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

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

This observation from the investigative report on the subject 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 booming and thriving business and many people seem to want to get involved. Buyers from other countries contact sellers online. Nigeria in to buy crude oil from Nigeria. [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 literate and full of fraudsters and swindlers, it is now a well established, well established truth about which there can hardly be any serious argument or dispute in the contemporary international oil buying and selling industry.

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

THE KEY? Most experts, in the case of Nigeria, say that basically you (the oil buyer) would have to demand and insist that the purported seller show you AUTHENTIC documentation and other proof of having a genuine assignment of BLCOs and FLCOs from the NNPC from Nigeria, as well as proof that this product is currently still 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 granting allowances to genuine sellers of crude oil in Nigeria.)

THE KEY DOCUMENTS IN THE NIGERIA CRUDE OIL PURCHASE/SALE INDUSTRY

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

– Seller’s shipping documents, such as: Clean Ocean bill of lading; Seller commercial invoice
– Seller’s Product Voucher (will include the Export License and Export Approval, issued by the country’s government, Product Availability statement, Port Storage Agreement, etc.)
– SGS/Sayboat certificate of quantity and quality issued at the port of loading
– Certificate of Origin issued by the NNPC
– Certificate of Authenticity issued by the NNPC
– Vessel charter contract agreement, 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 managers providing the relevant information and specifications of the vessel;
– Etc.

PRODUCT TESTING

Probably the most important document of all that a buyer of crude oil may need to see from the seller is the proper Proof of Product (POP). This document, which must 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 should 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 writer’s research, to ensure the optimal probability that this goal can be achieved, there are basically two types of POPs that are acceptable, and no more, and only those vendors whose POPs meet the POPs standards. POP “preferred”, must to be entertained or served.

THE POP MUST MEET THE FOLLOWING CONDITIONS.

HAS). 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:

i. A current boarding authority (ATB). The seller must provide, for the buyer’s inspection, the ATB that was specifically issued to the initial buyer (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, i.e. not 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 Shortage Report
saw. Certificate of quantity.
vii. Bill of lading
viii. NNPC ATS (Authority to Sell)

B) PROVIDE THE DATA OF THE SHIP.

Typically, the Buyer may request (and therefore the Seller must be willing and ready to deliver) details of the vessel such as: the name of the vessel, the location of the vessel, the name of the IMO, 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

As in the case of the POP that accredited buyer facilitation teams like Reliable Dealings International require from any AWR seller before they can start doing business with them, the other things that may often be required of a seller would include the following:

= the NNPC Elevation Lease/License, and

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

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

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

Well, let’s assume 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 ensure that these documents 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 general rule, most of the swindlers and swindlers operating in the Nigerian crude oil industry are simply master forgers and copyists of all legitimate documents in the 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 cautious to never, ever accept directly at face value or be 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 and 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 the knowledge and the commercial sophistication to be able to detect which of those documents are genuine and legitimate, and which may simply be false.

To be sure, doing such verification and confirmation can often be troublesome for a buyer. However, it is not really such a difficult task, at least for the educated and experienced eyes. You just need to know what and what to look for, the right questions to ask, and how to counter and collate 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: ask for more evidence or even decline the offer, depending on the particular facts at issue in an offer.

FOR A FOLLOW-UP

DO YOU WANT TO FOLLOW UP ON HOW YOU CAN ENSURE THAT A NIGERIAN CRUDE OIL SELLER’S ASSIGNMENT OR DOCUMENT IS AUTHENTIC OR GENUINE?
See the instructional information in the author’s resource box below.