end supplier of crude oil in Nigeria is NNPC. You might have heard of allottees, fiduciary agent or operators. These sets of traders are under NNPC. It is through these traders that NNPC find buyers of its petroleum, but it may not be the only way.If you want to buy petroleum from Nigeria, there are procedures you have to follow. They are made to suit the buyer. Most buyers sit in the comfort of their home and write procedures for the seller to follow. You should know that it is the responsibility of the seller to issue his procedure and not the buyer. Most sellers leave room for procedure negotiation, so you may take it as a advantage to fairly bargain with the supplier. NNPC does not load and keep vessels waiting for buyers. Vessels are loaded when a buyer shows interest.
A vessel is not loaded after a buyer signs SPA. SPA is not enough proof to show that a buyer can pay for the petroleum. This will not make NNPC to load a vessel in your name Anyone can sign SPA. Proof of funds (POF) is what will make a vessel to be loaded with the buyer's preferred quantity of crude oil and on the buyer's name. If you closely watch most procedures written by unreliable buyers, you will see that they want documents of loaded vessel for verification after SPA is signed. This is where most of them go wrong.
Furthermore, if you want to buy petroleum from Nigeria, you have to follow the end seller's procedure. Once you follow the end seller's procedure, you will have nothing to worry about. A lot of buyers complain that they have signed hundred of SPAs without the seller performing. They maybe two reasons why the seller did not perform. The seller is not registered with NNPC and as such he does not have the product. The second reason is because the buyer did not show POF. Most crude oil carriers hold up to 2 million barrels of petroleum. Calculating the price of this will give you up to $120,000,000 or over based on Platts. You can not expect a seller to load such amount of petroleum when there is no proof that you can pay. The seller will accrue a lot of loss when the buyer is not able to pay.
There are a lot of time-wasters in petroleum trading either posing as sellers or buyers. You can mainly find them at alibaba, trade-key etc. You should try to avoid them because they are not only time-wasters but scammers could also be find amongst them. I suggest you use a registered company to source for crude oil. When you get a seller working as an allottee, operator or fiduciary agent under NNPC, let the seller show you proof of product allocation from NNPC. Use the POP certificate to verify at any NNPC office before proceeding to deal with the seller. This is among the best way to buy crude from Nigeria and get it without getting scammed or fall into the hands of time-wasters.
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