The basis of a successful transaction: Correct document flow. Sample documents.

When conducting international transactions for the supply of petroleum products, correct and clear document management plays a crucial role. Effective documentation not only ensures the safety and legality of transactions, but also minimises risks and conflicts between the parties. Correctly drafted documents are the basis for guaranteed fulfilment of transaction terms and prevention of possible misunderstandings.

Key forms of documents for petroleum product transactions

Our company provides samples of standard documents and forms required when concluding transactions for the international supply of petroleum products. These documents have been developed taking into account international standards and practices, as well as the specifics of petroleum products trade. We are convinced that their use will help our clients to secure their interests and ensure smooth and efficient transactions.

Transparency and reliability

One of the main principles that guide us in providing sample documents is transparency. We endeavour to provide our clients with full information about each document, its purpose and the rules for completing it, so that they can transact with a full understanding of the process. Our goal is to provide our clients with maximum reliability and confidence in every step of the transaction.

In a separate article we have described the main terms and abbreviations that are used in documents and negotiations during the conclusion and realisation of transactions with petroleum products. You can read this article by clicking here.

Documents used in the process of realisation of transactions with petroleum products can be conditionally divided into three groups:

  1. Documents exchanged between counterparties at the initial stage of co-operation
  2. Documents directly related to the resource itself, confirming its quality and quantity, customs documents, etc., in the process of realising the transaction.
  3. banking documents used in the process of mutual settlements or formation of banking instruments.

Bank documents are developed and standardised by financial institutions, so it would not be correct for us to give advice on their drafting. Also documents directly in the process of realisation of the transaction, related to the resource itself – they are created and issued by the competent authorities of those countries in which the transaction takes place. There are more documents for the resource (goods) and we will analyse in a separate article how they look like, how to check them and what to pay attention to.

Below we want to break down the block of documents exchanged between buyer and seller at the initial stages of launching a transaction. Documents that start transactions with petroleum products.

Samples of documents required to start the negotiation process and launch transactions for the purchase and sale of petroleum products.

Below in the text the documents are arranged in chronological order, as they basically go step by step in the transaction.

1. LOI – Letter of Intent

A letter of intent sent by a buyer to a supplier. A Letter of Intent is intended to inform the supplier of the buyer’s intentions that the buyer intends to purchase a product. The letter of intent is an optional document and does not carry any legal consequences, but fulfils a purely informative function as the first step in establishing contact between buyer and seller. This letter has mainly the following information blocks: Information about the product that the customer wants to buy and the basic terms of the transaction; Data about the buyer’s company – company details and bank details; Date, signature and seal of the authorised person. Sample Document:

2. FCO – Full Corporate Offer

A full corporate offer from a supplier to a customer. Irrevocable offer of the supplier, i.e. the supplier by sending this letter to the customer undertakes to deliver the goods on the terms and prices specified in the offer. According to basic practice, the supplier has no right to change any of the terms and conditions of the offer in the future and accordingly this document has legal consequences, because if the supplier decides to change any of the terms and conditions of the transaction in the future, the buyer can refuse the changes referring to the FCO of the supplier. The offer usually has a certain validity period. This letter has mainly the following information blocks: Name of goods, delivery basis, price, transaction procedure, other features, wishes and requirements of the supplier. Sample document:

3. ICPO – Irrevocable Corporate Purchase Order

Irrevocable Corporate Purchase Order. It is a document similar in essence to a Letter of Intent (LOI) used by a customer to inform about his intention to conclude a transaction with a supplier, only it has more information content, namely – besides basic information about the company and its details, full information about the product, price and delivery basis is added. Also the agreed with the supplier procedure of the transaction is added and basically copies of the company’s constituent documents and copies of the passports of the signatories are added. This document is legally binding. With this document the buyer actually commits to the transaction and in case of unreasonable refusal of the transaction, the supplier can thanks to this document to hold the buyer liable. Sample document:

4. SPA – Sales And Purchase Agreement

A contract for the sale and purchase of a resource. Supply agreement. In normal world practice, any transaction for the sale and purchase of goods is formalised by a contract, so we will not dwell in detail on the importance of signing contracts, but will give a sample of the most common contract for the supply of diesel fuel on CIF terms. Sample Document:


Invoice for payment, commercial invoice. In my subjective opinion, this document is only a formality for customs authorities and banks. In its essence, it duplicates the data that the parties previously described and signed FCO, ICPO and SPA. From the point of view of concluding the transaction, signing of this document by the parties actually means “firing the starting gun” and starting the transaction on supply of petroleum products. Sample document:

6. Documents regulating relations with intermediaries and agents

Historically, the oil products trading market is a market of intermediaries and most transactions are concluded with the participation of various intermediaries who brought together the buyer and seller and organised the transaction. Therefore, there is a whole block of documents, which at the initial stage of the transaction regulates the relationship between intermediaries and counterparties. It fixes commissions, describes the procedure of their payment and protects intermediaries and agents from unfair actions of any of the parties to the transaction.

NCND – Non Circumvention Non Disclosure. Necessity Non Disclosure. The purpose of this document is to protect the agent (intermediary) who wants to receive a commission for connecting the Buyer and the Supplier. Sample Document:

AGENCY AGREEMENT. Agency agreement on payment of commission to an agent (intermediary). Sample document:

JVA – joint venture agreement. A joint venture agreement, or an agreement to conduct business together and create a joint virtual enterprise. In most countries, intermediaries’ commissions cannot exceed a certain amount, otherwise the bank may simply not allow the payment, defining it as a risky operation or illegal withdrawal of excess profits. In practice, in case of large commissions in transactions use this contract format instead of a commission agreement. Sample Document:

You can read this article in other languages:
Русский, Español, 中文 (中国), العربية