Friday, February 04, 2011

Elements in Coal Trading

The Specs and quality of the Coal is really significant to be observed in trading Coal Products. You have to learn carefully from  the Coal Professional, when they are talking and discussing about the Calorie of the Coal. The Coal from Sumatera appears to be high grade ranging around 6.3 to 7.00. 

Stock pile of the Coal is really important to avoid delay in loading the Coal and  for the purpose of determining the Laycan or the time when you will ask the Ship to move or berth to the Terminal Port, for loading the Coal because you will be exposed with Demurage and Dead Freight from the Mother Vessel which will pass by the Buyer to us as the Seller.

If we agree with an FOB arrangement, and delay occurred  causing longer time for the agreed Loading time, this will result  additional cost to the Vessel for parking the Vessel  at the Port, whch will be passed to us by the Buyer of the Coal..  

To minimize the risk  you may try to request that your responsibility as the Seller in taking  the Coal Product is up to the Stock Pile, where you will ask part of payment be made by the Buyer when the Coal reached  the Stock Pile.  We have several experiences, where we are being exposed with Demurage and Dead Freight due to the delay on our part in meeting the agreed volume of Coal to be loaded to the Vessel during the Laycan, since there are certain level of the Quality /Spec Coal  which may reach the Rejection figure specified in the Coal Sales Contract .

As a Corporate Business lawyer involved in this situation we have to experienced upon the real reality occurring during the Loading and shipment of the Coal.    

As you may now, even though the Grade is below the agreed level, frequently the Buyers insist you to continue Loading the Coal Products to the Vessel, event though  Coal Spec reached the Rejection level shown in the Coal Sales Agreement , since it appears  there are always Buyers or Endusers who will  absorb such Coal products. 

However, it may be that since the Coal Product is blended, the Calories are being mixed resulting negotiation upon the adjustment price to the agreed Coal Price, is conducted after a while from the time  Shipment of the Coal had reached its destiny, in the sense that The Coal had been delivered by the Buyer to the Enduser, but adjustment of the Coal Price between the Seller and the Buyer had not been reached. .  

Well the above are some elements that we have to observe in dealing with Selling, Loading the Coal Products  experienced  during the Loading time of the Coal.

Jakarta 4th February 2011
Agung S.Suleiman.  

Thursday, February 03, 2011

Challengging Oil Operations

Yes, here  I  am back in front of my computer, writing in by Blog AGUNGSS Business Lawyer Note. After having experienced Independent as an Independent  Business Lawyer for more than 12  11/2 Years since June 1998, I am now busy with Oil works and also Coal Mining Works.

The Oil Company which I am being assigned through Secondment by  SACO LAW FIRM   through its Holding Company,  is in the face of Commercial Production. It is really exiting since we are all busy in preparing the arrangements as to how to implement to  get the oil Production from below the Ground around 500 meters  to carry  and moved it  to the Terminal Port for lifting to the Tanker of the Buyers. Well, it is really interesting since, cash and funds are needed to transport and move such Crude Oil from the Oil  Field to the Terminal Port.  

Moving such oil can be done through pipeline facilities, however, funds are need to built such pipeline facilities. If we are intending to use existing pipeline of other Oil Companies in the Working area, in reality it  is not that easy since quality of the Oil which we are intending to flow through  such pipeline must meet the quality oil of the existing producing Oil Companies who are already using such pipeline facilities. 

The temperature of the oil has to be high with a certain degree of level so that the oil could still  move and being transported through such pipeline facilities. Bankers who are financing oil Companies needs to see the real oil products being actually sold to the Buyers.   

Bankers will only disburse a certain amount of funds needed by the Oil Company for the working capital and will only further disburse  if the Oil Companies can show the Oil Products really being sold to the Buyer at the Terminal Port of Point of Sales. 

Accordingly, there have to be business strategy by the Oil Company, as to how to show  the Bankers of the realization of such Sales of Oil. 

If the process of using the Pipeline facilities still needs a long time for realization, the alternative way out has to be made,  which among others are  by using Trucks to carry such Crude oil from the Oil Field to such Terminal Port.  There must also be Storage tankers needed  to store such Crude Oil before lifting  to the Tankers. 

This may initially be more costly compared to using the pipeline facilities. But since, we are competing with time to show the Bankers on the Sales of the Oil to the Buyers, we may than choose  using Trucks as the first priority action to be taken by Oil Companies who are in the early stage of growth. in building their Financial Strength.  

This is really challenging for us including fo the Oil Business Commercial Lawyer to prepare the required  contracts to stipulate the terms and conditions for implementing this business strategy.    

Good and Well Team work are needed to make these  challenges  become real and executable. We have to be professional  and  focused on the Goals and Priorities. These are really challenging operations experienced  by us involved  in the Oil Business Operations in Indonesia.

Agung S.Suleiman
Jakarta 3rd  February 2011                 

Drilling Rig

Drilling Rig
oil gas