Oil Brokerage Workflow
Buyer issues ICPO (Irrevocable Corporate Purchase Offer) with Seller’s procedures
incorporated in the ICPO along with Buyer’s company registration and RWA (Ready Willing and
Able) letter, or equivalent, with support and documents from Buyer’s bank.
Seller issues Sales Purchase Agreement (SPA) that is open for amendment for Buyer to review
and provide signatory.
Upon receipt of the signed SPA, Seller registers a hard copy of the contract and sends the
partial PPOP (Partial Proof of Product) documents to Buyer as listed:
a. Seller’s Irrevocable Commitment to supplying the buyer;
b. Statement of availability of the product;
c. Certificate of origin;
d. Commercial invoice for the first value shipment;
e. Tank receipt;
f. Product Passport (Analysis Test Report);
g. Refinery Registration Certificate.
Upon the confirmation of the listed partial PPOP:
a. As a guarantee, Buyer’s bank issues an irrevocable, non-operative, nontransferable,
indivisible letter of credit (DLC/MT700) according to the Refinery’s fiduciary bank verbiage to the
Refinery’s nominated fiduciary offshore bank account to cover part of the shipment;
b. Should Buyer fail to issue payment instrument within seven banking days, Buyer will make a
cash deposit of USD XXX,XXX by TT wire transfer for security guarantee to enable Seller
charter vessel and commence shipment. This payment will be deducted from the total cost of
the product after inspection at the discharge port, or legal action will be taken against the Buyer
for default.
Seller’s bank will reciprocate with a 3% Performance Bond (matching Buyer’s DLC) to activate
the letter of credit issued by Buyer’s bank. Seller’s bank gives Full POP Documents to the
Buyer’s Bank alongside Performance Bond. (PB%): - Copy of:
a. License to export;
b. Approval to export;
c. Statement of availability of the product;
d. Refinery’s commitment to produce the product;
e. Transnet contract to transport the product to the loading port;
f. Port storage agreement;
g. Charter party agreement to transport the product to the discharge port;
h. Vessel Questionnaire 88;
i. Bill of Lading;
j. SGS Report at loading port;
k. Dip test Authorization (DTA) & ATB;
l. NOR/ETA;
m. Certificate of Ownership Transfer.
Shipment commences according to the signed contract delivery schedule, and the shipment
should arrive at Buyer’s discharge port within 5-24 days. Seller will bear the SGS inspection at
the loading seaport and Buyer at the unloading seaport.
Buyer’s bank upon arrival of the cargo at the discharge port, payment will be made for the
product by Buyer via TT MT103 100% after (Q&Q) or CQI report Inspection at Discharge port.
Upon receipt of the signed SPA, the Seller registers a hard copy of the contract and sends the
below listed partial Proof of Product documents to the Buyer
Seller Irrevocable Commitment to Supply
Statement of availability of the product
Certificate of origin
Commercial invoice for the first value shipment.
Tank Receipt.
Product Passport (Analysis Test Report).
Refinery Registration Certificate.
