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Oil Purchase Agreement

Oil Purchase Agreement Template for Nigeria

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Key Requirements PROMPT example:

Oil Purchase Agreement

"I need an Oil Purchase Agreement for a 12-month contract starting January 2025 between our Nigerian subsidiary as buyer and NNPC as seller, for monthly purchases of 50,000 barrels of Bonny Light crude oil with letter of credit payment terms."

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Document background
The Oil Purchase Agreement serves as the primary commercial document governing the sale and purchase of oil products in Nigeria. It is typically used when establishing a trading relationship between oil producers or marketers and buyers, whether for domestic supply or export purposes. The agreement must comply with Nigerian petroleum regulations, particularly the Petroleum Industry Act 2021 and NNPC requirements. It includes detailed provisions for product specifications, delivery terms, pricing mechanisms, payment security, and risk allocation. The document addresses both commercial aspects and regulatory compliance, including local content requirements, environmental standards, and necessary governmental approvals. This agreement type is essential for structured oil trading transactions in Nigeria and often serves as the foundation for long-term supply relationships in the Nigerian oil and gas sector.
Suggested Sections

1. Parties: Identification of buyer and seller, including registration details and addresses

2. Background: Context of the agreement and relationship between parties

3. Definitions: Definitions of key terms used throughout the agreement

4. Sale and Purchase Obligation: Core obligations of parties regarding the sale and purchase of oil

5. Quality Specifications: Detailed specifications of the oil to be supplied

6. Quantity and Delivery Terms: Agreement on volumes, delivery schedule, and delivery points

7. Price and Payment Terms: Pricing mechanism, currency, payment timeline, and payment method

8. Measurement and Testing: Procedures for measuring quantity and testing quality of oil

9. Title and Risk: Transfer of ownership and risk allocation

10. Warranties and Representations: Standard and specific warranties from both parties

11. Force Majeure: Events excusing performance and related procedures

12. Term and Termination: Duration of agreement and termination rights

13. Compliance with Laws: Obligations to comply with Nigerian laws and regulations

14. Dispute Resolution: Process for resolving disputes, including jurisdiction and governing law

15. Confidentiality: Protection of confidential information

16. Notices: Communication procedures between parties

17. General Provisions: Standard boilerplate clauses including assignment, amendments, and entire agreement

Optional Sections

1. Price Hedging Arrangements: Optional mechanisms for hedging price risk, used when parties agree to implement specific price risk management strategies

2. Letter of Credit Terms: Detailed LC requirements, included when payment is secured by letter of credit

3. Storage Provisions: Terms for storage arrangements, included when seller provides storage facilities

4. Transportation: Specific transportation arrangements, included when seller is responsible for transportation

5. Local Content Compliance: Detailed local content requirements, included for significant long-term contracts

6. Insurance Requirements: Specific insurance obligations, included for high-value or high-risk transactions

7. Environmental Compliance: Detailed environmental obligations, included for environmentally sensitive operations

8. Take-or-Pay Provisions: Minimum purchase obligations, included for long-term supply agreements

Suggested Schedules

1. Schedule 1 - Product Specifications: Detailed technical specifications of the oil products

2. Schedule 2 - Pricing Formula: Detailed pricing calculations and adjustments

3. Schedule 3 - Delivery Schedule: Timing and quantity of deliveries

4. Schedule 4 - Testing Procedures: Detailed procedures for quality testing

5. Schedule 5 - Loading/Discharge Ports: List of approved ports and terminal facilities

6. Schedule 6 - Form of Quality Certificate: Template for quality certification

7. Schedule 7 - Form of Notice of Readiness: Template for delivery notification

8. Schedule 8 - Contact Details: Key contact persons and their details

9. Appendix A - Compliance Requirements: Details of applicable Nigerian regulatory requirements

10. Appendix B - Bank Account Details: Payment account information for both parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Clauses
Interpretation
Sale and Purchase
Quantity
Quality
Price
Payment
Delivery
Title and Risk
Measurement
Testing
Warranties
Force Majeure
Compliance
Environmental
Health and Safety
Local Content
Transportation
Insurance
Liability
Indemnification
Confidentiality
Term and Termination
Assignment
Notices
Governing Law
Dispute Resolution
Anti-corruption
Sanctions
Tax
Record Keeping
Storage
Security
Change in Law
Amendment
Severability
Entire Agreement
Third Party Rights
Counterparts
Waiver
Survival
Relevant Industries

Oil and Gas

Energy Trading

Maritime Transport

Financial Services

Insurance

Logistics

Commodities Trading

International Trade

Relevant Teams

Legal

Commercial

Trading

Finance

Operations

Compliance

Risk Management

Supply Chain

Treasury

Credit

Environmental

Logistics

Business Development

Relevant Roles

Commercial Director

Trading Manager

Legal Counsel

Compliance Officer

Finance Manager

Supply Chain Manager

Risk Manager

Operations Director

Business Development Manager

Contract Administrator

Logistics Manager

Treasury Manager

Credit Risk Officer

Environmental Compliance Officer

Industries
Petroleum Industry Act 2021: The primary legislation governing the oil and gas industry in Nigeria, covering licensing, operations, environmental management, and governance frameworks
Nigerian National Petroleum Corporation Act: Establishes NNPC's authority and role in petroleum operations, including its participation in commercial activities and regulatory oversight
Environmental Impact Assessment Act: Mandates environmental impact assessments for oil-related projects and operations
Deep Offshore and Inland Basin Production Sharing Contract Act: Regulates production sharing contracts and fiscal terms for deep offshore oil operations
Foreign Exchange (Monitoring and Miscellaneous Provisions) Act: Governs foreign exchange transactions and international payments related to oil purchases
Nigerian Oil and Gas Industry Content Development Act 2010: Promotes Nigerian content in the oil and gas industry, including local participation requirements
Companies and Allied Matters Act 2020: Governs corporate operations and business relationships in Nigeria
Contract Laws of the Federal Republic of Nigeria: General contract law principles governing formation, execution, and enforcement of commercial agreements
Central Bank of Nigeria (CBN) Guidelines: Regulations concerning payment terms, foreign exchange transactions, and financial requirements for oil trading
Nigerian Export-Import Bank Act: Relevant for international trade aspects and export financing of oil purchases
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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