…To ship, sell crude directly to buyers
By Michael Eboh
The Nigerian National Petroleum Corporation, NNPC, Thursday, said it plans to undertake a review of its approach to crude oil sales, declaring that in the days ahead, it would commence the sale of more of the country’s crude oil on a Cost, Insurance and Freight, CIF, basis.
Fuel tanker Manace
Speaking at the 2017 Annual Asia Pacific Petroleum Conference in Singapore, General Manager, Crude Oil Marketing Division of the NNPC, Mr. Mele Kyari, said the corporation’s decision to review its approach to crude oil sales was to enable it sell directly to customers and ensure security of supply.
Cost, Insurance and Freight, CIF, is a term used in international trade covering both sea and inland waterways, requiring the seller to arrange for the carriage of goods by sea from the port of origin to a port of destination, and also provide the buyer with the documents necessary to obtain the goods from the carrier.
Currently, Nigeria’s crude oil is sold on a Free On Board, FOB, basis, an agreement whereby the seller arranges for the transport of goods to a designated port or other point of origin. Once the seller releases the goods to the buyer, when the goods are onboard the ship, the delivery is considered accomplished.
In FOB, the point at which responsibility shifts from the seller to the buyer occurs when the shipment reaches the point of origin. With a CIF agreement, the seller assumes responsibility and pays costs until the goods reach the buyer’s chosen port of destination. Furthermore, unlike CIF, FOB contracts are not limited to sea freight, and may also be used for inland and air shipments.
By Michael Eboh
The Nigerian National Petroleum Corporation, NNPC, Thursday, said it plans to undertake a review of its approach to crude oil sales, declaring that in the days ahead, it would commence the sale of more of the country’s crude oil on a Cost, Insurance and Freight, CIF, basis.
Fuel tanker Manace
Speaking at the 2017 Annual Asia Pacific Petroleum Conference in Singapore, General Manager, Crude Oil Marketing Division of the NNPC, Mr. Mele Kyari, said the corporation’s decision to review its approach to crude oil sales was to enable it sell directly to customers and ensure security of supply.
Cost, Insurance and Freight, CIF, is a term used in international trade covering both sea and inland waterways, requiring the seller to arrange for the carriage of goods by sea from the port of origin to a port of destination, and also provide the buyer with the documents necessary to obtain the goods from the carrier.
Currently, Nigeria’s crude oil is sold on a Free On Board, FOB, basis, an agreement whereby the seller arranges for the transport of goods to a designated port or other point of origin. Once the seller releases the goods to the buyer, when the goods are onboard the ship, the delivery is considered accomplished.
In FOB, the point at which responsibility shifts from the seller to the buyer occurs when the shipment reaches the point of origin. With a CIF agreement, the seller assumes responsibility and pays costs until the goods reach the buyer’s chosen port of destination. Furthermore, unlike CIF, FOB contracts are not limited to sea freight, and may also be used for inland and air shipments.
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