Petroleum trading glossary

The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment. Risk transfers to the buyer once the cargo is loaded. The buyer handles freight, insurance and unloading. Common for large tanker parcels where the buyer has a chartered vessel ready.

The seller pays the cost and freight to bring the goods to the named destination port. Risk transfers to the buyer when the cargo is loaded at the origin port — the seller pays the freight but bears no risk during the voyage. Insurance is the buyer’s responsibility.

Like CFR, but the seller also pays for marine insurance covering the buyer’s risk during the voyage. The most common Incoterm for petroleum cargoes landed at Douala, Limbé or Kribi because it simplifies documentation: seller ships, seller insures, buyer just needs to have the DLC open at the discharge port.

The seller delivers the goods, ready for unloading, at the agreed place inside the buyer’s country. The seller bears all risks and costs except import clearance. Used for inland CEMAC deliveries by truck or tank wagon, e.g. Bangui, N’Djamena, Bata.

Not a formal Incoterm but a widely used industry term: the cargo is already in a storage terminal (e.g. SCDP Cameroon, Tradex) and the buyer takes delivery directly from the depot. Fast settlement for marketers needing immediate stock; paperwork is a depot release order plus proof-of-funds, not a tanker voyage.

A payment instrument issued by the buyer’s bank, committing the bank (not the buyer directly) to pay the seller once a defined set of documents (bill of lading, certificate of quality, certificate of origin, etc.) is presented compliant. The industry gold standard for petroleum transactions because it removes counterparty risk once confirmed.

A payment undertaking that is only called on if the primary payment obligation fails. Acts as a back-up guarantee rather than a primary payment instrument. Often used alongside a DLC for structured transactions or to secure long-term supply contracts.

Society for Worldwide Interbank Financial Telecommunication — the secure messaging network banks use to exchange payment and trade-finance messages (MT700 for DLC issuance, MT760 for guarantees, etc.). A genuine SWIFT MT700 arrives via the advising bank, never in your inbox as a PDF.

The buyer’s bank sends a short confirmation that the buyer has the financial standing to fund the proposed DLC. Not a payment itself — merely evidence the transaction can proceed. Legitimate POBs come from the bank’s trade-finance desk, not the buyer.

The process of verifying each counterparty’s legal identity, ownership structure, regulatory authorisations and banking references before any commercial engagement. In petroleum, both sides exchange KYC packs symmetrically — asking only for the other side’s documents without giving yours is a red flag.

A report issued by an independent inspector (SGS, Cotecna, Bureau Veritas, Saybolt, Intertek) certifying that the cargo’s specifications meet the SPA at load or discharge. Lists density, sulphur, flash point, cetane index, etc. Mandatory for tanker parcels and required for DLC drawdown.

Similar to the COQ but produced by the refinery laboratory rather than an independent surveyor. Used as a reference document; the COQ from an external surveyor remains the binding document for compliance under the SPA.

A one-page reference listing the typical specification range of a refined product (e.g. Gasoil 0.05% S, Jet A-1 DEF STAN 91-91). Published by the producer; LDMK offers its own TDS PDFs for each of the eight products on /products/[slug]. A TDS is informative — the binding specification is the SPA schedule.

American Society for Testing and Materials — the international standards body whose test methods (ASTM D975 for diesel, ASTM D1655 for Jet A-1, etc.) are referenced in petroleum specifications worldwide. Every lab report in our file set cites the ASTM methods it ran.

Laydays / Cancelling — the time window (e.g. 15–25 May) during which the vessel must arrive at the load port ready to load. If the vessel arrives before the laydays, the charterer is not obliged to start loading; if after the cancelling date, the charterer may cancel the charter. Crucial for scheduling cargo under the DLC.

A per-day penalty payable to the vessel owner when load or discharge operations exceed the allowed laytime in the charter party. Typical for petroleum voyages: USD 25,000–45,000 per day for an MR tanker. The SPA usually shares demurrage 50/50 between buyer and seller.

The contract between buyer and seller for a specific petroleum parcel or a recurring supply. Contains product specification, quantity with tolerance, Incoterm, laycan, payment terms, applicable law, and arbitration venue. No commercial commitment exists until the SPA is signed — side messages, WhatsApp chats and verbal agreements are not binding.

Issued by the carrier when the cargo is loaded on board; evidences the contract of carriage and serves as a document of title. The original B/L must be presented to take delivery at the discharge port. For petroleum, three originals are typically issued — one travels with the cargo, two are held by the seller until the DLC draws down.

The act of supplying fuel (bunker fuel — typically heavy fuel oil, marine gasoil or LNG) to a vessel. Bunker grades are referenced by IMO sulphur class (e.g. VLSFO 0.5% S, ULSFO 0.1% S ECA). LDMK historically offered bunkering; our current footprint focuses on refined-product delivery to shore-based buyers.

A six-country customs and monetary union (Cameroon, Central African Republic, Chad, Equatorial Guinea, Gabon, Republic of the Congo) sharing the Central African CFA franc (XAF). Rules on VAT, customs duties and inter-state transport are harmonised, which is critical when a cargo delivered to Douala is re-routed to Bangui or N’Djamena by truck.

Cameroon’s Hydrocarbon Price Stabilisation Fund. Publishes monthly official price structures for each refined product sold domestically (PMS, Gasoil, Jet, LPG, Kerosene) on csph.cm. The official price includes CIF landed cost, customs duties, CSPH levies and retail margins. Our /resources page mirrors the monthly structures for transparency.

The Cameroonian Petroleum Depot Company — operator of the main storage terminals in Douala, Yaoundé, Maroua, Bafoussam and elsewhere in Cameroon. Ex-depot parcels at SCDP are a common way to access Cameroonian domestic demand without shipping a full cargo. Requires a SCDP access agreement.

Cameroon’s Ministry of Water and Energy — the regulator that issues the E1 (import) and D1 (distribution) agréments required to trade refined petroleum products in Cameroon. LDMK Trading holds both agréments; no legitimate counterparty can operate without them.

Organisation pour l’Harmonisation en Afrique du Droit des Affaires — a 17-country uniform business-law system covering commercial companies, securities, bankruptcy, transport and arbitration. Used as the governing law for SPAs involving CEMAC counterparties; arbitration is usually CCJA (Common Court of Justice and Arbitration) in Abidjan.