INTERNATIONAL PETROLEUM REPRESENTATION

Due diligence

How petroleum buyers can review a seller

Seller diligence is more effective when it follows the transaction’s actual chain of responsibility. Begin with the contracting party and work outward to the product, operators and payment arrangement.

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Establish the contracting entity

Identify the seller’s legal name, jurisdiction, registration and authorized signatory. Check records through an appropriate primary source. A trading name or website can support communication but should not replace identification of the legal party.

Understand the seller’s commercial rights

Ask whether the seller owns the product or has another contractual right to supply it. If a representative is involved, independently confirm the appointment. Keep evidence of commercial rights distinct from evidence of physical stock or technical quality.

Test the physical plan

Identify the actual loading facility, operator and proposed movement. Ask whether the cargo, vessel and timing are compatible with the terminal. Operational confirmation should come from the relevant authorized parties, not solely from a chain of forwarded messages.

Review payments against the contract

The beneficiary, amount, purpose and timing should match the agreed transaction. Independently verify changes to instructions. If a third party is to receive a charge, establish its role and contractual basis rather than assume that a service description proves entitlement.

Keep an exception log

Record missing information and contradictions, the person responsible for resolving each point and the evidence received. A structured exception log makes it harder for commercial urgency to obscure unanswered questions. Material issues should remain open until supported answers are available.

Know when specialist review is needed

Technical, sanctions, banking and legal questions may require different qualified reviewers. The compliance framework is an organizing tool, not a transaction clearance. Use the trade procedure to place verification before the commitments it is intended to inform.

Educational commercial guidance. Verify transaction-specific requirements with the relevant principal, operators and qualified advisers.

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