Fraud in Nigerian Crude Oil Marketing: Authenticating The Crude Allocation and Files by Oil Purchasers


This observation by the study report on the matter, completed by the Africans in The us News Observe, a New York based non-revenue firm, in August 2010, sums up the issue:

“There are many genuine crude oil sellers in Nigeria but the issue is acquiring the genuine and verifiable ones. Crude Oil trade is a booming and flourishing company and a lot of men and women look to want to go into it. Buyers from other countries make contact with sellers in Nigeria in purchase to get Nigerian Crude Oil. [But the business is now full of]… scammers on the prowl.” It adds that “There are heaps of crude oil sellers in Nigeria, but the obstacle there is the potential to locate genuine and verifiable sellers.”

In level of fact, as this writer has amply documented somewhere else in an additional review, the assertion that in the arcane entire world of international crude oil getting and offering these days the landscape is literally littered and crawling with fraudsters and scammers, is now a nicely-set up, well-settled truth about which there can hardly be any critical argument or disputation in the modern intercontinental oil getting and marketing market.

In consequence, provided that stark Fact that “there are several real crude oil sellers in Nigeria but the problem is obtaining the actual and verifiable kinds,” the big million greenback query is this: AS A CRUDE Consumer, HOW THEN DO YOU GET These SELLERS FROM Between THE Whole Lot WHO ARE THE “Real AND VERIFIABLE” Kinds?

THE Crucial? Most professionals, in the scenario of Nigeria, say that fundamentally you (the crude buyer) would have to desire and insist on the purported Vendor demonstrating you Authentic documentation and other proofs of having genuine BLCO and FLCO allocation from the Nigerian NNPC, as effectively as evidence that that solution is still at the moment availability. (For Nigeria, the NNPC, which stands for the Nigeria Countrywide Petroleum Corporation, is a Federal government-owned company that administers the getting and marketing of petroleum, like supplying allocation to legitimate sellers of the crude oil in Nigeria).

THE Important Files IN NIGERIAN CRUDE OIL Acquiring/Marketing Business

There are some essential paperwork that are crucial in the buying of the Nigerian crude oil transactions. They will include the pursuing paperwork, between other individuals:

– Seller’s shipping paperwork, these kinds of as: Cleanse Ocean Monthly bill of Lading Seller’s Commercial Bill
– Seller’s Proof of Item (will comprise the License to Export & the Approval to Export, issued by the country’s government, statement of Availability of the Item, Port Storage Arrangement, and many others)
– SGS/Sayboat Certification of Quantity and Good quality issued at the loading port
– Certification of Origin issued by the NNPC
– Certificate of Authenticity issued by the NNPC
– Charter Get together Arrangement on the vessel, issued to the charterer of the vessel and presumably demonstrating that the vessel is really chartered in the designated Seller’s identify
– the Q88 questionnaire, stuffed out by the administrators of the vessel offering the pertinent details and specs of the vessel
– And so forth.

Proof OF Solution

Most likely the most essential doc of all that a crude purchaser could need to have to see from the seller, is the appropriate Evidence of Merchandise (POP). This doc, which has to be one issued by the proper office of the NNPC in Abuja, Nigeria, serves as a distinct indicator to a crude customer that the proprietor of the oil commodity has real possession of the item, and also serves as an indicator that, at least as at the time of the transaction (but only at that time), the seller has the commodity accessible for sale.

Essential: It should not just be any type of POP, even so. It demands to be one particular that is in a format that will empower satisfactory verification to ascertain that it is legitimate and authentic. Based on this writer’s research, to guarantee the the best possible probability that this objective can be attained, there are essentially two kinds of POP files that are satisfactory, and none others, and only sellers whose POP files meet people “favored” POP documents requirements, ought to be entertained or attended to.

THE POP Need to Satisfy THE Subsequent Conditions.

A). It need to have the Loaded vessel files that are Current (that is, must not be more than two times aged, otherwise the document will immediately be rejected as it might suggest that the vessel is no longer accessible), and should include the subsequent documents:

i. A Current Authority to Board (ATB). Vendor must provide, for the buyer’s inspection, the ATB that was particularly issued to the original buyer (consignee) of the crude in whose name the vessel was issued. The identify on the ATB have to match just with the title on the POP and other paperwork named listed here. And, right here yet again, the ATB Should be Current – that is, it need to be no a lot more than 2 times outdated. (An ATB that is much more than two times aged, ought to be instantly be considered as symbolizing a vessel which is no for a longer time obtainable and hence not acceptable).

ii. Certificate of good quality.
iii. Certificate of origin
iv. Cargo manifest
v. Vessel ullage report
vi. Certification of quantity.
vii. Bill of lading
viii. ATS (Authority to Market) from the NNPC


Usually, ibe kachikwu could require (and that’s why the Seller must be ready and ready to launch them), vessel particulars this kind of as the subsequent: the identify of the vessel, place of the vessel, the IMO name, phone sign and other vessel details. The purpose this is necessary is so the consumer can do the monitoring of the said loaded vessel, and to verify its present availability.


As in the circumstance of the POP which trustworthy buyers’ facilitating outfits like the Trustworthy Dealings Intercontinental demand from any AWR vendor prior to they can start to do organization with them, the other factors that may possibly typically be essential from a vendor, would consist of the subsequent:

= the Lifting Lease/License from the NNPC, and

= the Letter of Authority to Market (ATS) from the NNPC. The Letter of Authority to Offer, also known as a Letter of Allocation, which ought to generally appear from the NNPC’s Crude Oil Advertising Office, is basically the official document which demonstrates the consumer that the vendor truly has the authority from the formal federal government company for the crude merchandise that he is selling. (Have to generally be in a paper format and on NNPC company letterhead must contain the day of situation and expiration day, and be signed. Scanned copies of doc are alright. All documents should be accredited, legitimate, authentic and verifiable.)

= If, for illustration, the vendor statements that the cargo has been cleared, then he ought to normally be capable to supply the CPA (Constitution Celebration Arrangement), the ATL (Authority To Load), and Q88 vessel specifics.


Okay, so let’s say you’ve assembled the proper Evidence of Item and the other essential files this kind of as these that are outlined over. There’s one particular essential, in deed essential, question that even now continues to be for you – how do you guarantee that these paperwork you’ve gotten from the seller are even any good? That they are true, valid, Reliable and Real to warrant your getting the Seller’s offer you critically?

This concern is, maybe, often the most essential for a consumer simply because, as a rule, most fraudsters and con artists who operate in the Nigerian crude oil market, are simply masterful forgers and copiers of every single little bit of the genuine market paperwork that are employed in offering and acquiring functions by refineries and authorities businesses, and who are very expert at the craft. Therefore, buyers are strictly cautious never, at any time to settle for outright at encounter benefit or be ever fooled by, any doc submitted by sellers or claims made by them, however seemingly convincing or genuine-looking!. And what it all implies, is that one particular crucial facility that a crude oil buyer and his aides must speedily develop and have, are some great, idiot-proof, tools or skills by which they can INDEPENDENTLY Confirm the authenticity of at least the key, most important pieces of documents from amongst the tons of documents that sellers and their agents will usually current them in the course of hawking their products. And, previously mentioned all, that they must have the capabilities and the expertise and enterprise sophistication to be capable to detect which ones amongst this kind of documents are authentic and genuine, and which types may possibly be simple bogus.

To be positive, producing such verification and confirmation may possibly typically be problematic for a customer. Even so, it is not truly that tough a activity, at minimum for the schooled and knowledgeable eyes. You only need to know what and what to seem for, the correct questions to ask, and how to counter verify and cross check specifics and info. And, in any scenario, whenever in serious question about the authenticity of a doc, you must constantly get the route of caution – request for a lot more proof, or even reject the provide, depending on the distinct details at concern in an supply.

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