Oil and Gas Trade Terms: Terms Used in Trading Oil and Gas or Oil and Gas Transaction Terms -

Oil and gas trade terms, terms used in trading oil and gas, oil and gas transaction terms, oil and gas trade glossary, common terms used in oil and gas trade, glossary of terms used in oil and gas trade

Oil and gas trade like every other industry trade has oil and gas trade terms terms used in oil and gas trade. Oil and gas transaction terms are oil and gas trade terms used in facilitating oil and gas trade. These oil and gas trade terminologies can be used before, during or after oil and gas trade. Glossary of terms used in oil and gas trade are parts of the oil and gas industry glossary. This article (which we hope to update if the need arises) will highlight some of the common terms used in trading oil and gas  with particular interest in oil and gas and gas oil products but not oil and gas equipment and machinery.

Oil and Gas Trade Terminologies: Common Terms Used in Oil and Gas Trade

  1. Request for Quotes(RFQs)

    This is used by a prospective oil and gas buyer in requesting quotes for oil and gas or oil and gas products from an oil and gas seller.

  2. Letter of Intent(LOI)

    This is a letter issued by prospective oil and gas buyer to an oil and gas seller that s/he really wants to buy. It is a non-binding document.

  3. Irrevocable Corporate Purchase Order (ICPO)

    It is similar to but not same as letter of intent(LOI) in that it is used by companies in expressing their intents in transacting with a foreign-based company. It provides verification of purchasing terms, banking and financial information of the company.

  4. Authority To Sell (ATS)

    This is a document that authorizes the seller to sell.

  5. Authority To Load(ATL)

    This document authorizes the loading of the product.

  6. Authority To Board(ATB)

    It is permission offered by the captain of a ship to a prospective buyer’s team with the consent of the seller that authorizes the buyer’s team(supercargo team and inspector) to board the vessel to confirm cargo availability, quantity and quality(through dip test).

  7. Proof of Product(POP)

    This is a document that shows there are products and are available for sale by the seller.

  8. Proof of Fund(POF)

    This is a document that shows that the buyer has fund.

  9. Bank Comfort Letter, Bank Confirmation Letter or Bank Capability Letter(BCL)

    This is a letter issued by the buyer’s bank  to the seller’s bank through SWIFT system that shows that the buyer has fund and so capable of meeting up with the financial obligation for the transaction. It is used only as a proof of funds(POF) but not as a guarantee of payment hence can’t be drawn upon by the seller’s bank.

  10. Bank Guarantee(BG)

    It is a banking instrument sent through the SWIFT system which indicates that there are funds set aside(but blocked) by the buyer to make a purchase. It is stronger than BCL yet not an actionable banking instrument(can’t be drawn upon by the seller’s bank) even though it can get a vessel loaded but can’t warrant the seller’s bank to issue a performance bond. It can serve as place holder until there is a final determination of cargo through Q&Q(quantity and quality) test

  11. Quantity and Quality(Q&Q)

  12. Cost, Insurance and Freight(CIF)

    The seller does everything from loading and sending the product to wherever the buyer wants. The seller takes care of the loading and transport of the products to the of destination and give the buyer all the necessary documents to take delivery of the products.

  13. Performance Bond(PB)

  14. Ready, Willing and Able(RWA)

    It highlights the readiness, willingness and ability of the buyer to issue to the seller a 2% performance bond(PB) through his/her bank.

  15. Money Transfer(MT103)

    Standard wire transfer.

  16. Letter of Credit(LC)

  17. Standby Letter of Credit(SBLC)

  18. Documentary Letter of Credit(DLC)

  19. Free on Board or Freight on Board(FOB)

    The seller is responsible till the cargo is loaded i.e the seller pays for transportation of the products to the port of shipment including the cost of loading the products while the buyer pays cost of marine freight transport, insurance, unloading and transportation from the arrival port to the destination port. Hence, there is FOB origin and FOB destination.

  20. Any Safe World Port(ASWP)

    When used as “CIF ASWP” in quotes by the seller, it implies that CIF shipment will cost the same amount for delivery to any safe port in the world irrespective of the distance from the source of oil and gas or oil and gas products.

  21. Tanker Take Over(TTO)

    The buyer takes over the vessel to his/her destination, offloads it and then return the vessel.

  22. Tanker To Tanker(TTT)

    The buyer transfer the product from the seller’s vessel to his/her own vessel.

  23. Non-Circumvention Non-Disclosure(NCND)

    This is a document in oil and gas trade that protect oil and gas trade agent that wishes to earn commission for connecting oil and gas buyers and oil and gas sellers.

  24. Sales and Purchase Agreement(SPA)

    A document that highlights the agreement between the seller and the buyer.

  25. Facilitator

    A person that acts as a middleman and connect oil and gas buyers and oil and gas sellers usually for commission for every successful deal.

     

     

    Classify24 is an oil and gas marketplace to find and list oil and gas offers but also facilitates oil and gas trade through oil and gas marketing as well as acts as oil and gas sourcing agent, oil and gas sales representative and oil and gas broker for oil and gas deals through our local and international network. You can contact us to market or facilitate your oil and gas industry offers whether you are a seller looking for oil and gas buyers, oil and gas product buyers, oil and gas equipment and machinery buyers and oil and service seekers or a buyer looking for oil and gas sellers, oil and gas product sellers, oil and gas equipment and machinery sellers and oil and gas service providers.

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