We believe that it is possible to do crude oil business and not fail most of the time – not even part of the time. I think that is somewhat a rare belief.
It’s only a dream to believe you can just wake up and have a good success in crude oil business. It just doesn’t happen, except when you are dealing with the right group of influences. The BLCO Nigeria crude oil production is a unique product that most countries yearn to buy.
Our mandate as a company is to be successful and stay true to our clients by providing a clear pathway for genuine crude oil sellers and buyer, to transact business smoothly and do away with the suspicions of fraud and mistrust.
When you think about it, to have success in the oil business everybody involved has to agree with everything and then everybody has to do what they agreed to do, regardless of their capabilities and believe. And then introduce the idea that your minimum buyer requires 61 days instrument duration entry and you have an idea of the difficulty in placing 366 days instrument.
You would think that notion would narrow the field and that may be the case most of the time. But it pays to look at it differently. If you make the deal so simple that everybody can agree and perform, then the deal can get accomplished with very little competence.
Take the business that we are in, What the seller wants is to get paid and what the buyer wants is to get the cargo delivered. So what if we just say, the seller delivers and the buyer pays, simple. Now, how can we get as close to that as possible? If everybody had 100% trust we could just go ahead and do it that way. But there are other people involved that say no. Which are the Banks that resellers with no money go to for fund and placement of Bank Instrument on their behalf? So how can we get tackle Bank issues with their own terms with resellers?
CRUDE OIL Buying PROCESS
(A) The Buyer finds a representative the right broker that understands the circle slopes in Nigeria crude oil trading, with experience and connections. Make him your eyes for verifications of the seller, confirmation of seller’s authority To Sell / Proof Of product in the right office.
(B) If you cannot find such a representative, consultant, facilitator or mandate, then use “iRichie, as an intermediary between you buyer and the seller to overseas things for a successful transaction.
(C) Demand for seller verbiage, and go for a meeting with your Bank or financial institutes that are to issue instrument to the seller on your behalf. Educate them to understand that, True Nigeria Fiduciary Sellers of OFF-OPEC does not Swift ATS/POP bank To bank.
(D) Make your bank or funding Institute to understand the process for verification of the product (POP) which is confirmation at Crude Oil and Marketing Department, Off-OPEC Division Data Base, NNPC/JVC Bonny Ocean terminal. Not in NNPC Abuja office or London. After successful agreement with your Bank, then
(1) The Seller And the Buyer signs Sales And Purchase Agreement (SPA).
(2) The seller proves they have the authority to sell (ATS) with a Partial Proof Of Product to the buyer who now forwards it to their Bank.
(3) Then buyer proves they have Proof Of Fund (POF = MT799, MT199 or MT103) by instructing their Bank to place Payment Guarantee (Instrument) in favor of the seller in accordance with the seller’s Bank Verbiage, which the buyer ability to pay for the cargo upon arrival to their Port Of Destination.
(4) Then the seller delivers cargo and the buyer tests (Q&Q) the product, and when satisfied pays (MT103).
This is so easy, professional and sure means of getting crude oil deal closed.
A lot of resellers have been chasing one loaded cargo or another without success. The question is, was that Cargo loaded for you?
Loaded Cargo Destination
No seller intentionally loads a 2million barrels vessel without being sure of the buyer and sale to overseas to look for who will buy? There are unimaginable risk involved.
As brokers, we must face reality and STOP chasing shadows which we at iRichie call “SHADOW CARGOS”. We have the means to make sure there is nothing that can go wrong. We have a proven track record of success and well connected to genuine sellers. Also, because we have had the success we can simplify further. Some of this comes from huge experience, and this is why it is important to have a really good connection and knowledge of the business you do.
We have convinced the NNPC/JCV partner at the Bonny Terminal that we could go ahead with just a payment guarantee which is bank instrument and then deliver and then the buyer would pay. Not every seller can do this. Why? Because their contacts and connections are not strong and good enough to facilitate good positive result. We are on top of things and make things happen as far as Nigeria Crude Oil Trading is a concern.
But hear me say this now, despite our contacts, experience and top connections, This process would NOT work for very long if the mandates or agents keep on introducing fake and incompetent buyers that could not pay.
In the process of our due diligence with our sellers, we have found out that a particular seller could deliver and had done so 12 times, but without having a single buyer pay. Obviously, they were doing something very wrong costing them millions of dollars.
Now when buyers come in the door they want to take the easy path to have success, without minding how favorable it will go with the other party (the reseller). However, there are still holdouts from those that do not trust and put up barriers that make it hard for a seller. A typical barrier is a demand for an upfront performance bond, even with DLC/BCL which is not the active instrument. It is like saying to a seller, “We do not trust you to deliver.” And then the buyer’s bank has to make it hard on the seller. And the harder it becomes, the harder it will ever remain for such a buyer to close a deal.
And if the seller procedure is complicated, then the more something may go wrong somewhere in the deal. By doing so, you really do not want your banks to help you close a deal. It is completely possible to walk a real seller and a real buyer into a procedure that will NEVER close. And it is also possible to close the deal with straight forward procedures with the clear understanding of such procedures. But when you keep on creating barriers in form of purchase security which is out of the sales and purchase terms, then you can never know that it will not close until it is too late. So if you can keep it simple the lack of knowledge and experience by anybody involved has a much harder time to get in the way.
We respect the human factor in oil transactions, but same time we do not expect the contract to somehow close the deal itself. Both parties involved in Crude Oil transactions (reseller/intermediary/Agents and end-buyer) “MUST” put in their efforts to push past the problems by keeping the focus on the end result while dealing with the challenges with a “POSITIVE MINDSET”.
One of the ways we challenge the statuesque is by discovering where the impediments to a transaction are and then change the situation to provide an elegant and simple solution to the problem. We really try hard to give advice that will benefit people in crude oil trading business.
We want to do business with people that believe what we believe. We believe it is possible to succeed and we have succeeded so many times and as a result, we are putting it to others that they too can succeed.
We provide private answers to private problems.
We want to work with people that are willing to be part of the solution. We don’t want to work with people that do not want to trust and will insist on putting up all kinds of barriers in succeeding. We like talking to people who understand that Nigeria is not having any problem selling Crude Oil. And I also educate people that believe that Nigeria is having a hard time making sales. That is just not the case. If you were a buyer that has had success are you going to go around creating more competition for yourself? I don’t think so. I have seen the lifting schedules – 28 shipments in 15 days.
Every Nigeria sellers want to deliver and consistently deliver. iRichie Group wants to help buyers to take a different pathway than the one they have forged through experience from other Oil nations. Contact us and let us show you how to avoid your bad experiences and make a good success. Let us advise you to stay away from certain things that will kill a deal.
Because our marketplace is difficult the challenges in our marketplace are actually opportunities for profit. The kind of profit that others will rarely experience. That is perhaps the biggest reason to do this business. If iRichie Group opens its door to buyers all over the world.
Our team is seasoned, experienced, influential, conscientious, innovative and prophetic. Having access to us means that you have gotten direct contact with NNPC Authorized Fiduciary Sellers of NNPC OFF-OPEC Crude Oil- Direct Terminal Loading.
We are talking about TRIED, TESTED AND TRUSTED Fiduciary Sellers of Bonny Light Crude Oil (BLCO).
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We will provide you everything information you need to build your trust and execute crude oil purchase in Nigeria.