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2019

Volume 1, Issue 1

Canton Trading meets the customer value proposition for Sellers, Investors and advisors in commodity trading. Our Oil

Eco-System creates a zero risk environment for investors to export Au from Africa.

CantonTradingOilEco-System

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Table of Contents

Summary of Our Oil Eco-System 3

Buy Oil Sales Procedures and Terminology 4

Russian Oil FOB Procedures for Vessel to Tank 7

Bonnie Light Crude Oil FOB Procedures for Vessel to Tank 8

FAQ’s 9

Contact Us 11

Bonnie Light Crude Oil

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SummaryofOurOilEco-System

We manage the transit of Oil from refineries and Tankers. Once the SPA is signed between the Buyer and Seller

and agents are present to manage the documentation, Dip Test Authorization, Bank approval of the Letter of

Credit also meeting the parameters of the Dip test to proceed with the deal. As required by international law the

transaction inn trade is managed bank to bank.

Sell-Buy Feature The key feature of our product is what we refer to as the eco-system and it is managing the entire value chain from

the Oil in transit by way of Tankers, to the oil refinery and the Tank storage and Dip Testing Authorisation (DTA) at

the storage tank, and providing qualified certification to the Bank before transfer of Oil and transfer and ownership

documents to the Buyer. The major feature of this eco-system deployment is that it totally negates scams and

creates a zero risk environment based on ICC 400/500/600 regulations. We are able to speed up the distribution to

via our online systems to manage the entire documentation to closure in a day. All key players are invited into the

online cloud where they can edit, view or comment and the Table Top Meeting (TTM) can take place anywhere

with any device.

Sell-Buy Experience The key experience is that the Buyer will be able to acquire physical Oil and export without loss and the risk is zero

or concerns regarding security because the procedure is managed bank to bank. There will be no reason to seek

out an alternative. The Seller and Buyer will develop a long-term relationship.

Bonnie Crude Oil Topping Refinery

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BuyOilSalesProcedures&Terminology

The Refinery The refinery receives the Crude Oil and refines to JP54, Gas, Diesel, Fuel, Petroleum Coke, Asphalt, Heavy Fuel Oil,

etc.

POF The Buyer requires a Bank approved instrument LC (MT760, MT103) for payment of the oil product based on the

ICPO.

ICC Governance Governance in terms of all trade is ICC 400/500/600 shall mean:

• All offers received by the Buyer, Trader, Monetize or its Directors/ Mandates/. Operational Staff shall and will be rejected, that does not have a verifiable POP Proof of Product on in the form of Tank Receipts/ FULL SGS

report and not just a back page. Verification and proof of the Bank instruments must be provided by the

issuing (Providers Bank) to the receiving (Monetizer Bank). This will include the buying procedure the ability to

perform the full DIP test on the product for Bank verification.

• Any offer received or presented that requires the NCNDA/ IMFPA ahead of any POP shall and will be rejected.

• It is the responsibility of the Receiver on behalf of the Buyer/ Monetizer, Trader, to make sure that the instrument fits the operating procedures of the Buyer, Monetizer, Trade. THERE WILL BE NO EXCEPTIONS.

• Buyer is required to sign the ICC Warning Letter.

• The mandates may only represent the Buyer or Seller. This is based on fiduciary authority. You cannot represent both a Buyer and a Seller. It is called soliciting and the solicitor will be referred to the FBI, Interpol.

Tank and Oil Procedure The Buyer is required to issue the Letter of Interest on the Buyer’s letterhead signed by the Buyer or person

appointed to act on authority of the Buyer, whose authority will be lodged with the Buyer’s Bank.

Oil is determined by the refinery and no third party.

Storage is a rental of a tank and which requires proof of tank storage by means of a tank storage receipt.

Dip Test Authorisation (DTA) A qualified independent and respected inspection agency such as S.G.S. carries out a series of complex analysis on

the product with specialized equipment and facilities. The DTA test report is issued to the Buyer and the Sellers

Bank.

Important Documents

Buyer and Seller signs and seals the Terminal Contract Agreement (SPA) with full banking coordinates of both

parties and their agents with authority to conduct the POP test, customer information sheet (CIS), company

certificate and signatory passport and the NCNDA/ IMFPA. The signed SPA is lodged with Banks of the respective

parties.

Electronic Signatures

Electronic signatures in South Africa are approved under The Electronic Communications and Transactions Act

(ECTA) instituted in 2002. However an electronic signature is a must if you need to provide evidence in court but

under normal conditions the handwritten signature are treated equally.

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Ownership & Transfer of Oil to Buyer The Oil remains the property of the Seller up to and after the Dip Test Authorisation analysis is sent to the bank,

which then compares the report to the criteria stipulated on the documentary letter of credit (LC). If the report

and other "Presentation Documents" are within the parameters on the LC (MT760, MT103), then it is collected

upon successfully. If the report is outside of the parameters on the LC, then collection is denied. If collected upon

as within the parameters of the LC then the collected oil is successful and the transfer from the Seller to the Buyer

proceed.

Note: Only after the final payment is reflected can the transfer of ownership documents be completed.

Tax Compliance The Buyer is required to export Oil in terms of tax compliance.

Q & Q

Quantity and Quality

ATB

Authority to Board

Ulage Report

Defines ullage as "the amount that a container Tank lacks of being full. In practical use, it can refer to the amount

of empty space in a cargo ship's hull or in an oil terminal tank.

ICPO

Irrevocable Corporate Purchase Order

TSA

Tank Storage Agreement

Clean–on–board Ocean Bill of Lading/Q88 This feature gives you access to basic information using Software as a Solution (SaaS) about the vessels. The fields

included in this feature are: Vessel's name, Date vessel was last updated, Ex-names, IMO number, Flag, Call sign,

Port of Registry, Summer DWT, Type of vessel, Type of hull, Year Built, Registered Owner, Technical Operator, Class

Society.

Financial Instruments

MT103 Is a SWIFT message format used for making payments. MT103 SWIFT payments are known as

international wire transfers, telegraphic transfers, standard EU payments (SEPA payments), LVTS in

Canada, etc.

MT199 Is an Interbank Message Used Between Two Banks To Transmit The Value Of A Bond Or a Skr Or A

Free Format Message Engaging 2 Banks Readiness To Move Forward With A Transaction. Usually a

Private One. A Mt199 Swift Message Is Easily Explained As A “Chat” Message

MT760 Is a message used for issuing or requesting a Letter of Credit or Documentary Credit. Both are a type

of inter-bank message that are used on the SWIFT system so that financial institutions can

correspond

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ASWP

Any Safe World Port

NPC terminal mandate

Nigerian National Petroleum Corporation

NOR

Notice of Readiness

CIS

Customer Information Sheet

Tank Storage Farm

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FAQ’s

What is Crude Oil? Crude oil occurs naturally in the ground and is a complex mixture of organic liquids, formed millions of years ago.

Crude oil varies from oilfield to oilfield in color and composition, from pale yellow, low viscosity fluid to heavy

black “treacle” consistencies. Of little use in its natural state, the value of crude oil lies in its bi-products including

fuels, lubricating oils, waxes, asphalt and petrochemicals.

Crude oil contains a mixture of hydrocarbon compounds and relatively small quantities of other materials such as

oxygen, nitrogen, sulphur, salt and water.

What are the different categories of Oil found worldwide? There are about 161 different types of Oil found worldwide. The different categories of Oil found worldwide is

classified into different types of crude oil like Brent, Dubai Crude, West Texas, Intermediate, etc. Classification is

done according to their sulphur content. Bonnie Light Crude Oil has the lowest Sulphur.

Explain what is OPEC? Organization of Petroleum Exporting Countries is also known as OPEC.

What is the purpose of forming OPEC? It is a collection of countries which produces crude oil and is founded in 1960, in order to regulate the process of

export of their crude oil to the other countries of the world and to decide the crude oil prices. Together OPEC’s 12

member countries supplies about 40% of the world’s oil supply.

Who are the members of OPEC? Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia,

United Arab Emirates and Venezuela.

What is Brent Crude Oil? Brent crude is the most traded of all of the oil benchmarks, and is defined as crude mostly drilled from the North

Sea oilfields

On what basis Crude Oil prices are determined? Crude oil is a commodity, and the prices depend on the demand and supply.

Who controls or decides the Oil prices? OPEC does not decide the crude oil prices, though it influence the market prices. It is following exchange market

that decides global crude oil prices

• New York Mercantile Exchange ( NYMEX)

• International Petroleum Exchange in London (IPE)

• Singapore International Monetary Exchange (SIMEX)

How U.S dollar contribute to the rising Oil prices? On the world market, oil is priced in U.S dollars. So, when dollar becomes weaker, foreign currency becomes

stronger, which means foreign countries can buy more oil at same amount of money. As people in other countries

start buying more, demand rises, and it drives up the price in dollars, which again influence the price of oil in the

global market.

Explain how much do you pay for a gallon of regular petroleum? On a regular gallon of petroleum, you will pay about

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• Crude Oil: About 67% of what you pay goes to the cost of crude oil

• Refining costs and profits: About 14%

• Distribution, Marketing and Retail costs and profits: 8%

• Taxes: Differ from countries

Mention what is the amount of ethanol present in petroleum? Approximately about 10% -15 % of ethanol is present per gallon of petroleum, and it is denoted by E10.

Explain what is PowerShares DB Energy Fund? In the energy commodities, this fund is the most rounded investment in the energy commodities. This fund is

invested in the energy futures contract like heating oil, Brent crude oil, RBOB petroleum and natural gas.

What are the factors that decide the retail price of Petroleum? The petroleum retail price is determined by following factors

• Transportation costs

• Location (Urban/ Rural)

• Average volume pumped

• Competitive mix ( Concentration of major oil companies and independent marketers)

Mention what are the factors that can fluctuate in petroleum price? • Changes to the price of crude oil

• Major supply disruption in any area of the country

• Increased consumer demand

• Expected or unexpected outages of any refinery

• Activity on the commodities market

Who analyse and does research of the Oil and Natural gas supply in U.S? EIA (Energy Information Administration) is an independent agency of the United States Department of Energy,

which gives all the weekly detail or data of the supply of oil and natural gas in U.S. It schedules weekly publications

known as WEEKLY PETROLEUM STATUS REPORT and THE WEEK IN PETROLEUM.

Explain how many gallons of petroleum does one barrel of oil can be made? From one barrel (42 gallons) U. S refineries make about 19 gallons of motor petroleum. The residue yields other

refined products such as distillate and residual fuel oil.

Explain how much do oil companies make on each dollar you spend on gas? Oil and natural gas industry make 8.6% for every dollar of sales.

What are the requirements for importing natural gas, oil and petroleum into the U.S? For importing petroleum or petroleum products to U.S, you don’t need a license to import these items, but you

need to file a form called EIA814 with the EIA (Energy Information Administration).

What is API gravity? API means American Petroleum Institute; it is the main association for the oil and natural gas industry in U.S. The

API denotes about 400 corporations in the petroleum industry and helps to set the standard for production,

refinement and distribution of petroleum product.

How API is calculated? API is nothing but the ratio of its density compare to other substance like water to check the standard of the oil.

The formula to check API is: API gravity = (141.5/ Specific Gravity) – 131.5

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Contact Info:

Web site: www.cantontrading.co.za

Address:

16 Zinwaze Street, Moreleta Park

Pretoria

Gauteng

7151

Email: sales@cantontrading.co.za

Via Google Drive we establish the Table Top Meeting between the Buyer, Seller who can also,

view, comment and edit documents in our online digital ‘cloud’.

Join our LinkedIn group via our web page and send a private message using any device from

anywhere.

Oil Tanker