Oil Archives - TODAY INDIA

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.

Create Your Own Olive Oil Line Through Private Labelling

The hype on extra virgin olive oil is real and there’s no sign of it dying down.

As media spurs news about the so-called super food, more and more people are becoming aware of its capacity when it comes to cooking and health.

Aside from the fact that it smells good and tastes delicious, olive oil has a lot of notable health benefits. For one thing, it has anti-inflammatory properties, prevents stroke, and is rich in antioxidants. It can even alleviate the onset of chronic diseases like cancer, diabetes and prevents heart failures.

Right now, more and more studies are being done about it, further proving its healing power. Truly, it is considered one of the important foods nowadays, thus many people are also stimulated to start venturing into business. So how can you start earning through it?

One of the most effective ways to start your this business is to look for a private label olive supplier.

What is a Private Label?

Basically, private label is a marketing strategy that is ideal for those who want to create their own line of product.

By doing so, you can put your own logo, design, and branding. Also, you can control your own pricing, production, and all sorts of other modifications you might want.

It is also cost effective and much cheaper compared to those branded ones. This is a significant advantage for those who are still fresh in the industry. Cheaper prices can potentially lead to a higher profit margin.

Who Can Do Private Labelling?

Basically, anyone who loves doing business and has the passion when it comes to olive oil but doesn’t have the capacity to produce their own that can do private labelling.

There are numerous ways to use it so if you are creative enough you can definitely start your own product line.

Here are some examples:

Hotel

Most hotels use olive oil soap and shampoo in their hotel amenity lines. Luxury hotels also use it as skin essentials as well.

Gift Shops

Extra Virgin Olive oil sets make perfect gifts for those who are health enthusiasts or anyone who loves cooking. Since Biblical times, olives have held a high symbolic meaning and have even been called gold liquid. Moreover, it is a unique gift as well.

Restaurants

Restaurants are the biggest potential market when it comes to private labelled olive oil for obvious reasons. By creating their own product line of it, they do not only add potential income, they are also spreading awareness about their restaurant.

If done right, and in partnership with the right private label olive oil supplier, owning a brand of olive oil can be easily attainable.

Rethinking The Oil Change Business Venture

Annual quick lube survey, is it still viable?

I wish to comment on the Fast Lube Business and the annual survey done by Auto Laundry News, one of the few Industry Magazines for the car wash industry. In this 2001 survey, we see an increase on the number of locations out there. Yet the leader of the Industry is by far Jiffy Lube. We see variations on theme, but we can safely say that Jiffy Lube has adapted best to the American public and their desires when it comes to oil changes.

This survey showed the average customer would drive 5.7 miles to get an oil change. If 50% of the customers would drive 5.7 miles and 80% of the customers usually come from a three-mile radius to get a car wash, I see additional synergy. These car washes with oil lube centers are getting a further reach than the industry average. This is great news for those carwashes adding oil lube bays, but also it takes up space and if not marketed correctly it will not work. The survey was quick to show that oil change facilities do best in middle class areas, not high-end areas. They do poorly in low-income areas. This all makes sense. Free standing car washes were the most likely to have oil lube facilities on there properties. Interesting too is that minimum wage was not prevailing, normally the companies pay $8.00-10.00 per hour. Makes realistic sense and I believe good help starts in this country at $10.00 per hour in most metros and $8.00 hour in rural.

Only 23% of the fast lubes had a website. Only half had internet access in the locations. Average employees were 5 full time and 3 part timers. Luckily for the image of this industry 74% had specific uniforms. The average shop had 3 bays, not enough to do the volume if adequate blitz marketing and community based marketing were taking place. Average revenue was $32.00 per car. That is an awful lot of upselling since the average advertised price that I have noticed is around $19.99. Less than 30% were open on Sundays? Bad mistake since there is no time to change oil and wait in line for most Americans. Average monthly gross was $2,400.00 per month per bay?

This is shit, this is not even a viable business, these people are wasting their time. Think about it, you have cost of oil and filter too and labor? Forget that news. I question the viability of the entire oil change industry. The largest Jiffy Lube franchisee in the country with 180 units was de-listed from NASDAQ and so was another prominent auto care and lube company recently. I like the Kwik-Lube Company and feel they are doing it right, but also question the ROI of such an endeavor seeing these results and the cost to build the building and time to build it. One good thing that the oil lube bays have going for them is the up-sell, but as the consumer dollar gets tighter and the credit card debt gets higher and the fall out rates increase where will this extra impulse revenue and up-sell cash be coming form?

The Industry is still expanding and new entrants to the market place are hurting existing units and I question the saturation point, not on need, but on desire. No one wants to spend money on oil changes, they need to. People buy what they want, satellite TV and beer. Not what they need, so I see a frequency problem issue brewing and people waiting 5-6-7 thousand miles between changes. So I believe that if an oil lube bay is not already attached to another reason to frequent the facility it will soon be in desire straits. The survey also showed that 93% OF THE OIL LUBE BAYS USED ADVERTISING TO GET THEIR CUSTOEMRS? WHY? We do not advertise, word of mouth and happy customers advertise for us. There you go again more cost.

Also 60% of the surveyed said that competition was discounting. HMMM? You have labor costs that are high, frequency is down, new car technology on the horizon, cost of oil going to the big guys and throw in a price war? I see problem as the non-savvy operators leave facilities for sale and exit the market place. By eliminating the facility and going mobile with the existing customer base of let’s say a mobile truck repair business which can co-band and fleet services available you could beat these other companies since they running redline over saturations of mailer coupons and phone book ads and no web sites. Many companies are not watching the changing demographics at their locations and lease or property costs and unable to sell or borrow more due to their lousy profit margins. And what can you convert and Oil change bay into? Cover up the hole for a tire shop? What happens when Hydrogen cell comes and no one changes oil. Can you convert to filter type operation? Not really since often the tires and wheels are offset and will land the modular car into the lube bay hole. We have the solution and we can beat them in almost every aspect. Some consultants have said; “Bunch of dummies copying each other.”

Listen to this part of the survey, advertising dollars were spent on, here is where the respondents said they advertised; TV 15%, Direct Mail 51%, Radio 38%, Newspaper 35%, Bill Boards 18%, Yellow Pages 53%, other only 13%. Scary, all that costs money and everybody is running redline copying each other. This is what happens when people cannot think any longer and cannot adapt and do business at the speed of thought,

[http://www.speedofthought.com]

81% of respondents said they would honor competitor’s coupons? Whatever, why print them then. Let everyone else spend the money and take theirs? 80% said they have tried to use discounting to lure customers from other lube places to theirs. Boy this sounds like the carpet cleaning industry to me.

Breakdown in costs per job. 10% rent or property, 3% maintenance of facility, 26% labor, 30% materials, 4% utilities and many reported expecting that to double and some have already in the west experienced a tripling. Insurance 4% and that to expected to keep rising and some said 8%, Customer claims for damage 1%, this is in-excusable, Advertising 10%. Want to add those up for me. Why are they doing it?

Average new facility costs were; Land $206,000, Improvements $505,000, New equipment $36,000. WOW all that for little or no return? Average number of competitors within 10-mile radius? 36% said 3, 19% said two, 19% said 5, 7% said 5 or more. How can anyone invest this kind of money per location when we can build a couple of units for a total of $65,000 and nearly equal the number of potential vehicles to service? Also with AAA building oil change facilities and Wal-Mart getting into things, the competition will be bloody and that is a lot of money to invest in a business with an uncertain future. Not a good bet, if you were a betting man.

We are very much liking this Industry because we know things the Industry does not and we can slam them because they have missed the boat. We have seen a few companies which are looking into ways to change the oil on the water for yachts. What is even better is that they all missed the boat at the same time and are fighting on shore for a few little boats to get to the ship that is leaving the harbor. Who will survive this oil change war. The one who bests services the customer, they way the customer wishes to be serviced.

Solving Ghana’s Liquidity Problems With Securitisation Transaction Through Oil – A Case Study

Securitisation transaction could be defined as the act of converting an asset into marketable securities typically for the purpose of raising cash.

The concept is based on international market practices involving financial transactions in which an enterprise brings together assets, mostly receivables, and later transferred to a special purpose entity or vehicle, which finances the acquisition by issuing securities.

Securitisation is typically an improvement to the financing of existing business operation.

Securitisation transactions are very popular with mortgage-backed securities; there are currently more non-financial types of assets and future cash flows. The following are examples of assets that can generally be securitised.

Aircraft leases, auto loans(prime and sub-prime),auto leases, boat loans, credit card receivables, equipment leasaes,home equity loans, manufactured housing contracts, marine shipping containers and chassis leases,morgages(residential and commercial).The rest are railcar leases, real estate, recreational vehicle loans, royalty streams, stranded utility costs, trade receivables, train wagons leases, truck loans, oil exploratory, and other future receivables.

Ghana School Financing Facility is Ghana’s first official “securitisation transaction”. It is a structured risk-sharing facility which covers a local partner bank’s initial portfolio of long-term local currency loans to schools. The objective was to help local banks to learn how to make money and contribute to development in the country as well.

The International Finance Corporation (IFC) provides advisory services to the banks to process and monitor the school loans whilst at the same time assisting the local schools with management training and strategic planning to enable the schools operate more like sustainable businesses. This helped to improve their credit risk profile with the banks.

The IFC set up a $2.1million risk-sharing facility with Ghana’s Trust Bank Ltd supplemented by advisory services by IFC and African Development Bank to the Trust Bank and its client schools.

It is expected that The Trust Bank will increase its size and financing to private schools, implement cost-effective, alternative funding mechanism for schools. It will also afford the bank the opportunity to prepare itself for securitisation transaction when the market is ready.

The following gives an insight into an industry for a potential Securitisation transaction in Ghana.

Ghana has a modest upstream oil industry with one onshore and five offshore sedimentary basins. The main drive behind the oil and gas industry in Ghana is the need to reduce the country’s dependence and reliance on hydroelectricity.

The authorities are usually targeting a “primary” budgetary surplus to reduce the overall budgetary deficit and the domestic debt. Oil subsidies have been cut back, but public sector wages have been increased. Nevertheless, the recent computerization of customs should increase tax and public sector revenues, and contain the overall budgetary deficit.

A number of initiatives to boost cassava, textiles and palm oil should increase non-traditional exports while strong prices for cocoa and gold should lead to higher export earnings. High oil prices continue to hurt Ghana. It is estimated that oil imports will make up over 20% of the total import bill, leaving the economy vulnerable to large price swings. Large transfers, IFI credits, donor support and generous debt relief from the Paris Club have brought the external current account deficits at more manageable levels.

Schemes, and reforms, such as increasing low electricity tariffs towards international levels. Since the mid-1980s the Government of Ghana has been financing projects using small levies on petroleum products. The US$ 250,000 raised annually is paid into an Energy Fund and used to promote renewable energy and energy efficient projects.

In Ghana petroleum operations are governed by the Petroleum Law of 1984 which empowers GNPC to operate in all open acreage of the country on its own or in association with foreign partners.

Smaller companies are finding it easier to explore in Ghana than in some of its neighbours in West Africa. This is due in part to advantageous terms of the contract which include the following elements: No front end payments such as signature or production bonuses; negotiable royalties and income tax (currently at 35%); no limit on cost recovery, low rental payments, no restrictions on the repatriation of funds and no import duties on exploration and production equipment and materials…

With securitisation, the GNPC can securitise its rights to receive payments for crude oil sold to other oil refineries. The agreements representing those receivables must be drafted such that anti-assignment clauses in favour of the refineries for example will be beneficial but must not be enforced since in doing so the securitisation cannot go on.Ghana and for that matter Ghanaians must benefit from this black gold.

Reference:

1.Africa -Ghana organising in the informal sector(on line) (accessed 29th April 2006)

2.Ghana Chamber of Commerce Newsletter

3.Ghana Self-assessment (online)available on ghanaembassy.dk/tax/asp.cata.org.my/Ghana1 accessed on 21/06/07

4.Private Sector Development Strategy for Ghana (online) available on dfid.gov.uk/pubs/files/ghana/priv-sect-dev-strategy/ accessed on 21/06/07

5.Securities Exchange Commission annual Report (online)available on secghana.org/publications/annualreport/ accessed on 21/06/07

Top 3 Things You Should Do Before Choosing Your Private Label Olive Oil Supplier

There are many reasons why people are ecstatic about creating their own product line of olive oil.

One reason is its growing market. As people become more aware of the benefits brought by it, the demand is steadily increasing. The fact that you can find olive oil as an ingredient in almost any healthy product, any entrepreneur would really be tempted to join the industry.

Another reason is passion. Health gurus and beauty bloggers are just a few of the people who love olive oil, and incorporating their passion into their business is never a bad idea, right?

So before you start choosing and calling your private label olive oil supplier, here are the top three most important things you should do first:

Study the Market

Regardless if you already own a business or are just starting up, you should study first your target marketplace.

Who would possibly buy it? Can your market afford to purchase extra virgin olive oil? The best customers are those who won’t mind paying a high price as long as the product is worth it. But this is not the only factor you should consider.

Price Competition

Knowing the current prices on the market will serve as your guideline in choosing the right supplier in terms of the pricing of bulk orders.

You can also determine how much profit you can gain, and how competitive you can be in the market. More importantly, since you are creating a privately labeled line, make sure that your price can compete with the branded ones.

Qualify the Suppliers

Truth is, the olive oil industry is quite a small niche, so you will want your product to stand out.

Basically, you can really stand out if you choose the right packaging. Packaging includes the style of the bottle, how much of it you want in a single bottle, and also, the creativeness of the whole packaging concept.

But the question is, can the manufacturer achieve this kind of packaging?

There are a lot of suppliers, but if you think that you can just pick the right one up easily, think again. The right supplier should, above all, catch up on your vision for your products.

For example, the best private label olive oil supplier are those who have sample packages ready but also welcomes their clients’ ideas and desired characteristics. There are even companies that will send a virtual sample for their clients to see how their order will look like. This kind of flexibility gives ultimate freedom for the clients to own their product.

Everybody loves the idea of venturing into the business world, and olive oil is a great product because it is sellable, marketable, and is hot in the market.

However, the roadmap to any venture is not that easy. No matter the how high the hype is, it will still take a lot of research, study, budget planning, and most importantly, the right partner.