THE INTERMEDIARY
SO YOU WANT TO DEAL IN CRUDE OIL
AND FUELS
As per FYBR / COFI:
Lets take a look at a Gas oil deal.
So you are FTN exporting and you have received a Gas oil offer from a major Saudi Refinery. You know it’s real because YOU are the one who made the initial inquiry to the refinery. You are taken back at the offer or quote as its seems to be ambiguous and very simply implied.
Gas Oil offer Example.
TO: FTN Exporting
FROM: Shell KSA
Date of Issue 29/7/2010
Validity 10 days
Product : Gas oil 10 ppm Sulphur.
Lifting per Hour In Metric TONS 20,500
Quantity In MT : 100,000 MT per Month . 6 month contract.
Origin Saudi Arabian: FOB
Port KING FAHAD INTERNATIONAL PORT
Price : Med Platts less $25.00 per MT Discount
Specifications: As advised in attachment .
Please advise acceptance, to which a contract will be issued
So you have ostensible authority to buy GAS OIL. You now need to make a offer to sell such oil to and end buyer or intermediaries attached to you for forwarding to end buyers you have sourced or are about to source. You need to prepare an offer as an Intermediary Seller.
From the above basic information you are capable of producing the following offer because you know what you are doing. If you don’t know what you are doing forget about trading -
Go fishing! It’s a more productive option.
© FTN EXPORTING
© SMICE/FTN Exporting : Australian Business Number ABN:B2144654K
AGI: Education Division: Buyers/Sellers ABN:B2043651G
Global Author “International Trade and the Successful Intermediary “
Publisher Ashgate /Gowers U.K
General Mail :P.O Box 468 Carlton North 3054 Melbourne, Australia
Facsimile :(61 03 ) 9347 0003
Direct phone :(61 03 ) Provided on contract issuance
Direct mobile :(613) 0466 349344
E-mail general: davide_ftnexporting@yahoo.com.au
Private end buyers/suppliers e-mail : ftnexportingceo@bigpond.com
Hours of business Tuesday to Saturday 7.00 pm to 1.00 pm AEST
TRADE: www.smice.net AGI: ww.itsi.itgo.com Education: www.ftnexporting.com
COMMODITY BULK SALE OF LOW SULPHUR GAS OIL
SUBJECT TO BUYERS ACCEPTANCE
Offered while stock last on first come first serve basis .
E&O.E
OPEN OFFER
FULL OFFER ISSUE DATE: 29th July 2010
PRINCIPAL SELLER : FTN Exporting Melbourne, Australia.
PRODUCT OFFERED: ULS GAS OIL
RESERVATION OPTION AND OFFER VALID TILL;
3rd August 2010 12.01 PM AEST
| Transaction Code: | 5FTNDPDP112 |
OFFER MADE FOR THE PERSONAL ATTENTION OF;
Registered SMICE Agents www.smice.net
For consideration of End Buyer taking possession of goods.
PRIMARY ORIGIN
SAUDI ARABIA
DELIVERY INCOTERMS 2000 FOB
Eastern province on the Persian Gulf coast of Saudi Arabia
NAMED PORT OF LOADING
Al Jubail KSA
PRODUCT ON OFFER
Unleaded Gasoline RON 95
TOLERANCE FACTORS
MT defines final Metric Ton (Tonne) delivery in where “M3” defines Volume reference only. Payment is for Metric Ton Net Delivery carrying a 10 percent minus or plus Tolerance factor
SPECIFICATIONS
SPECIFICATIONS
Low Sulphur Gasoil 10 ppm
| Property | Unit | Limit | Test Method |
| Acid Number | Total Strong | 2@ mg KOH/g Max 0.1/ Nil | ASTM D 974 |
| Appearance | Clear | Visual |
| Ash | Mass% | Max 0.01 | ASTM D 482 |
| Property | Unit | Limit | Test Method |
| Carbon Residue MCRT on 10% Residue | Mass% | Max 0.2 | ASTM D 4530 |
| Cetane Index | N/a | Min 52 | ASTM D 4737 |
| Colour ASTM | N/a | Max 2.0 | ASTM D 1500 |
| Corrosion Copper Strip 3 Hours at 50 C | N/a | Max 1 | ASTM D 130 |
| Cloud Point CFPP Density at 15 C Distillation 90% recovery Flash Point PMCC Pour Point Particulate Contaminants Sulphur , Total Viscosity at 40 C Water Content | C C kg/l C C C mg/mg Mass% mm2/s %mass | Report Report Min 0.820 Max 0.860 Max 357 Min 66 Max 0 Report Max 10 ppm Min /Max 2.0 5.5 Max 0.05 | ASTM D 2500 ASTM D 5773 ASTM D 6371 IP309 ASTM D 1298 ASTM D 4052 ASTM D 86 ASTM D 93 ASTM D 97 ASTM D 6217 ASTM D 2622 ASTM D 4294 ASTM D 445 ASTM E 203 |
Notes:
(1) Use of flow improver allowed.
(2) Use of Lubricity additive allowed.
| PRICE BASED ON QUANTITY | NON SPOT FUTURE PRICE: FOB |
| ISSUE CONTRACT PRICE | USD$ 632.75 PER MT |
| DLC REVOLVING VALUE | USD$63,275,000.00 |
| QUANTITY ON OFFER | 600,000 MT CONTRACT |
| QUANTITY PER MONTH | 100,000 MT -/+10% |
| FIRST DELIVERY: | OCTOBER 30TH 2010 |
OPENING PRICE : USD$632.75 PER MT FOB
Financial instrument opening value at “Opening Price”
PRICE FORMULATION: INTERNET APPLICATION
(1) Buyer / Seller agrees to use cmegroup.com European Gasoil Platts index (ICE) as per Prior Settle column as per the price taken in the next month after first delivery is indicated , and every subsequent month there after in sequence as taken at offer issue date 12. 01 PM AEST.
(2) CME GROUP SITE ADDRESS
http://www.cmegroup.com/trading/energy/refined-products/european-gasoil-ice-futures.html
(3) INDICATED FIRST DELIVERY DATE
30th October 2010 12.01 PM AEST
(4) CURRENT PRICE
Taken 29th July 2010 for Prior settle price Gasoil Futures index November 2010
USD$656.75 per MT FOB
(5) NEXT PRICE TAKEN
29th of August 2010 for 29th Jan delivery 2011 as taken 12.01 PM or after and in sequence every month there after for all subsequent corresponding monthly deliveries.
(6) INFORMED FIXED DISCOUNT
In where once reading is taken below discount on resulting price shall apply to give final Financial instument collection value for that month of delivery
USD$24.00 per MT FOB
DLC OPENING PRICE BREACH
If price taken for any given month is not covered by the opening value of the buyers accpeted DLC , then buyer agrees to leave DLC intact, and issue a ISBP 98 SLC to the seller to make up any shortfall in a particular months price- such an SLC shall be advised into the account of the seller within 7 days of such a price shortfall becomming apparent.
Should Index indicate price value drop for a particular month. Seller shall collect upon full DLC value amount and return to buyer as per their instruction, the difference in value to a nominated account via SWIFT wire transfer .
PRICING SCHEDULE IN SEQUENCE AS DEFINED WWW. CMEGROUP .COM LISTING
100, 000 MT per month for 6 months . Taken 12.01 PM AEST or after.
| Delivery date | A implied offer Date | As per Price less Discount |
| Oct 2010 Delivery Price | Applied July | as per Nov 2010 Listing |
| Nov 2010 Delivery Price | Applied Aug | as per Jan 2011 Listing |
| Dec 2010 Delivery Price | Applied Sept | as per Feb 2011 Listing |
| Jan 2011 Delivery Price | Applied Oct | as per Mar 2011 Listing |
| Feb 2011 Delivery Price | Applied Nov | as per Apr 2011 Listing |
| Mar 2011 Delivery Price | Applied Dec | as per May 2011 Listing |
Earlier Delivery as apparent allowed.
SELLERS NOTE
Semi Fixed Price offered is at FOB Incoterms 2000 If accpeted within schedule time frame offered and formualtion advised.
PERFORMANCE GUARANTEE
Seller offers LDD (Late delivery discount): Discount USD$1.00 per MT for each late delivered quantities, as a discount applied on Seller’s invoice.
FINANCIAL INSTRUMENT REQUIRED
A top 200 world ranked safe bank bank issued as UCP600 ruling Irrevocable documentary letter of credit issued as non cumulative revolving and transferable with all transferring fee’s for the account of the buyer payable 100% at sight of clean presentation of documents. Partial drawing allowed. 50% of transfer fee returned to buyer as a rebate once each delivery is cleared as direct by the buyer.
DLC opened to support full contract quantity, with revolving shipment value set 3 payments in advance at all times . As one payment collected , credit shall fall back to 2 values , returning to 3 values within 3 days there after , revolving status to decrease on the 4th shipment delivery to 2 , reducing to 1 value corresponding with final delivery . DLC expire date 30 days there after.
Seller will accept a non transferable DLC as per above format, in where such a DLC is issued as confirmed to Sellers bank add $3.20 per MT to price offer , to cover added administration expenses .
(Please apply ‘X” to indicate acceptance of this non transferable DLC ( )
DLC opened within 5 days of contract being accepted. DLC expiration date 8 months from date of issue.
FOB INCOTERMS DELIVERY DOCUMENTS
(a) AT FOB :BOL shall be secured if asked to do so by the seller at buyers further expense- other wise BOL shall be secure by the buyer .
(1) Cert of Origin (Buyers expense. Debit applied on Sellers invoice/ Incoterms )
(2) SGS endorsed PSI certificate of Analysis (Sellers expense /debit)
(3) Sellers invoice all debits/credit applied-
(4) Export permit.
(5) PPI: Policy proof of Interest document declaring exporter of offered goods at name port of delivery .
All documents stamped or marked as original ; as per UCP600. One copy shall prevail as a minimum acceptable bank presenting obligation.
Statutory export taxes, custom taxes, tariffs, and other related unforeseeable or not advised apparent at port of loading, if applicable or become applicable in the future is at the expense of the of the buyer as per normal customary practices.
NORMAL PROCEDURES: ASSUMING CONTRACT IS RETURNED ON TIME
(1) Offer (3 days Validity )
(2) Contract (7 Days Validity )
(3) UCP 600 bank issued DLC advised and accepted.( 5 days after Contract)
(4) Name of ship/ETA/ and ongoing ETA advised to Seller
(5) Loading
(6) Delivery
(7) DLC collection at sight./ Per each clean delivery.
(8) Next delivery initiated in sequence to the first every 30 days .
SPECIAL CONDITIONS
(1) Buyer has 3 days to return this offer as accepted, 7 days to ensure Contract is returned in where 5 days thereafter DLC to pay for goods is to be lodged. If an extension is sought on the offer , then seller will require a buyers performance guarantee ( ISBP 98 SLC ) of USD$ 250,000 dollars to hold the offer and extend such for another 7 days. Such will be credited to favour the buyer upon first delivery or lost to favour the seller if buyer fails to perform after extension is given. Fails to perform defines to mean “Fails to open the required purchase financial insturment on time
(2) Insurance and freight delivery offer if asked to be secured by the seller is a NON negotiable rate. The rates charged to the end buyer will be the specific rates secured by the seller as verified by original invoice. CIF price will be offered if asked for as advised on contract. Whether the end buyer arranges their own vessel /insurance or asks seller to secure vessel and insurance, such matters have nothing to do on whether or not the ends buyer will buy such goods, as freight has to be paid by anyone seeking FOB purchase, no matter the rates charged by either the shipowner or charterer for such freight and insurance. A person buying goods from one country at FOB should already be reasonably informed on what are the standard average freight rates and insurance values are and make a decision to buy any goods offered based on price of goods and not price of freight and insurance.
ACCEPTABLE RULES OF TRADE
UCP600, Incoterms 2000, URC 522, Acceptable Rules of Agency. Contract/offer defines all matters accordingly. English language and Foreign law Governance applies. Partial shipment Allowed. Partial drawing Allowed.Transhipment not allowed.
Matters of offer unclear, contract reference applies ruling directive. Matters of dispute settled via LCIA procedures, Melbourne Australia.
1st January 2011: Incoterms 3000 shall not apply.
NOTES:
(1) Buyer to secure own import permit and be informed of unloading tariffs and taxes.
(2) Please scan offer, print , mark and sign, re make PDF copy an return via e-mail and or Facsimile- First copy to arrive is ruling document. PDF copy issued for clarity.
(3) Offer is legally binding once returned as signed.
SELLERS CONFIRMATION
I, the below seller FTN Exporting Australia ,do here by issue this legally binding offer with good and honourable intent as Seller acting on behalf of disclosed producers Royal Dutch Shell and/or licensed subsidiary or assignee of such as per goods origin . This offer must not be circulated in a manner not inline with the nature of business defined and must remain confidential at all times. FOB offer is made to the end buyer taking possession of goods .The end buy shall make arrangerment to secure their own chartered vessel which will produce the best freight rate, or they may ask the Seller to secure more expensive shipowners freight and insurance rates after FOB offer is accepted . Accordingly , signing of the issued FOB offer as accepted is a legally binding acceptance regardless if freight /insurance is later sought or not. Seller reservse the right not to sell such goods for delivery into Israel nor Iran.
Signed Davide G.A Papa
Date 29th of July 2010
SEAL
DECLARATION: END BUYER :
I, We the below said end buyer accept this offer with good and honourable intent as legally binding once final contract is issued bearing our name . Please issue contract with the following details.
| Name of Import manager accepting goods: |
| Corporate Name of Buyer : |
| Business Registration Number: |
| Postal Address: |
| |
| Fax |
| Web site (if any) |
| Name of Bank issuing DLC |
| Certificate of | YES ( ) | NO( ) |
| Please advise CIF CONTRACT ( ) FOB CONTRACT ( ) |
| Port of Destination: |
| Name of SMICE agent offering goods |
Print Name:
Date:
Copy of Signature:
Seal:
ABOUT THE ABOVE OFFER
(1) So USD$1.00 per MT commission is being sought .
(2) Most of the discount is going to the end buyer
(3) You guarantee and protect commission to who ever secures end buyer from the USD$1.00 per MT you are already attempting to secure
(4) You created your own benchmark applications as it suites you.
(5) You are in full control of the deal - no circumvention possible.
(6) You may need to make many such deals /efforts over many years before one deal finally goes through. Don’t be complacent - Don’t take short cuts.
(7)You don’t care about the supplier contract - so long as it’s fair and reasonable you will sign it ONLY after you have secured the DLC from your end buyer.
(8) Your contract to your END BUYER is provided as per YOUR terms and conditions and has nothing to do with YOUR contract with YOUR supplier
(9) So you have two deals in place - You are the buyer to the supplier and seller to the the end buyer - You are also Principal of Agency to all intermediaries attached to you and of which you are protecting.
“I have secured a Crude oil buyer in USA but I need help to close the deal and secure a Supplier”
Above statement means you have nothing and means you have not studied FYBR nor practised FTN’s FYBR doctrine for any great length of time , because a true practitioner would never ask such a misguided question.
How do I cook a Steak? Now that’s and easy straightforward question to answer.
You want to trade as a professional intermediary , then study FYBR for at least 6 months just to get a feel of things , and perhaps allow another 6 month or more just to get moving in being able to trade effective, let alone sealing a deal - From this point it could take years just to close one deal as per above complex Gas oil deal . You are chasing big money of which will not come easily without knowledge and effort using only effective legally superior acceptable intermediary trading procedures.
How easy is that to explain!
Plenty “Get Rich Schemes” are on the net - Always has been. Offering exporting importing intermediary procedures in where dubious claims are made . ( We have challenged many commission/ sales claims made by intermediaries and lawyers world wide - to which many have not even bothered to give us a reply) We are offering a genuine study application as created by FTN Exporting and its the first doctrine of its kind. After 22 years of preaching FTN exporting is now defined to be the leading intermediary expert on the planet.
How can any other publication make claims to be offering effective genuine uniform intermediary import / export procedures which we have already dismissed. Please don’t ask FTN Exporting on “How to close a deal” type of question. You need to read FYBR intently and study the doctrine before even starting to trade as an intermediary . If you can’t be bothered? Then don’t waste your time- You’ll never close a deal is best implied.
© ftnexporting Educational Services-2008