Nigerian Crude Oil Sales Fraud: Authentication of Crude Allocation and Documents by Oil Buyers

HOW DO YOU ENSURE THAT THE NIGERIAN CRUDE OIL SELLER’S ALLOCATION OR DOCUMENT IS AUTHENTIC OR GENUINE?

This observation from the investigative report on the subject, conducted by Africans in America News Watch, a New York-based nonprofit organization, in August 2010, sums up the problem:

“There are many genuine sellers of crude oil in Nigeria, but the problem is getting the real, verifiable ones. Crude oil trading is a thriving and booming business and many people seem to want to get involved. Buyers from other countries contact sellers on Nigeria in to buy Nigerian crude oil. [But the business is now full of]… scammers on the prowl.” He adds that “there are many sellers of crude oil in Nigeria, but the challenge there is the ability to find genuine and verifiable sellers.”

In fact, as this author has extensively documented elsewhere in another study, the claim that in today’s arcane world of international crude oil buying and selling, the landscape is literally read and littered with scammers and scammers, now is a well established statement. well-established truth about which there can hardly be any serious argument or dispute in the contemporary international oil buying and selling industry.

Consequently, given the stark REALITY that “there are many genuine sellers of crude oil in Nigeria, but the problem is getting the real and verifiable ones”, the big million dollar question is this: AS A CRUDE BUYER, HOW DO YOU GET THEM? THOSE SELLERS OUT OF THE WHOLE LOT, WHO ARE THE “TRUE AND VERIFIABLE”?

THE KEY? Most experts, in the case of Nigeria, say that basically you (the crude oil buyer) would have to demand and insist that the alleged seller show you AUTHENTIC documentation and other evidence of having a genuine BLCO and FLCO assignment from the NNPC of Nigeria, as well as proof that that product is still currently available. (For Nigeria, the NNPC, which stands for Nigeria National Petroleum Corporation, is a federally owned company that manages the buying and selling of oil, including allocation to genuine sellers of crude oil in Nigeria.)

THE KEY DOCUMENTS IN THE NIGERIAN CRUDE OIL BUY/SELL INDUSTRY

There are some key documents that are crucial in buying Nigerian crude oil transactions. They will include, among others, the following documents:

– Seller’s shipping documents, such as: Clean Ocean bill of lading; seller’s commercial invoice

– Seller’s Proof of Product (will include the Export License and Export Approval, issued by the country’s government, Product Availability declaration, Port Storage Agreement, etc.)

– SGS/Sayboat quantity and quality certificate issued at loading port

– Certificate of Origin issued by the NNPC

– Certificate of Authenticity issued by the NNPC

– Vessel charter contract, issued to the charterer of the vessel and presumably showing that the vessel is actually chartered in the name of the named seller

– the Q88 questionnaire, completed by the vessel’s managers providing the relevant information and specifications of the vessel;

– Etc.

PRODUCT TESTING

Probably the most important document of all that a crude oil buyer may need to see from the seller is the proper Proof of Product (POP). This document, which is to be issued by the appropriate department of the NNPC in Abuja, Nigeria, serves as a clear indication to a buyer of crude oil that the owner of the petroleum product has actual possession of the product, and also serves as an indication that, at least at the time of the transaction (but only at that time), the seller has the merchandise available for sale.

IMPORTANT: However, it must not be any form of POP. It must be one that is in a format that allows satisfactory verification to ensure that it is valid and authentic. Based on this author’s research, to ensure the optimal probability of achieving this goal, there are basically two types of POP documents that are acceptable, and no more, and only vendors whose POP documents meet the “preferred” POP document standards. “, they must to be entertained or cared for.

THE POP MUST MEET THE FOLLOWING CONDITIONS.

IN). You must have the documents for the loaded vessel that are CURRENT (i.e. not more than 2 days old, otherwise the document will be immediately rejected as it may mean the vessel is no longer available), and must include the following documents:

Yo. A current authority to board (ATB). The seller must provide, for the buyer’s inspection, the ATB that was issued specifically to the initial purchaser (consignee) of the crude oil in whose name the vessel was issued. The name on the ATB must exactly match the name on the POP and other documents mentioned here. And, here again, the ATB MUST be UP-TO-DATE, that is, it must not be more than 2 days old. (An ATB that is more than 2 days old should automatically be considered a vessel that is no longer available and therefore not acceptable.)

ii. Quality certificate.

iii. Certificate of origin

IV. cargo manifest

v. Ship depletion report

saw. Quantity certificate.

vii. Bill of lading

viii. NNPC ATS (Authority to Sell)

B) PROVIDE THE DATA OF THE VESSEL.

In general, the Buyer may request (and therefore the Seller must be willing and ready to deliver), details of the vessel such as the following: the name of the vessel, the location of the vessel, the IMO name , the call sign and other details of the vessel. The reason this is necessary is so that the buyer can keep track of said loaded vessel and to determine its current availability.

C) PROVIDE THESE DOCUMENTS, ALSO, FROM THE NNPC

Similar to the POP that accredited buyer facilitation teams like Reliable Dealings International require of any AWR seller before they can begin doing business with them, the other things that can often be required of a seller would include the following:

= the NNPC Lift Lease/License, and

= the NNPC Authorization to Sell Letter (ATS). The Letter of Authorization to Sell, also called the Letter of Assignment, which should generally come from the NNPC Crude Oil Marketing Department, is basically the official document that shows the buyer that the seller actually has the authority of the official government agency. for crude. product that he is selling. (Usually, it should be in paper format and on NNPC company letterhead; it should contain the issue date and expiration date, and be signed. Scanned copies of the document are fine. All documents must be certified, valid, authentic and verifiable).

= If, for example, the seller claims the cargo has been released, they should usually be able to provide the CPA (Charter Party Agreement), ATL (Authority to Load) and vessel details Q88.

OK, BUT HOW DO YOU ENSURE THAT THESE DOCUMENTS ARE AUTHENTIC?

Well, let’s say you’ve assembled the appropriate Product Test and other essential documents, such as those described above. There is one key, indeed critical, question that remains for you: how do you make sure that these documents that you have received from the seller are good? What are real, valid, AUTHENTIC and GENUINE to ensure that the Seller’s offer is taken seriously?

This question is perhaps often the most critical for a buyer because, as a rule, most scammers and con artists operating in the Nigerian crude oil industry are simply masterful counterfeiters and copiers of all legitimate company documents. industry that are used. in purchase and sale operations by refineries and government agencies, and who are highly skilled in the trade. Therefore, buyers are strictly wary of ever, ever accepting outright at face value or being misled by any documents presented by sellers or claims made by them, no matter how convincing or real they may seem! And what all this means is that a crucial facility that a crude oil buyer and his helpers must quickly develop and have, is some good, foolproof tools or skills by which they can INDEPENDENTLY VERIFY the authenticity of at least the key, most important documents. significant among the tons of documents that vendors and their agents often present to them in the course of peddling their wares. And above all, that they must have the skills and knowledge and business sophistication to be able to spot which of these documents are genuine and legitimate, and which may just be fake.

No doubt doing such verification and confirmation can often be problematic for a buyer. However, it’s not really that difficult of a task, at least to the educated and experienced eye. You just need to know what and what to look for, the right questions to ask, and how to counter and cross-check facts and information. And, in any case, whenever you have serious doubts about the authenticity of a document, you should always take the path of caution: request more evidence or even reject the offer, depending on the particular facts at issue in an offer.

FOR A FOLLOW-UP

WANT TO FOLLOW UP HOW YOU CAN MAKE SURE A NIGERIAN CRUDE OIL SELLER’S ALLOCATION OR DOCUMENT IS AUTHENTIC OR GENUINE?

Check out the how-to information in the author’s resource box below.