We at Blackhawk are approached by at least 500 supposed providers and sellers of oil derivative and other crude oil products a year and yet maybe only 2% of such providers have access to real product. Surprised? You shouldn’t be at all.
As you may or may not know, the reality today is that oil buyers are a dime a dozen, real fuel is the issue. The secondary market is for the most part composed of “fake offers” around the world doing a circle jerk on the Internet as people who have the real oil already know where to sell it.
In fact, you can just imagine the number of people who have “allocation contracts” that never get a drop of oil because they don’t pay the people they have to pay to get oil. Allocation holders are not title holders no matter how loudly they protest.
Bottom line:
Our Procedures are very simple and are summarized as per below
1. Seller issues a Full Corporate Offer (FCO) on his letterhead for review and due diligence by buyer along with a satisfactory refinery supply letter including his perivalko agreements or a letter that he has perivalko in place.
2. After satisfactory due diligence by buyer, Seller issues a contract for signing .
3. Buyer signs and returns contract to Seller following contract’s conditions .
4. Seller issues a DLC for one month shipment as contract requires that will revolve for the duration of the contract and upon satisfactory delivery of seller.
5. All necessary Full Proof of Product (POP) is issued by seller for transaction as required by buyer’s bank and agreed on the contract . The DLC paying against documents as stipulated on the contract (SGS, Bill of lading, cargo manifest etc..)
6. Buyer’s bank pays with the (DLC) to Seller’s bank.
7. Transfer of title of product is made by seller’s bank to buyer’s bank and transaction is finalized.
So for all the rookies out there, if you cannot follow those very basic procedures as per the above to the letter, please spare us the wasted time. It will only benefit you and us.
Most importantly, please spare us the Proof of Product (POP) discussion too as it is a totally useless discussion. POP offers no proof at all, because once a POP has been drafted, it is automatically out of date. The product could have been sold to another buyer and no longer exists.
Hope this comes to your full satisfaction and sets the record straight.
Now that you know what are the basic procedures needed to close on oil derivatives related transactions we also hope this should tremendously facilitate our dealings going forward.
Please feel free to share your thoughts
By :Â Ziad K Abdelnour
Ziad is also the author of the best selling book Economic Warfare: Secrets of Wealth Creation in the Age of Welfare Politics (Wiley, 2011),
Mr. Ziad Abdelnour continues to be featured in hundreds of media channels and publications every year and is widely seen as one of the top business leaders by millions around the world.
He was also featured as one of the 500 Most Influential CEOs in the World.
