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Most Oil Sellers and Brokers Fail – Crude Oil Selling Procedures That Sell in Today’s Internet Era

Most Crude Oil And Petroleum Product Sellers, Brokers and Agents, in the International “Secondary” Oil Market, Do Not Make Any Sales Or Income. Do You Ever Wonder Why?

A MAJOR “HIDDEN SECRET” OF OIL SELLERS & BROKERS: MOST DO NOT MAKE ANY SALES or INCOME

Crude oil and petroleum products sellers, and their brokers and agents, who operate in the so-called “secondary market” of the international oil market today, do not usually speak about this, or like to do so. Or like the fact about this to be known. In deed, many of them would rather that it be kept obscured, or simply misrepresented. But, the fact is that one distinctive part of their business “reality” is this: as a group, they frequently close no deals nor make any sales for the oil product they purport to have available to sell, and, in fact, the vast majority of them often go for months, even years, or perhaps for ever, without ever landing even a single sales contract or deal. It is probably what might simply be called “the open secret” of the oil selling industry!

C. Keila Nakasaka, a California attorney and real estate investor and entrepreneur, who conducted extensive market research and investigations into the D2 diesel oil trade to see if he could prudently recommend taking up the commission broker’s job to his clients, says he came away from his research greatly disillusioned and disappointed. According to him, the “stories that these brokers concoct are that the seller has some direct connection with a refinery. Some even claim that the seller is, in fact, one of the leading energy companies in Russia… [but] what bothered me [the most] is that almost every one of these brokers failed to be forthcoming. They often misrepresented themselves as mandates, direct representatives, and even buyer and sellers.”

Probably the principal and most sensitive thing about which most such sellers and intermediaries (the agents, facilitators, mandates, brokers, etc.) are least “forthcoming” and “misrepresenting” about, is concerning the number and volume of sales deals they have ever closed, if any, or the income they have earned in the trade, if any. Simply put, almost all of these operatives generally close no deals, and earn almost nothing. Most of them go for months, even years – or forever – without successfully closing any sales deals, not to speak of earning even a dime in commission income!

As Nakasaka put it, describing his findings: “Another factor which I thought was odd was that most of the brokers I spoke with never closed a D2 deal despite their months and sometimes years in this business. There was one broker who claimed that he had pending deals, and two who stated that they did in fact close these deals. However, I did not find them credible.”

MAJOR REASONS FOR THIS, WHICH ACCOUNT FOR WHY MOST “SECONDARY MARKET” SELLERS & THEIR INTERMEDIARIES NEVER CLOSE ANY DEALS

Why is this so – that they make no sales or income? Many factors account for it. They could roughly be summed up as follows:

1. MOST SELLERS (and their intermediaries) ARE FAKE, ANY WAY, WITH NO CRUDE OR OIL PRODUCT TO SELL

A fact that is by now well-established and not subject to any disputation whatsoever among credible experts in the industry, is that the overwhelming majority of selling offers peddled by crude oil and petroleum product “sellers” in the so-called “secondary” oil markets, and their brokers, agents, and other intermediaries, are fake and bogus. In deed, some objective studies and research have put its extent at a whopping level of some 99.999999 percent of all offers presented for sale. Probably the only thing of much redeeming value that could be stated about this, is that with particular respect to those who act as foreign brokers and intermediaries in the business, some of them may often be engaged fraudulently in the business but innocently and unwittingly, mistakenly believing that the deal or selling operation is authentic and legitimate, when it actually is not.

2.LACK OF PROPER TRAINING, SKILLS OR KNOWLEDGE IN THE FUNDAMENTALS OF THE BUSINESS

Put very simply, perhaps nowhere is the saying that “we live in a wide interconnected world” more applicable today than in the world of the international buying and selling of crude oil and petroleum products. For the most part, virtually all that one needs in order to become a “seller” of crude oil or petroleum product, or his agent, legitimate or not, who are operating out of any part of the world, is simply to have an access to a computer and an Internet connection. That’s just about all! Unfortunately, however, one dire negative effect of this so-called “revolution of the Internet” (among many others), has been that many who now claim to be, or operate as, “sellers” or the sellers’ “brokers” or “agents,” are largely uneducated or semi-illiterate, untrained and unskilled, and are lacking in any knowledge of the proper fundamentals of international oil trading.

Kamal J. Southall, one of the foremost experts on the subject, whose book, “Trade Fraud, Financial Fraud, and the Joker Broker,” is one of the most authoritative texts on the phenomenon, puts it this way:

“Have you noticed that as you’ve searched Google and libraries, and looked high and low, finding bits of information here and there, you encounter interesting phenomena: very little practical information on the art and science of dealing in International trade as an independent trader exists in any comprehensive way. Certain practices, documents, and procedures; mysterious acronyms such as “NCND” or “MPA,” are thrown back and forth, badly corrupted model documents and forms may filter your way, but the reality is that most attempted home based traders, brokers – or, more properly, intermediaries – learn through highly expensive ‘trial and error,’… often re-inventing the wheel each time, in that ever-elusive search for a deal and knowledge on how to close that deal.”

Southall estimates, citing another expert’s calculation, that out of some one million individuals currently trying to make it as brokers or trade intermediaries in the world, “perhaps no more than 1% has the training and skill needed to ever close a deal… [meaning that] the overwhelming majority, are trading blindly, [hence] deals are collapsing… and more to the point, [oil dealers are] being defrauded – sometimes massive..”

Mr. R. Ambardar, a broker of over 10 years of wide experience in international market development and advisory services, calls “lack of experience and knowledge” one of the principal reasons why many brokers and facilitators fail in crude oil endeavors. “Many people are attracted into this business because of [the tales they hear about the] kind of money one can earn on account of successful deals. Many agents fail, [however], to understand that requirements to succeed in this business are very demanding, [and that] Only those who have years of hands-on experience and thorough knowledge of the industry can strive to do well as middle-men.”

A great many number of brokers, Ambardar adds, forget that “To become a ‘Facilitator’ in oil business,… what you actually need is right knowledge and expertise [since this is what will help] you hook up genuine buyers and sellers. One should be in the industry for long to have acquired knowledge related to the dynamics of this business.”

Consequently, one fundamental way in which this general lack of competence or knowledge about the basics of the oil trade manifests itself, is in the inability of the average person among the string of brokers and agents and intermediaries that operate in the trade, to craft good deals and successfully close sales deals even after several months or years in the business.

3. BYE AND LARGE, MOST BROKERS AND AGENTS LEARN THEIR CRAFT FROM THE INTERNET, AND THIS HAS SOME SERIOUS DRAWBACKS

There is, for the average contemporary seller’s agent or broker, one other serious shortcoming and negative consequence that emanates directly out of the fact that the primary source of their education and training by which they learn the workings of the oil trading business, is essentially the Internet. Again, Kamal J. Southall sums up these negative consequences this way:

“The expertise in recognizing a questionable trade lead or tender request from a strong one, is generally lacking through the Internet, [and] there is no critical filtering of the leads you end up reading. Anything that can be put out there, is put out there, from the genuine to the questionable, to the fraudulent. Moreover, the nature of the “broker network” is such that information is often passed about with little critical filtering, lack of knowledge of proper trading procedures and the general tendency of information to become corrupted as it trades hands, [and this] leads to dangerous results.”

4.LONG STRING OF BROKERS, AGENTS AND MIDDLEMEN, MOST OF WHOM UNDERCUT EACH OTHER.

Partly as a result of the virtual lack of any objective requirements for qualification as an agent or middleman in the trade, and the ease of entry into it, these operators generally tend to function in a climate of little or no rules or standards, and of loose or no ethics, in which the “dog eat dog” mentality seem to prevail – a climate in which each broker, agent, or mandate, being only selfishly concerned with just his own personal gains and self-interest, is constantly trying to undercut and circumvent the other in deals. Thus, often leading to the ultimate detriment of ALL the parties involved in an offer, as ALL of them, as a whole, and not just one party or the other, invariably wind up the losers since NO deal at all is had with any buyer.

“[One] reason why it’s difficult to ascertain the truth [concerning the oil product market],” reported C. Keila Nakasaka, the California attorney and entrepreneur who investigated the industry in 2010 for possible recommendation of the trade to his clients, “is that there are multiple brokers involved in any given transaction; and they’re all afraid of circumvention. Hence, it’s almost impossible to know the end buyer or seller. Now, I understand that sometimes it requires teamwork to put a large transaction together, but what bothered me is that almost every one of these brokers failed to be forthcoming. They often misrepresented themselves as mandates, direct representatives, and even buyer and sellers.”

THE “JOKER BROKER” CHARACTER

Sure, admittedly, there’s no question that the phenomenon of having a lengthy string of players, including brokers, agents and intermediaries, in a business transaction, is a necessary aspect of international business. Even more so, especially, in today’s Internet world in which we are all so interconnected globally. Certainly, in oil sales transactions, it should come as no surprise or anything unusual to anyone that such operations, because they often tend to involve huge sums of money and elaborate logistics, would sometimes require teamwork to put the transactions together. And hence, should sometimes involve a multiple number of parties – traders, agents, intermediaries, brokers, mandates, buyers, distributors, etc – to conclude a deal. However, what is different here, is not so much the fact that in the Internet crude oil dealings one encounters a string of too many brokers and middlemen. Rather, it is the fact that most of these brokers and middlemen or intermediaries that get involved in it, typically act and behave in the detrimental manner of what is known as the so-called “Joker Brokers.”

As Kamal J. Southall put it, “But the experience of the underground string of international brokers trading meaningless offers and circumventing each other, left and right, illustrates well the term “Joker Broker” and resembles, often, a Zoo full of monkeys.”

Adding that “the character, [which is] often scorned as ‘the Joker Broker,’ is one thing most people encounter very quickly in their forays into the world of trading,” Southall, the author of a classic on the “Joker Broker” character, gives a definition and explanation of the essence of this “Joker Broker” behavior, this way:

“Defined in the first instance as a bit of a time waster, the joker broker is an individual who knowingly or unknowingly peddles and plies deals and products that, in the vast majority of instances, are non-existent, or badly defined. Characterized by a tendency to bluff his way through transactions, the Joker Broker is one… [who goes about] plying deals often involving a string of brokers from one end of the planet to another, and yet not a single one has verified the very existence of the goods at hand.”

.One significant result of this?

With a multiplicity of brokers and chain of agents often involved in a trade, and each party operating selfishly and undercutting and sabotaging each other in a working environment in which each party is untrusting of the other in a transaction, and is scared of being circumvented by the other; most deals which the “secondary” market sellers and their brokers and agents undertake, are automatically doomed to failure, even from the very beginning. And often do fail.

5. PERVASIVENESS OF “The Joker Broker” MENTALITY AMONG THE INTERNET BROKERS, AGENTS & OTHER INTERMEDIARES

However, probably the most fundamental and central factor which accounts for why most intermediaries involved in the “secondary” oil market are generally not able to, and do not, close any sales deals or earn any income or commission as brokers and agents even after several months or years of peddling their oil product, could simply be condensed into one broad term: namely, the powerful pervasive grip that the “The Joker Broker” mentality has come to have on the brokers and agents, most of whom today are merely Internet-based brokers and agents.

What Is meant by this?

Put very simply, many brokers and agents, driven and limited by the fact that they generally lack much training or knowledge in the fundamentals of international trading, and by the fact, in today’s Internet era, that their only “qualification” for assuming the mantle of being a “broker” or “agent” in the oil business, is simply that they have an access to the Internet and a computer, often behave in their conduct of the oil selling operation, in a manner that “resembles, often, a Zoo full of monkeys” – in the words of Kamal J. Southall, the author of a classic on “‘the Joker Broker” character. A common characteristic of these brokers and agents, is that they peddle, knowingly or unknowingly, crude oil deals and products that on the face of it, are in most instances seemingly non-existent or questionable, or at least badly defined, while yet acting as though all is well with the product they offer, and that there’s absolutely nothing for the prospective buyer to worry about concerning it. They are mostly blinded by greed and false belief that they “are going to be super rich next week or next month” by doing nothing, other than, just shoving around a few copied documents on the Internet usually passed down to them from other jokers, none of which any of them has usually verified as to the very existence of the goods they purport to be selling.

Apart from the fact that a good many of them would, whether they do it knowingly or not, frequently try to push fake deals on the Internet, they generally act out of many misconceptions and beliefs which are simply not true, usually passed down to them from other jokers. Many times, mainly concerned with “making a quick, fast buck,” they are innocently and naively trying to close a deal for someone who they believe or merely hope to be real, but who is, in fact really not. But oftentimes, they are too proud or conceited to simply accept or concede that their own beliefs and procedures are simply incorrect, refuse to change their ways, and continue to waste their time and others’ time for months and years still trying to push deals – until, perhaps, it finally begins to dawn on them that for so long no deals have been closed, or are likely to be closed, and not a dime of income has been, or would be, earned!

But above all else, perhaps the most detrimental factor that results in the lack of business or income for most “Internet” crude oil brokers and agents, is the fact that, lacking much experience or real understanding of the true workings of international business or the way it actually works, they are often totally unrealistic and impractical about the conditions and requirements they demand of, or expect that, prospective buyers would accept in order to buy the products they purport to have for sale. That is, they often present sales offers and proposals that are so impracticable, unworkable and outrageously unreal, and are totally contrary to the way normal and legitimate business has traditionally been done in the real world.

As one analyst put it, “Some of them [the “Internet” brokers or joker brokers] are quite entertaining [in the notions about business workings they present], and remind us of the Nigerian scam artists. The world simply does not work like that.”

EXAMPLE OF JOKER BROKER OFFER THAT CAN’T WORK

The following is a good example of the Joker Broker-type of offer that the oil sellers and their brokers and agents, most of whom operate mostly online today, typically demand of intending buyers. It is presented in the form of the transactions PROCEDURES they demand that the would-be oil buyer should meet and follow, such as these:

TRANSACTIONS PROCEDURES:

1) The Buyer submits ICPO (Irrevocable Corporate Purchase Order) & banking details

2) Seller issues FCO (Full Corporate Offer) on his letterhead with full contact details.

3) Buyer returns the FCO duly signed and stamped.

4) Seller and buyer sign contract.

5) Seller and buyer exchange the Proof of Product (POP) and Proof of Funds (POF) in the following sequence/order:

6). First: Seller issues POP to the buyer. Second: After buyer verification and within 7 banking days, buyer’s bank issues POF to seller’s bank.

7) Buyers bank opens non-operative Letter of Credit (L/C) to seller’s bank/or Bank Guarantee (at seller’s choice).

8) Seller issues 2% Performance Bond (PB) to activate L/C.

9) Shipment commences as per the agreed contract.

TO TODAY’S BUYERS, THIS IS WHAT THESE PROCEDURES ARE SAYING TO THEM

In point of fact, actually the procedures such as the above-outlined, are “standard” and should, in NORMAL and proper circumstances, ordinarily be a workable and acceptable set of terms and conditions or requirements for a credible prospective buyer to do business by. However, here’s what brings about the big difference here: there is one very serious and fundamental factor that is grossly missing here. And that is this: typically, such offer requiring the intending buyer to comply with these procedures, is made, NOT by or from by a known or established or even readily identifiable person or entity, or necessarily by an AUTHENTIC crude seller or supplier. But merely by an Internet “seller.” It is typically presented by someone who merely writes (or phones) and claims, usually via some Internet connection or communication (a portal, email or website), that he is a crude “seller,” or the broker or agent of one, who supposedly has some oil available to sell. And it is typically presented by someone who, invariably, would present virtually no tangible evidence or proof whatsoever establishing his (or her) bona fides and credentials as an authentic seller, or an intermediary of one, nor shows any real track record of having previously performed in the crude oil selling business, or any other products.

Thus, in effect, what is essentially happening here, is that a set of well-meaning procedures which have legitimately been designed by the industry professionals to be used by LEGITIMATE crude sellers, and have traditionally been used by RELIABLE and respectable crude sellers and buyers alike to do business, have suddenly been hijacked by a new breed of “Internet” brokers and agents – Joker Brokers – who now demand that prudent crude buyers are to adopt precisely those same procedures in transacting business with them! To put it another way, were these Internet brokers and crude “sellers” to have been some of the so-called oil Majors – such as Chevron, Valero, Shell Oil, Exxon Mobile, British Petroleum, Total Oil, etc. – meaning companies and business entities that are well-known, already established, readily recognizable, reputable and trustworthy, there would have been absolutely no problem or question about the crude buyers using those “standard” procedures and conditions set forth above in doing business with the Internet sellers and brokers. However, that is not the case all, here. Rather, quite to the contrary, these Internet-type brokers and agents (and the purported sellers whose offers they peddle), are largely Internet-based; and are generally obscure operations, or even non-existent, with no known identity, no recognized base of operations, or established record or history of past performance as crude sellers.

WHY THE INTERNET BROKERS’ PROCEDURES LARGELY DON’T & CAN’T WORK WITH BUYERS

Yet, this is, in the vast majority of instances, the kind of supposed crude “sellers” who want and ask that would-be buyers should be submitting to those same procedures and conditions in dealing with them. Clearly, that’s a ridiculous “Joker Broker” type of day-dreaming – virtually no credible crude oil buyer anywhere in the world would accept to submit an ICPO (Irrevocable Corporate Purchase Order) to a mere unknown, unproven, dubious Internet “seller” of crude oil to solicit business with such an entity. And certainly, no credible crude oil buyer anywhere in the world would accept to submit its Proof of Funds or financial and banking details to such an entity, or to even sign a contract with it – an entity about whom it knows practically nothing, and whose bona fides, credentials or existence as a supposed crude oil supplier, is largely dubious and unestablished.

A major, well-known, recognizable, or reputable entity or crude dealer, yes. But NOT an obscure, dubious, unknown entity, largely existing merely on the Internet.

Analysts at the JokerBroker.com website, which is a site devoted to extensive compilation of a database of the most notorious “Joker Brokers” persons and companies, sums it up this way, describing why most credible crude buyers would generally reject accepting such procedures and conditions often demanded of them by Internet brokers, outright:

“When a deal starts off with “send ICPO with BCL or Soft Probe, [POF], NCND and IMFPA,” this is “broker language.” Those that know broker language know what this means: “I’m a joker broker. I don’t have any real product for sale, and I don’t know anyone who has any, so I want you to give me an Irrevocable Purchase Order with your full financial details disclosed, so I can run around with your order and your money in my hands looking for product, and the next thing you see will be your company and banking details exposed to the whole world, running around unsecured on the Internet between thousands of other joker brokers.”… That is what this language means. I suggest you learn the language, and please do not send me even one “deal” which starts off with this procedure. Please just put them straight into the rubbish bin, which is exactly where I put them whenever anyone sends them to me.”

Kamal J. Southall, author of “Trade Fraud, and the Joker Broker,” describes the following as “some of the most notorious Joker Broker Documents”:

“The Irrevocable Purchase Order/IPO ICPO: Sometimes known as the Irrevocable Corporate Purchase Order, such a document simply does not exist. Or to put things more rudely, the ICPO is crap. There, we have said it, let the chips fall.”

SUMMARY

Here’s what might probably be called “the open secret” of the so-called secondary market oil industry: as a group, the crude oil and petroleum products sellers, and their long string of brokers, agents and intermediaries, generally close no deals nor make any sales or income out of the oil product they purport to sell, frequently after several months, even years, or perhaps for ever, of doing the business. There are several reasons which account for this. They range from the fact that most oil sellers and their brokers and other intermediaries, are fake operatives with no crude or petroleum product to sell, in the first, to lack of proper training and knowledge by these operatives in the fundamentals of the business, to the existence of certain serious drawbacks and shortcomings inherent in the fact that, bye and large, the principal source by which most brokers and agents today learn their craft today as oil dealers, is merely the Internet.

However, probably the most fundamental and most central factor of all which accounts for the above reality, could simply be condensed into one broad term: namely, the powerful pervasive grip that the “The Joker Broker” mentality has come to have on the brokers and agents, most of whom today are merely Internet-based brokers and agents. Typically lacking much experience or real understanding of international business or the way it actually works, and frequently blinded by greed and false belief that they “are going to be super rich next week or next month” by doing nothing, other than, perhaps, simply shoving around a few copied documents on the Internet, the conditions, requirements, and procedures often proposed by the “Internet” brokers and agents for prospective buyers to buy from a seller, are usually unrealistic, impracticable, outrageously unreal, even laughable and ludicrous atimes. They are unworkable conditions and requirements that are completely contrary to the way normal and legitimate business has traditionally been done in the real world. And consequently, credible buyers generally reject outright the sales offers coming from such Internet sales operatives, thus resulting in common lack of sales or commission income for such operatives, month after month, and even year after year.

For example, most of the selling offers one gets today for the sale of oil, are usually from Internet “sellers” – persons who merely claim, via an Internet communication, that they are “sellers” of crude or petroleum products with some product to sell, but typically have NO known identity, show no credible record or history of past performance as an AUTHENTIC crude seller or supplier, nor present any solid evidence that the supposed seller even exists. Yet, these mere “Internet” sellers would typically demand and expect a serious buyer of oil, to simply sign an “ICPO,” and enter into a binding contract with them committing itself to obligations valued in the several hundreds of millions of dollars with such a yet unproven and dubious Internet “sellers” (or brokers and agents), or to submit its most sensitive financial and banking details to them, etc! Demands which, clearly, virtually no credible crude oil buyer anywhere in the world would accept or submit to with merely a dubious, unknown, yet-to-be-established entity! On top of all that, add to that the reality that those harsh conditions are being demanded of intending buyers by the sellers and brokers in an oil industry that is, by all credible accounts, full of too many fakes and fraud in the contemporary oil selling industry!

And so, here you have it: why most supposed “secondary” market Internet oil sellers and their brokers and agents typically make no sales or income in their stint into crude oil and petroleum product selling business today in this Internet era, for months and years.

FOR A FOLLOW UP

WISH TO FOLLOW UP ON GETTING A CRUDE OIL OR PETROLEUM PRODUCTS SELLER OR BROKER WITH WORKABLE, REALISTIC PROCEDURES THAT A CREDIBLE BUYER CAN READILY ACCEPT? Please see the instructional information in the author’s resource box below

Concern About Fraud In Crude Oil Selling? 2 Percent Performance Bond Surest Proof of Genuine Seller

Concerned About Fraud In Crude Oil Selling? Why, for Buyers, getting the 2 Percent Performance Bond by the seller is the Simplest & Surest Proof of a Genuine Seller

Credible research has shown that, while virtually every supposed crude oil seller who goes to a potential crude buyer to solicit business, would almost ALWAYS profusely forswear heaven and earth that he, or the crude oil he professes to be selling, is “absolutely trustworthy, reliable, genuine, authentic, and honest,” virtually every OBJECTIVE, CREDIBLE EVIDENCE available, on the other hand, gives a completely opposite and contrary REALITY – namely, that the overwhelming majority of these supposed sellers and their offers (in deed, up to the level of 99.999999%, according to one report) are totally fake, bogus, fraudulent or not legitimate.

MASTERFULLY FORGED & FALSE DOCUMENTS ARE AT THE HEART OF THE CRUDE/BUYING SELLING SCAM OPERATIONS

The primary instrumentality by which these fraudulent con artists and crude “sellers” operate or perpetrate their con game, is the use of skillfully forged or false documents. Such fraudulent and fake “sellers” – or, at least, the ultimate masterminds who originate and stand behind the scheme – are notorious for being master forgers and excellent copiers of every conceivable legitimate refinery and government agency documents related to crude sales or purchases. In deed, according to experts, so masterful at this game are these fraudsters, that the documents they provide to prospective buyers are often so strikingly convincing and real-looking that they are frequently plain difficult, if not impossible, for almost all but the most skilled of document authentication experts to immediately distinguish from the real and authentic ones.

As one report by the Fraud Watch International summed it up, “Victims [of such fraud] are often convinced of the authenticity of Advance Fee Fraud schemes by the forged or false documents bearing apparently official Nigerian government letterhead, seals, as well as false letters of credit, payment schedules and bank drafts.”

The U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs, in a report titled “Nigeria Advanced Fee Fraud,” describes the documents employed by the Nigerian Advanced Fee Fraud (AFF) or 419 perpetrators, as “official-looking stationery with appropriate government seals, stamps, and signatures,” whose quality, it says, has “evolved over the years, from poorly handwritten letters to more professional products prepared on word processors. Word processors also allow AFF criminals to generate more letters.” It adds that the “AFF criminals include university-educated professionals who are the best in the world for nonviolent spectacular crimes.”

THE MAIN PROBLEM: INABILITY BY BUYERS TO VERIFY SELLERS’ CLAIMS & DOCUMENTS

The point is that, largely in consequence of the above reality, for serious international buyers of Nigerian crude oil, the single most critical and most difficult and risky problem they confront in the open market, is now often the verification and confirmation of the seller’s claims about having an authentic crude allocation and/or its current availability, and the confirmation of the proofs and documents submitted by them in support of those claims. For most buyers, undertaking that task is often dreaded and viewed as something fraught with massive risks and uncertainties that should only be threaded with the utmost caution, and the greatest care and deliberation.

BUYERS’ “PREFERRED” PROOF & EVIDENCE OF CREDIBLE SELLER TODAY – a 2% PB

Because verification and confirmation of such documents from sellers are generally so difficult and dicey, most such international crude oil buyers seek, therefore, to buy ONLY from sellers who can provide them what they consider the safest, most tangible, and most easily reliable kind of proof and evidence of credibility by a seller. And what is this “preferred” proof and evidence that most buyers would rather have? It is simply this – the provision by a seller of a 2% Performance Bond (PB) to the buyer.

THE USUAL VERIFICATION & CONFIRMATION APPROACHES

In a word, the usual proofs and evidence of crude allocation and availability offered by sellers to prospective buyers, is often the provision to the Buyer of the cargo’s PROOF OF PRODUCT or POP. In a C.I.F. or F.O.B deal, for example, the typical manner by which a supposed crude oil seller shows “proof” or evidence to a potential buyer that the Seller has a genuine crude allocation or crude available to sell, is for the seller to provide the buyer the PROOF OF PRODUCT, and the buyer is asked to “verify and confirm” the authenticity of this on his own, and, upon that, for the buyers to issue their Bank Guarantee or Letter of Credit (or other payment instrument) to cover the purchase cost of the product at delivery.

But the problem with this traditional method, is that for most international crude buyers, the average Nigerian seller’s POP (an array of documents that could include the current loaded vessel documents, current Authority to Board (ATB) that was specifically issued to the initial buyer (consignee) of the crude in whose name the vessel was issued, Certificate of quality, Certificate of origin, Cargo manifest, Vessel ullage report, Certificate of quantity, Bill of lading, the Bulk Allocation Details, the Seller’s Authority to Sell (ATS) from the NNPC, etc), is NOT reliable or readily verifiable for genuineness. For example, the POP, which is, in a word, the seller’s main document that’s meant to prove to the buyer that the seller actually has the product being sold, might be showing that an owner of the oil allocation or commodity has possession of the product as of the specific time of the transaction, say, at a certain hour of the day today. But yet, there is no guarantee that the product might not have been sold to another buyer just hours, or even minutes, right after that transaction, and that the commodity is actually still available for sale or delivery to the buyer.

“Most buyers do not accept Nigerian sellers’ proof of product (POP),” says Sam Nelson, an expert in crude buying and selling methods and the author of a primer on the subject. “As a result of this, they (the Buyers) want a tangible (Physical) proof of product. The buyer would request that the seller inspect the cargo and present a verifiable inspection report from accredited agencies like SGS, Q & Q or Robinson International before they (the Buyers) will charter a vessel for the transaction. This is because some so-called Nigerian sellers have false claim over products that never existed and they would forge documents to present as POP. Nigerian market has to be followed very carefully and all documentations thoroughly verified.”

Nelson adds: “Please do not give any inspection money to the seller. Always pay the money directly to the inspection company after they have collected samples of the crude oil from the mother vessel for chemical analysis to confirm the quality and quantity of the crude in the vessel. Also, insist that the ATB (Authority To Board) from the vessel for inspection originated from the captain of that vessel. Do not accept any documents as authentic if you did not verify it from the captain of the feeder vessel. Any documentation from a Nigeria seller must be verified for authenticity.”

MOST DOCUMENTS OR PROOFS BY NIGERIAN SELLERS ARE VIEWED WITH SUSPICION

In deed, nowadays, the same problem of general inability to definitively authenticate genuine crude allocation or availability, now pervades even situations where “tangible, physical” POP inspection has supposedly been made. And some buyers find that even this cautionary advice by Nelson, that the buyers should “insist that the ATB (Authority To Board) from the vessel for inspection originated from the captain of that vessel,” would often not quite work any more in many situations today.

In a TTO deal, for example, the fact of the buyers’ representatives boarding the vessel to make an “inspection” or “confirmation” of the “loaded” vessel, is often no more a guarantee that the transaction is necessarily genuine or legitimate. Nigerian con men and 419ers who operate in the crude oil industry, have been known to work with fraudulent vessel managers and captains or con men disguised as staff of the Shell/JV terminal operators. And Vessels confirmed as “pregnant” (i.e., loaded) even by the buyer’s representatives and his appointed SGS inspectors invited to come aboard the ship on a presumed ship “captain’s” ATB document, have been known to be actually arranged by fake ship operators and ship managers and “captains”; and in such cases the buyer will only be taking over a ship and cargo with FAKE Charter Party Agreement executed between the buyer and fake ship manager, with no AUTHENTIC ship owner’s approval and no authentic shipping documents. And once the buyer’s representatives aboard the vessel confirms that the vessel is “pregnant,” the buyer pays for the cargo, takes over the vessel, and the con men quickly split the money and vanish. The buyer losses everything since the legitimate vessel owner never authorized the captain to issue the CPA, and the essential cargo shipping documents used in the transaction are all merely fake.

Nigeria’s bureaucratic quagmire

And there’s yet another problem involved in trying to authenticate Nigerian crude oil documents. The problem of the bureaucratic quagmire associated with doing business in Nigeria. One expert vastly experienced in doing crude oil buying business in Nigeria, put it this way to this writer: “NNPC Crude Oil Marketing Department, Abuja, is the authoritative source to verify the Authority to Sell document. But you will spend an endless amount of time trying to verify it. As with most Nigerian establishments, people use personal connections to get such documents, but that does not mean that they can deliver.”

WHAT BUYERS NOW VIEW AS THE BEST AND MOST “PREFERRED” PROOF OF AN AUTHENTIC CRUDE SELLER – A SELLER WHO CAN PROVIDE BUYER A 2% PERFORMANCE BOND

In short, the point is that virtually all traditional manners of verification and confirmation of crude oil ownership and availability have become seriously infected and adulterated by con artists and fake operators to the point that many international crude oil buyers regard those methods as largely unreliable, too difficult to verify, and fraught with intolerable risks. And consequently, there has evolved among them what could today be called a “preferred” method for determining an authentic and credible seller of crude oil in today’s market. Such a seller is simply one who can meet one basic requirement – namely, is willing and able to provide the buyer a 2% Performance Bond upfront in a transaction.

What is a Performance Bond or PB?

This is, in a word, an insurance document issued for the seller by seller’s bank or insurance company guaranteeing that the issuer will pay a stipulated amount (a sum amounting, in this case, to 2% of the total value of the cargo being purchased) to the buyer in the event that the seller breaches (fails to perform) the terms and specifics of the contract signed by the seller with the buyer. (The Performance Bond could also be posted in the form of a Cash Bond). The bank or insurance company which issues the PB acts as the responsible “surety” of the bond

If a seller contracts with a buyer to put up a 2% PB – and is able to actually post that bond with his bank or insurance company – the seller is, in a word, guaranteeing the buyer that if he were to fail to perform his obligations under that contract, his bank or insurance company, in their roles as the “surety” of the bond, will pay the buyer a sum amounting to 2% of the value of the crude being purchased, regardless.

WHY BUYERS LOVE THE PERFORMANCE BOND GUARANTEE

Buyers love finding sellers who can provide them UPFRONT 2% Performance Bond, overwhelmingly viewing that as the “preferred” option as they consider that the safest, most reliable, most tangible, and most assured and least fraud-prone kind of proof and evidence of credibility by a seller. Most experts contend that if a seller can offer a 2% PB deal – and, what is even more important, is actually able to post the PB because he has the financial wherewithal to do so – it is almost assured that the seller will not fail the buyer in the actual execution of the deal, but will almost surely perform those obligations as contracted with the buyer.

Sam Nelson, expert in crude buying and selling methods and the author of a primer on the subject, put it this way: “A contract with any of these bonds in place will be successfully completed. A bonded contract has a higher degree of success than a non-bonded contract. A bonded contract is a bankable contract. The players have their money at stake and that is a good reason for them to perform.”

And the Legal Dictionary explains it this way: “The purpose of a bond is to provide an incentive for the fulfillment of an obligation. It also provides reassurance that the obligation will be fulfilled and that compensation is available if it is not fulfilled. Performance Bonds guarantee for the satisfactory completion of a project.”

There are a few specific bases why buyers and experts feel that way:

1. Being able to post a PB is a sign of financial credibility and ability.

To be able to finance an actual posting of a 2% PB (which will mean, for example, at the current crude prices, 2% of, say, $200 million for a 2 million barrels cargo, something amounting to $4 million), a seller would have to have some substantial financial ability and resources.

2. Financial Cost and Penalty Involved In Posting a PB, is a Powerful Disincentive Not to Perform.

Sam Nelson: “The players have their money at stake and that is a good reason for them to perform.” In deed, most buyers, upon getting the 2% PB issuance from a seller, would promptly accept that as equivalent to POP and forgo having to review the POP.

3. The Normal Con Man or 419er Will Not Have the Disposition, the Reputation & Financial Wherewithal to Post a PB.

Robert Strickland of Strickland Associates, an experienced New York dealer in crude oil deals, says as follows: “If you are concerned with FRAUD! ONLY true Sellers that offer a 2%+ Performance Bond are genuine Sellers of Nigeria [crude oil].”

Sam Nelson, the crude oil deals expert and author: “These bonds are necessary to protect the interest of the parties involved for unnecessary losses due to fraud or complete negligence.”

4. Being able to post a PB is a solid indication to a buyer that the Seller has already been vetted.

Obtaining a PB is generally not an easy or automatic thing. Before a bank or insurance company would give a seller a bond, the seller shall have gone through a rigorous application process, and must have met a set of stringent financial and character requirements and conditions. Hence, when a buyer gets a seller who can, and does actually, post a 2% PB, the buyer is almost assured that he’s got a credible seller, and one most unlikely to be a fraudster or a 419er.

For just an example, one Syracuse, New York, insurance company requires applicants for a Public Construction job PB to provide them the following items, among others:

Surety Questionnaire Filled Out Completely

Copy of Contract/Award Letter or Solicitation Letter

Business Financial Statements (2 years audited fiscal year financials) OR

Last 3 years Company Income Tax Returns

Personal Financial Statements and Resumes on all owners of 10% or more

Work in Progress Schedule (if applicable)

Insurance Confirmation

A. Workman’s Compensation

B. Liability Certificate

C. Key Man Policy

Supplier and Contractor Reference Letters

Schedule of Completed Jobs

Bank Reference Letter

Company and Personal Indemnification (GAI we supply)

Articles of Incorporation

Corporate Resolution

Job Cost Breakdown and/or bid specs

IN SUM

To most buyers of crude oil in the international open market, getting an UPFRONT 2% Performance Bond issuance from a seller, is the overwhelmingly “preferred” method for doing a sales/purchase deal. It is the option they consider to be the safest, most reliable, most tangible, and most assured and least fraud-prone kind of proof and evidence of credibility by a seller.

For various reasons and factors, many of which are outlined above, most buyers and experts believe that if a seller can offer a 2% PB deal – and, what is even more important, is actually able to post the PB because he has the financial wherewithal to do so – it is almost assured that the seller will not fail the buyer in the actual execution of the deal, but will almost surely perform his own obligations as contracted with the buyer. Hence, in a deal of that kind the buyer has little or nothing to worry about concerning a potential risk of fraud or scam. In consequence, buyers love finding sellers who can provide them – who can actually post – a 2% PB, and consider that to be the best evidence and assurance of having a credible seller, and one most unlikely to not perform the contract, or to be a fraudster or a 419er

NOTE: As with many things concerning many a Nigerian crude seller, it’s one thing for a seller to claim to a buyer that he’ll post the PB, but quite another thing altogether for the seller to be able to actually do it, or to actually do it!),.

FOR A FOLLOW UP

YOU WANT TO FOLLOW UP ON HOW YOU CAN ASSURE GETTING A NIGERIAN CRUDE OIL SELLER WITH A TRUE, UPFRONT 2% PERFORMANCE BOND? OR SELLER WITH OTHER KINDS OF SALES DEALS THAT ARE GENUINE, “SAFE” AND SCAM-FREE?

INSTRUCTION: You can do so. You can readily obtain the specific basic requirements you’d need to meet in order for you to become automatically considered “proven” as a truly LEGITIMATE seller who really genuinely has some crude to sell. USE THE AUTHOR’S FIVE BASIC OPTIONS PROGRAM.

Just send an email and simply ask for “the FIVE OPTIONS.” CONTACT THE AUTHOR ON THIS ONLY BY EMAIL, PLEASE, at: anosikemo@yahoo.com OR anosike2@aol.com

MORE ON THIS AND RELATED TOPICS ON THE AUTHOR’S BLOG AT: http://www.affordablebankruptcy.blogspot.com/

Fraud in Nigerian Crude Oil Selling: Authenticating The Crude Allocation and Documents by Oil Buyers

HOW DO YOU ASSURE THAT A NIGERIAN CRUDE OIL SELLER’S ALLOCATION OR DOCUMENT IS AUTHENTIC OR GENUINE?

This observation by the research report on the subject, done by the Africans in America News Watch, a New York based non-profit organization, in August 2010, sums up the issue:

“There are many genuine crude oil sellers in Nigeria but the problem is getting the real and verifiable ones. Crude Oil trade is a booming and thriving business and many people seem to want to go into it. Buyers from other countries contact sellers in Nigeria in order to buy Nigerian Crude Oil. [But the business is now full of]… scammers on the prowl.” It adds that “There are lots of crude oil sellers in Nigeria, but the challenge there is the ability to find genuine and verifiable sellers.”

In point of fact, as this author has amply documented elsewhere in another study, the assertion that in the arcane world of international crude oil buying and selling today the landscape is literally littered and crawling with fraudsters and scammers, is now a well-established, well-settled truth about which there can hardly be any serious argument or disputation in the contemporary international oil buying and selling industry.

In consequence, given that stark REALITY that “there are many genuine crude oil sellers in Nigeria but the problem is getting the real and verifiable ones,” the big million dollar question is this: AS A CRUDE BUYER, HOW THEN DO YOU GET THOSE SELLERS FROM AMONG THE WHOLE LOT WHO ARE THE “REAL AND VERIFIABLE” ONES?

THE KEY? Most experts, in the case of Nigeria, say that basically you (the crude buyer) would have to demand and insist on the purported Seller showing you AUTHENTIC documentation and other proofs of having genuine BLCO and FLCO allocation from the Nigerian NNPC, as well as proof that that product is still currently availability. (For Nigeria, the NNPC, which stands for the Nigeria National Petroleum Corporation, is a Federal government-owned company that administers the buying and selling of petroleum, including giving allocation to genuine sellers of the crude oil in Nigeria).

THE KEY DOCUMENTS IN NIGERIAN CRUDE OIL BUYING/SELLING INDUSTRY

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

– Seller’s shipping documents, such as: Clean Ocean Bill of Lading; Seller’s Commercial Invoice

– Seller’s Proof of Product (will comprise the License to Export & the Approval to Export, issued by the country’s government, statement of Availability of the Product, Port Storage Agreement, etc)

– SGS/Sayboat Certificate of Quantity and Quality issued at the loading port

– Certificate of Origin issued by the NNPC

– Certificate of Authenticity issued by the NNPC

– Charter Party Agreement on the vessel, issued to the charterer of the vessel and presumably showing that the vessel is actually chartered in the designated Seller’s name

– the Q88 questionnaire, filled out by the managers of the vessel providing the relevant information and specs of the vessel;

– Etc.

PROOF OF PRODUCT

Probably the most important document of all that a crude buyer may need to see from the seller, is the proper Proof of Product (POP). This document, which has to be one issued by the appropriate department of the NNPC in Abuja, Nigeria, serves as a clear indication to a crude buyer that the owner of the oil commodity has true possession of the product, and also serves as an indication that, at least as at the time of the transaction (but only at that time), the seller has the commodity available for sale.

IMPORTANT: It should not just be any form of POP, however. It needs to be one that is in a format that will enable satisfactory verification to ascertain that it is valid and authentic. Based on this writer’s research, to ensure the optimum likelihood that this goal can be attained, there are basically two types of POP documents that are acceptable, and none others, and only sellers whose POP documents meet those “preferred” POP documents standards, ought to be entertained or attended to.

THE POP MUST MEET THE FOLLOWING CONDITIONS.

A). It must have the Loaded vessel documents that are CURRENT (that is, must not be more than 2 days old, otherwise the document will immediately be rejected as it may mean that the vessel is no longer available), and should include the following documents:

i. A Current Authority to Board (ATB). Seller must provide, for the buyer’s inspection, the ATB that was specifically issued to the initial buyer (consignee) of the crude in whose name the vessel was issued. The name on the ATB must match exactly with the name on the POP and other documents named here. And, here again, the ATB MUST be CURRENT – that is, it must be no more than 2 days old. (An ATB that is more than 2 days old, should be automatically be viewed as representing a vessel which is no longer available and hence not acceptable).

ii. Certificate of quality.

iii. Certificate of origin

iv. Cargo manifest

v. Vessel ullage report

vi. Certificate of quantity.

vii. Bill of lading

viii. ATS (Authority to Sell) from the NNPC

B) PROVIDE THE PARTICULARS OF THE VESSEL.

Generally, the Buyer may require (and hence the Seller must be willing and ready to release them), vessel particulars such as the following: the name of the vessel, location of the vessel, the IMO name, call sign and other vessel details. The reason this is required is so the buyer can do the tracking of the said loaded vessel, and to ascertain its current availability.

C) PROVIDE THESE DOCUMENTS, ALSO, FROM THE NNPC

As in the case of the POP which reputable buyers’ facilitating outfits like the Reliable Dealings International require from any AWR seller before they can begin to do business with them, the other things that may often be required from a seller, would include the following:

= the Lifting Lease/License from the NNPC, and

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

= If, for example, the seller claims that the cargo has been cleared, then he should usually be able to provide the CPA (Charter Party Agreement), the ATL (Authority To Load), and Q88 vessel details.

ALRIGHT, BUT HOW DO YOU ASSURE THAT THESE DOCUMENTS ARE AUTHENTIC?

OK, so let’s say you’ve assembled the proper Proof of Product and the other essential documents such as those that are outlined above. There’s one key, in deed critical, question that still remains for you – how do you assure that these documents you’ve gotten from the seller are even any good? That they are real, valid, AUTHENTIC and GENUINE to warrant your taking the Seller’s offer seriously?

This question is, perhaps, often the most critical for a buyer because, as a rule, most fraudsters and con artists who operate in the Nigerian crude oil industry, are simply masterful forgers and copiers of every bit of the legitimate industry documents that are used in selling and buying operations by refineries and government agencies, and who are highly skilled at the craft. Consequently, buyers are strictly wary never, ever to accept outright at face value or be ever fooled by, any document submitted by sellers or claims made by them, however seemingly convincing or real-looking!. And what it all means, is that one crucial facility that a crude oil buyer and his aides must quickly develop and have, are some good, fool-proof, tools or skills by which they can INDEPENDENTLY VERIFY the authenticity of at least the key, most significant pieces of documents from among the tons of documents that sellers and their agents will often present them in the course of hawking their products. And, above all, that they must have the skills and the knowledge and business sophistication to be able to detect which ones among such documents are genuine and legitimate, and which ones might be plain bogus.

To be sure, making such verification and confirmation may often be problematic for a buyer. However, it is not really that difficult a task, at least for the schooled and experienced eyes. You only need to know what and what to look for, the right questions to ask, and how to counter check and cross check facts and information. And, in any case, whenever in serious doubt about the authenticity of a document, you should always take the path of caution – ask for more proof, or even reject the offer, depending on the particular facts at issue in an offer.

FOR A FOLLOW UP

YOU WANT TO FOLLOW UP ON HOW YOU CAN ASSURE THAT A NIGERIAN CRUDE OIL SELLER’S ALLOCATION OR DOCUMENT IS AUTHENTIC OR GENUINE?

Please see the instructional information in the author’s resource box below

Buy and Sell Crude Oil – Most Profitable Way to Do It

There is a profitable way to buy and sell petroleum. There are four major things you will need in order to succeed from this business. They are namely:

1. Funds: you will need funds to buy petroleum. You will need a minimum of $100,000,000 US. The amount of money can get you up to 2 million barrels of petroleum. You will also need about 5 to 10 million USD for expenses.

2. Petroleum seller: you will need a crude oil seller or supplier where you can purchase the petroleum from. This one is not a major problem as long as you have the funds.

3. Tanker: you will need a tank where you will be able to store the crude oil. If you want to build a petroleum storage tank, then you may as well rent one. This one is going to be costly, so it is better for you to build your own tank and save cost.

4. Petroleum buyer: this one is also not a major problem. The reason is because they are many buyers of crude oil aggressively searching for available crude oil to buy mainly in USA and Europe. As long as cars and factories are concerned, crude oil will always be in high demand.

The idea to make lots of money from buying and selling crude oil is to buy crude when it is very cheap and sell it when it is expensive. That is you will buy it when the price is low and sell it when the price is high. You will need to buy a piece of land and build the crude oil storage tank that can be able to store as much crude oil as you want. The crude oil storage tank could be an underground tank or surface tank.

Once you have finished building a storage tank, the next step is to buy petroleum. If you have funds at hand building storage tanks that can store up to 2 million barrels of petroleum or as much as you want will not take more than 2 months. The next step is to find petroleum available for sale. This will be an easy process if you know where to look. You can start to source for crude oil available for purchase at oil producing countries. You will be able to buy them through this means for cheap rather than when you do so through resellers.

There are two ways to get petroleum from Nigeria. One is through getting oil allocation from NNPC. NNPC fully means Nigeria National Petroleum Corporation. It is a government agency responsible for selling and buying of crude oil. You will need:

1. Proof of up to $100,000,000

2. Performance bond of up to $1,000,000

3. You will be required to own a local oil refinery, international refinery and a major oil trader.

If you are not ready for these conditions, then you can buy from persons who have already gotten oil allocation. People who have got oil allocation from NNPC must always end up selling the petroleum they have purchased. You can buy from this set of people. Example of this type of oil trader to buy your crude oil from is Yamal Gas Progress etc.

Once you have found a seller, the next step is to negotiate and close a deal. There are four ways used for selling petroleum. They are namely FOB, TTT, TTO, and CIF. CIF means cost, insurance and freight. It is a method of selling petroleum where the seller does everything from loading and sending the crude oil to the place the buyer wants. This kind of method is usually hard to fit and most sellers do not like dealing this way. FOB fully means freight on board.

The most widely method used method for selling oil is TTO and TTT. TTO simply means tanker take over. In this method, the buyer takes over the vessel to his destination, offloads the crude oil and brings it back.

TTT simply means tanker to tanker. It requires the buyer to come with a tank while the oil is transshipped and everything is settled.

Payment for the product is usually through swift or wire transfer. This can either be done through bank to bank by means of MT799. Irrevocable of letter of credit may also be used for payment etc.

Once you have bought the product, transfer the crude to your storage tank and relax. Continue to monitor the price of oil to see when it will increase. Conflicts between Iran and USA, and USA and Iran, and the one between South Korea and North Korea, and North Korea and the rest of other countries can cause the price of petroleum to increase. Conflicts in Niger Delta of Nigeria and Middle East as a whole can also cause the price of crude to skyrocket. Disasters like Hurricane in the Gulf of Mexico and surrounding cities in USA along the gulf may also increase the price of oil.

Once the price of crude increases, it is time to sell it off. If the price of a barrel of crude was at $78 and it increased to $100 or more, I believe you know how much you would have gained. Let say all the expenses you made and the price of a barrel of petroleum stands at $70 per barrel, then crude oil increases to $100 and you sell it off. The amount you will gain becomes $30 times 2,000,000 which will give you $60,000,000. This is cool bucks to make in a day. The way to find buyers for your petroleum is to write a letter with your company letterhead and POP (proof of product) to oil refineries. State the price you want to sell per barrel and anything to convince the oil refineries to buy your petroleum. This is tested and proven to deliver profitable type of oil trading.