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SALES AND PURCHASE AGREEMENT FOR NIGERIAN LOW POUR

FUEL OIL ( LPFO)

THIS AGREEMENT IS MADE ON THE 16th DAY OF MAY 2011.

BY AND BETWEEN:

OWNER: NIGERIAN NATIONAL PETROLEUM CORPORATION [NNPC]


SELLER: DEEPSTAR NIGERIA LIMITED LAGOS
The company duly incorporated under the prevailing Laws of the Federal Republic of
Nigeria, hereinafter called the “SELLER” which expression where the context so
admits, shall include their personal Representatives, Heirs, Successors-In-Title,
Agents and Assigns on the one part:

AND

BUYERS: CY FAVOR INTERNATIONAL LIMITED


The company legitimately incorporated in accordance with the existing Laws Republic
of Ghana hereinafter referred to as the “BUYER” which expression where the context
so permits, shall include their personal Representatives, Heirs, Successors-In-Title,
Agents and Assigns on the other part.

RECITALS:
WHEREAS: The Seller with full corporate responsibility and authority do hereby
agrees to source, procure and sell/deliver by means of Transshipment (TTT), the
herein mentioned Petroleum Product and fulfill all the requirements referenced to
herein and shall provide the referenced Product under the terms and conditions as
shall be stipulated hereunder and at the time so agreed by both Parties.

WHEREAS: In pursuance thereto, the Seller hereby makes an irrevocable and firm
commitment to sell and deliver and the Buyer also makes an irrevocable and firm
commitment to purchase and take delivery of the said Product by means of Tanker-
Trans-shipment.

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WHEREAS: The Seller and the Buyer, under full corporate authority and
responsibility respectively represent that the Owner/Seller is a lawful owner of the
commodity, in quantity and quality as hereunder specified and the Buyer has the full
capability to purchase the said Commodity.

WHEREAS: The Buyer desires to purchase Crude Oil of Nigerian Light specification
[hereinafter called “Product”] of Nigeria’s Origin. The Seller has the independent
capacity and ability to source, procure and/or market the Product from the Nigerian
National Petroleum Corporation (NNPC or its official Lifters and to re-sell same to the
prospective responsible and responsive Buyer of record under reference.

WHEREAS: The Seller has accepted to procure/market the Crude Oil from the
appropriate Authorities and re-sell same to the Buyer and the Buyer has accepted to
take delivery of the Products from and make payments to the Seller for Crude Oil
received, in pursuance of the realization of the objectives of this Agreement.

INDEMNITY CLAUSE
Seller hereby expressly declare and warrants that all Products sold and delivered to
the Buyer under this Agreement are free from all encumbrances and not derived from
any illegal/Criminal source; and

The Buyer also expressly declares and warrants that the monies in payment for
Products under this Agreement are free from all encumbrances and shall not rise to
litigation thereafter.

DEFINITIONS:
Except where the context otherwise indicates, the following terms shall have the
meaning as described to them in this paragraph and shall include plural as well as
singular terms.

NNPC: Shall mean Nigerian National Petroleum Corporation.


Agreement: Shall mean the document of the Sales and Purchase Contract
in which these specific provisions agreed upon between
Seller and Buyer forms the terms and conditions of the Sales
and Purchase.
API: Shall mean American Petroleum Institute.
ASTM: Shall mean American Society for Testing and Materials.

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Product: Shall mean and be referred to as the Nigerian Forcados Light
Crude Oil and shall elsewhere in this Agreement be referred
to as “Product” which specifications are as detailed herein.
Cargo: shall mean any particular quantity of the Product loaded into
a vessel as set forth in this agreement which shall include
“Part Cargo”.
Metric ton: Shall mean a volume of forty-two (42) US gallons corrected
for temperature to (60) degrees Fahrenheit; whereas, the
Metric ton is used for calculation to arrive at the exact
quantity traded on.
Day: Shall mean calendar day
Month: Shall mean a calendar month.
Quarter: Shall mean a period of the three (3) consecutive months
commencing on first (1st) January, or first (1st) April or first
(1st) July or first (1st) October, etc.
Loading Port: Shall, in respect of a cargo, mean the Port(s) nominated by
Seller for loading of such cargo in accordance with the
agreement.
Loading Date: The date mutually accepted by both the Seller and the Buyer
as the date on which the nominated international Surveyor
Company has ascertained the quantity and quality of the
product pumped into the Buyer’s designated vessel.
Currency: Shall mean Dollars of the United States of America [US$]
used for payment for Cargo supplied.
Grade: Shall mean any grade of the oil specified in the agreement.
Oil: Shall mean the Petroleum Product as specified in this
agreement.
Party: Shall mean either Seller or Buyer.
Parties: Shall mean Seller and Buyer jointly.
Bill Of Lading: Shall mean the official document, issued at the Load Port
after completion of the loading operations, stating the ships’
loaded quantity, expressed in Cubic Meters [cub meters], in
Metric Tons [MT] expressed as per the above definitions.
This document has to be signed in original by the Ship
Master and made out in accordance with the instructions
hereinafter specified in this Agreement.

Vessel: Shall mean the Ship whether owned or chartered or


otherwise obtained by Buyer and employed by Buyer to
receive the oil at the loading port.

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PROOF OF PRODUCT/ALLOCATION DETAILS:
The Product offered by the Seller and accepted by the Buyer is Nigerian low Pour Fuel
Oil.

ARTICLE 1: PRODUCT SPECIFICATION/QUALITY ANALYSIS


The Specification and Quality of the Product shall conform to the Standard Export Grade
of Nigerian Low Pour Fuel Oil which shall include but not limited to the followings:

Specific Gravity at 150c, kg/1 ASTMD1298/P 0.8397-9.8498


API at 60 Degrees F ASTM Table 51 34 - 37
Salinity ASTMD 4006/1P 358 4.7P.T.B @ 60 Degrees F
Color Dark Brown
BS & W Content [Vol. %] ASTMD 473/1P 53 0.25 Average
Sulfur %WT ASTMD 0.14% wt
Pour Point Degrees F ASTMD 97/1P.15 40º [F] Degrees F
Water Content: 0.2% Vol. Max
REIB Vapour Pressure: 6.52PSIG

ARTICLE 2: QUANTITY AND CONVERSION RATE


2.1 The total contractual quantity of the Product to be loaded and delivered and to
be purchased under this Agreement shall be a single shipment of between four
thousand and twenty five thousand metric tons and/or more as may be required
and affordable by Buyer, with a tolerable variation of +/-10% (plus/minus ten
percent).

2.2 Without prejudice to the foregoing, the Buyer shall accept any additional
shipment/delivery of Product should availability sustain such additional
Consignment.

2.3 CONVERSION RATE – 7.33 bbls

The Conversion rate shall be: QUANTITYin metric tons x 7.33 bbls

ARTICLE 3: DELIVERY TERMS


The contractual quantity to be delivered shall be
Between Five and twenty five Thousand Metric Tonnes +/-10% (plus/minus ten
percent) or more shipment at Seller’s option.

The delivery is scheduled for immediate commencement subject however, to the


degree of readiness, willingness and ability [RWA] of the Buyer.

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ARTICLE 4: CONTRACT DURATION
This contract though spot, may enjoy a life span of 12 calendar months and with possible
rolls and extension provided the spot transaction is smoothly and successfully
consummated and confidence duly registered.

ARTICLE 5: BREACHES
Notwithstanding the terms as contained in Articles 3 & 4. in the case of failure of the
Seller or the Buyer to comply with any of the obligations set forth in this Agreement,
the non-compliance shall entitle the other Party, without prejudice to any other
recourse available to them to consider such failure as a breach of this Contract and to
terminate the same or to unilaterally suspend its performance until such failure or
non-compliance is corrected and may give right to claim direct damages for the
breach; reasonably to the extent allowed by the terms and conditions of the
Agreement

ARTICLE 6: DETERMINATION OF QUANTITY AND QUALITY


6.1 Buyer’s duly nominated Inspectors shall come aboard the receiving pregnant
Vessel either to carry out the Quantity and Quality [Q&Q] Analysis Inspection with
a Certificate thereon and with cost to Buyer’s account.

6.2 The quantity and quality that appears on the Certificate so issued shall be judged
as the final quantity and quality of the oil trans-shipped and the Seller shall use the
same figures to prepare his Commercial Invoice or Payment Instruction for the full
and final payment for Product and Commission respectively.

ARTICLE 7: RISK OF LOSS/DAMAGE AND TRANSFER OF TITLE


Risk of Loss/Damage to Product and Transfer of Title shall be made in favour of the
Buyer as soon as the Quantity and Quality Analysis Inspection is executed and Buyer
makes full and final payment for Cargo and Commission to all Agents and Facilitators as
contained in this Agreement.

With the fulfillment of the above conditions by the Buyer, Seller’s title and responsibility
shall automatically cease and Buyer assumes all responsibilities and title including but
not limited to the attendant risks and/or damages to Product aboard.

ARTICLE 8: INSURANCE
NOT APPLICABLE

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ARTICLE 9: INDEMNITY
Seller expressly declares and warrants that all Products sold and delivered to the
Buyer under this Agreement are free from all encumbrances and not derived from
illegal/criminal sources.

ARTICLE 10: WARRANTIES


Pursuance to the Indemnity as contained in Article 9 above, Seller further warrants
that she has the clear and qualified rights to source, sell or otherwise dispose of the
Cargo as offered to him by his Suppliers which, is the subject matter of this
Agreement and that the Cargo is clear of all liens and encumbrances.

ARTICLE 11: PRICE [SUBJECT TO FLUCTUATION]


The price of each shipment shall be Dated Platt less a discount of $25.

ARTICLE 12A: PAYMENT AND PAYMENT TERMS


12.1 In USD Currency per bbl, by Confirmed, transferable, divisible and irrevocable
bank Guaranty by swift and drawn in favor of the Seller and made matured for
payment within 48 (forty-eight ) international Banking hours from time of
presentation of the discharge certificate & Quality and Quantity Certificate
issued by the Buyer’s Inspection Agency. Cash payment shall be made by
transfer directly to all nominated bank accounts in the sums stipulated therein.
All cash payments are simultaneous.

12.2 Payment shall be the full to the total value of the shipment and in the quantity as
reflective on the discharge certificate & Q & Q Analysis Report Certificate
issued by the Buyer’s Inspection Agency.

12.3 Quantity, as assessed at the discharge certificate and price as contained in this
Agreement, shall be used to compute the Seller’s Commercial Invoice or
Payment Instruction for full and final payment.

12.4 If payment is in naira, buyer shall give to seller a fully funded Bank Guarantee
covering the full amount which shall crystallize into cash upon transshipment.

ARTICLE 13: DEFICIENCIES


If the amount paid under the Bank Guaranty is less than the total price shown on
seller’s Commercial Invoice or Payment Instruction presented to the Buyer to attract
payment for Product sold and delivered, the Buyer shall pay Seller immediately on

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first demand, any such amount herein that are outstanding by Nib’s transfer under
advice.

ARTICLE 14: BANK CHARGES


The Seller shall be responsible for his bank charges and the Buyer, responsible for his
Bank charges relating to this Agreement

ARTICLE 15: TRANSACTION DYNAMICS


15 The Buyer and the Seller sign and seal contract and the electronic copy signed and
exchanged are considered original and acceptable.

16 Seller gives cargo details to buyer, i.e Q88,

17 Buyer issues a Bank promissory Note

18 Buyer gives receiving vessel details.

19 Buyers Supercargo confirms sellers product and remains with product

20 Transshipment take place offshore Tema and payment is made based on out turn
quantity.

ARTICLE 16: LANGUAGE AND APPLICABLE LAW


 This Sales and Purchase Agreement is written and interpreted in English language.
The parties hereby confirm that they have read and understood the terms and
conditions as contained herein and have accepted them as binding on all parties.

 Any dispute arising during the execution of this contract shall be settled amicably.
If however, parties fail to do so, they shall accept as final, the decisions of the
Court of Arbitration of the International Chamber of Commerce and Nigerian Law
shall apply.

 In the event of any dispute arising during the execution of this contract which
dispute is taken to a court of competent jurisdiction, the verdict of the Court shall
be final and binding on all parties hereto,

ARTICLE 17: FORCE MAJEURE

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Neither party to this agreement shall be responsible for breach of contract caused by
acts of God, insurrection, breakdown of refinery operations, civil war, military operations
and national or local emergencies. The parties hereby accept the international provisions
of Force Majeure and hardships published by the International Chamber of Commerce.

ARTICLE 18: NON-CIRCUMVENTION AND NON DISCLOSURE


 The undersigned parties do hereby accept and agree to fulfil all obligations due to
Agents and Facilitators. In the event of direct or even indirect circumvention
through a third party, the circumvented party shall be entitled to a legal monetary
award equal to the maximum service fees it should have realized from the
transaction.

 It is however, pertinent to place on record that the ultimate desire of the Principal
Parties to this Agreement is to register a successfully closed transaction. In the
event therefore, any act of the Agent[s] and/or Facilitator[s] that is detrimental or
capable of frustrating this transaction, shall automatically give the Principal
Party[ies] to this agreement, the right reserved to do whatsoever he or she may
deem fit to do in the circumstance for the survival of this transaction and this
would not be considered a circumvention.

ARTICLE 19: BANKING CO-ORDINATES FOR THIS TRANSACTION


BUYER AND SELLER MAY ONLY CHANGE THEIR BANKS, SUBJECT TO PRIOR
NOTICE GIVEN TO THE OTHER PARTY AND PROVIDED THESE BANKS ARE
ACCEPTABLE TO THE OTHER PARTY.

THERE SHOULD BE NO CONTACT EITHER WITH SELLER’S OR BUYER’S BANK


WITHOUT THE PRIOR WRITTEN PERMISSION OF THE OTHER PARTY.

SELLER’S BANK DETAILS FOR RECEIVING BG

Bank Name: ZENITH BANK PLC


Bank Address TRINITY BRANCH APAPA LAGOS
Beneficiary DEEPSTAR NIGERIA LIMITED
Bank Account No. 6213703369
Accounts Officer MR. KUNLE AKANNI
Tell: TBN
Email Adekunle.akanni@zenithbank.com

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BUYER`S BANKING DETAILS
NAME OF BANK ZENITH BANK GH LTD
ADDRESS PMB CT 393 CONTOMENT ACCRA-GH
Tel. +233 21 6798812 Email; ebusiness@zenithbank.com.gh
www.Zenithbank.com/ghana
SWIFT CODE ZEBLGHAC
ACCOUNT NO 7030600126
BENEFICIARY CY FAVOR INT`L LTD
BRANCH TUDU BRANCH
ACCOUNT OFFICIER ERNEST A
MOBILE PHONE + 233276063400

AGENT/FACILITATOR BANK DETAILS:


NAME OF BANK : ZENITH BANK PLC
ADDRESS : IKOTUN-IDIMU ROAD
ACCOUNT NAME : AOINC NIGERIA LIMITED
ACCOUNT NO. : 6214802123
ACCOUNT MANAGER : MISS OYINDAMOLA
MOBILE PHONE :+234 -01- 4545315

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DECLARATION
The undersigned declare that the foregoing instrument fully sets forth the entire
agreement between the parties and that the signatories below have been fully and duly
authorised to enter into and bind each representative company to the contract.

IN WITNESS WHEREOF the parties hereto declare that they have read and
understood this Contract and are fully aware of the interpretation of all the provisions,
terms and conditions herein and further that they have signed by their hand below,
and have accepted and approved all covenants, terms and conditions of this Contract.

We DEEPSTAR NIGERIA LIMITED hereby with full corporate responsibility


and with the power vested in its Officer, accept, confirm and agree to
abide by this Contract.

SIGNED, SEALED AND DELIVERED BY


THE WITHIN-NAMED “SELLER”

NAME OF COMPANY: DEEPSTAR NIGERIA LIMITED


ADDRESS : NIGERIA
SIGNATURE/CORPORATE SEAL

NAME OF OFFICER : BARR. ADETUNJI A.


DESIGNATION : MD/CEO
DATE : 16th May 2011.

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We CY FAVOR INTERNATIONAL LTD hereby with full corporate
responsibility and with the power vested in its Officer, accept, confirm
and agree to abide by this Contract.

SIGNED, SEALED AND DELIVERED BY


THE WITHIN-NAMED “BUYER”

NAME OF COMPANY: CY FAVOR INTERNATIONAL LTD


ADDRESS : HN S 60 COM 8 TEMA GH

CORPORATE SEAL

SIGNATURE

NAME OF OFFICER : EGBOSI CYPRIAN FAVOUR


DESIGNATION : M/D
DATE : 17th May 2011

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