BUYING AND SELLING CRUDE OILS AND PETROLEUM PRODUCTS

Transcription

1 CHILLINGTON OIL OUTLINE PROCEDURES BUYING AND SELLING CRUDE OILS AND PETROLEUM PRODUCTS CHILLINGTON ASSOCIATES LTD. Chairman s Office: 14 Havenview Rad, SEATON, Devn, EX12 2PF, United Kingdm Trading Office: Quai Gustave-Adr, Geneva 1207, Switzerland Tel: +44 (0) Fax: +44 (0) [email protected] Registered in Republic f the Seychelles. Cmpany Registratin Number: IBC Registered Office: Suites 25 & 27, 2 nd Flr, Oliaji Trade Centre, Francis Rachel Street, P.O.Bx 1312, Victria, Mahe, Republic f the Seychelles.

2 CHILLINGTON S BUYING BASIS This business wrks n a very simple basis when the seller des nt knw us, r is unknwn t us: The seller prvides the fllwing, unless they are an knwn il majr where they prvide the last tw nly: a prfile f the selling cmpany with a shrt prfile f the directrs f the cmpany (preferably with passprt cpies if nt an il majr); audited financials; histry f their recent trading levels (e.g. cpies f B/Ls); Bank references; Simple letter f ffer, with the draft f their prpsed sales cntract; a cpy f the cntract award letter frm their supplier, r the instructin t ffer n the seller s behalf; Sme basic Prf f Prduct t shw that they have smething t sell (the cntract award letter wuld d, but fr Russian supply please see details n page 5 belw). Mst cmpanies are nt capable f ding this, s ne knws they cannt have crude r prduct fr sale. They wuld have t be able t prvide all f the abve and mre t any Oil Majr r Refinery t get a supply f crude il r a prduct. In return we ffer t supply t them upn receipt and verificatin f their infrmatin a prfile f ur cmpany; financials; histry f ur recent trading levels; Banking references; Signed cntract, if all is acceptable t us, r ur prpsed revisins t theirs. PLEASE NOTE: We sign cntracts, but nly with Prf f Prduct made available befre signing s we can have it verified, and with the full Prf f Prduct attached t the cntract as an appendix t the cntract. Prf f Prduct must be sent directly t us i.e. n bank t bank Prf f Prduct; NOTE: BNP Paribas will refuse acceptance f any and all Prf f Prduct as they are nt the Pstal Service. Hwever we will present the Prf f Prduct t ur bank as part f the verificatin, s they are aware f all the details f the cntract risk. We will have ur bank, BNP Paribas, cnfirm ur financial ability t perfrm the cntract t the seller s bank befre we sign the cntract, but after the Prf f Prduct has been verified. 2007, CHILLINGTON ASSOCIATES LIMITED 2 Buy and Sell Prcedures v.5, May 2007

3 CHILLINGTON S SELLING BASIS This business wrks n a very simple basis when the buyer des nt knw us, r is unknwn t us: The buyer prvides the fllwing, unless they are an knwn il majr where they prvide the last nly: a prfile f their cmpany; audited financials; histry f their recent trading levels (cpies f a cuple f B/Ls); Bank and trade references; Simple letter stating their requirements, including prduct grade, destinatin, quantity, strage, first delivery date, term f cntract, and their price expectatin and any ther details that wuld be helpful. Mst cmpanies are nt capable f ding this, s ne knws they cannt be in the business. They wuld have t be able t prvide all f the abve and mre t any Oil Majr r Refinery t get a supply f prduct. In return we ffer t supply t them upn receipt and verificatin f their infrmatin a prfile f ur cmpany; financials; histry f ur recent trading levels; Banking references; An ffer, with a draft cntract and sme basic prf f prduct PLEASE NOTE: We sign cntracts, but nly with the full Prf f Prduct attached t the cntract as an appendix t the cntract. Prf f Prduct will be sent directly t the buyer i.e. n bank t bank Prf f Prduct; Nte: BNP Paribas will refuse t issue f any and all Prf f Prduct t the buyer s bank as they are nt the Pstal Service. Hwever we expect the seller t present the Prf f Prduct t their bank as part f the verificatin prcess, s that their bank is aware f all the details f the cntract risk. We require that the buyer s bank cnfirm the buyer s financial ability t perfrm the cntract t the ur bank befre we sign the cntract, but after the Prf f Prduct has been verified by the buyer. 2007, CHILLINGTON ASSOCIATES LIMITED 3 Buy and Sell Prcedures v.5, May 2007

4 Abut CHILLINGTON OIL We have been in business, trading il since 1987, with three name changes. We are registered in the Seychelles. We are ISO 9001 accredited, and fllw the same basic buying and selling prcedures as any ther il cmpany r il trader. Our turnver was abut $10 billin last year (2006). Our prfitability was abut 1.7% ($170 millin). Our current grwth is n target. Our main markets are Sub-Saharan Africa and Suthern Africa. Our trading bankers are BNP Paribas (ur prime trading bank), Cmmerzbank, Credit Suisse and Deutschebank, all in Geneva; and ING in Amsterdam. We have ffices in Lndn, Geneva, Jhannesburg, Camern, Ghana, Mzambique, and Nigeria. We have representative ffices in Germany, Russia, Singapre and the USA. We emply abut 100 staff wrldwide. We nly ever use DL/Cs t pay BNP Paribas des n il trading business with any ther instrument. We expect abut 30 days credit n FOB and 7 days n CIF deals (the industry nrm). We expect a 2% fully funded perative Perfrmance Guarantee, except frm Majrs, when we buy. We prvide ne when we sell. We expect realistic quantities t be ffered mst ffers are in the realms f fantasy due t verly large fferings as unrealistically large discunts. We d nt issue LOIs and ICPOs as these are just jker brker talk just the ffer, POP, prf f funds, cntract, instruments, and delivery. 2007, CHILLINGTON ASSOCIATES LIMITED 4 Buy and Sell Prcedures v.5, May 2007

5 Russian Prf f Prduct Uplift r Purchase Cntract (Crude ils) Refinery Resurces Cntract (Gasil and ther refined prducts) Transprt Cntract r Graphic Prt Strage Cntract r Graphic Prt Lading Cntract r Graphic Deal Passprt frm the Exprter f Recrd s Russian bank, in the Exprter f Recrd s name Exprt License issued by the Russian Ministry f Energy And when they have them Marche Rute Telegram r Graphic (the weigh bill shwing that the crude r prduct is accepted fr transprt t the prt. This means that they have paid the exprt tax and the uplifter r refinery and the transprt cmpany). Prt cnfirmed Laycan, which will nly be issued if they have crude/prduct in strage r the Marche Rute Telegram r Graphic has been issued. We expect the fllwing terms: Due Diligence: We will have checked the Prf f Prduct dcumentatin befre cntract signing and befre bank t bank cnfirmatin f ur financial ability. Cpies f the Prf f Prduct will be attached t the back f the cntract and becme part f the cntract. We will have ur bank cntact the seller s bank and cnfirm ur financial ability t perfrm the cntract after checking the Prf f Prduct but befre cntract signing. Perfrmance Bnd: A fully funded 2% Perfrmance Bnd issued by the seller befre we issue ur Dcumentary Letter f Credit. Letter f Credit: t be issued by BNP Paribas - Geneva and shall be Dcumentary, Irrevcable, fully funded, 90 day validity, autmatically divisible, nrmally issued n a carg by carg basis against the Laycan Cnfirmatin (r the Perfrmance Bnd fr the first lifting) but culd be self renewing, can als be nce transferable t a nminated party acceptable t the issuing bank. Payment dcuments: Invice, Bills f Lading, Independent Inspectr s Certificate f Quantity laded, Independent Inspectr s Certificate f Quality laded, Certificate f Origin, Transfer f Title, Samples Receipt, Dcumentatin Receipt, Carg Manifest, Ullage Certificate, Tanker Time Sheet. Pricing: t be FOB based n the relevant Platt with a suitable differential, e.g. a FOB Platt fr FOB sales, (i.e. nt n CIF Rtterdam r France/Italy nr Barges Platt). Hwever we wuld cnsider pricing against IPC/IPE Dtd Brent fr Urals crudes and IPC/IPE Gasil fr Gasil GOST 305/82, with a suitable differential. Payment: t be made within 30 day frm the Bill f Lading date, in US Dllars r Eurs, seller s ptin. 2007, CHILLINGTON ASSOCIATES LIMITED 5 Buy and Sell Prcedures v.5, May 2007

6 Purchase cntract steps fr Crude Oil r Petrleum Prducts 5/17/2007 SELLER Offer, n letterhead Prfile Trade Bank Sent as ne package t CHILLINGTON ASSOCIATES Cntract, Ready t sign Prf f Prduct availability Financials CHILLINGTON ASSOCIATES Admin & Accunts Check Client Pack Register Client Due Diligence Prcurement Check Prf f Prduct Assess Cntract CHILLINGTON signs cntract Bank t Bank prf f financial ability Sign ff: Prcurement, Trading Rm, Finance, Legal, Admin & Lgistics Incrprate any changes Prfile Sent as ne package t Seller Trade Bank Financials SELLER Seller issues Perfrmance Bnd & Buyer issues Dcumentary L/C Cmmence Deliveries Dr Jhn E L Fx Lndn, 26 Oct , CHILLINGTON ASSOCIATES LIMITED 6 Buy and Sell Prcedures v.5, May 2007