VESSEL / SHIP TAKEOVER (VTO/STO) – FOB PROCEDURE
Incoterms: VTO/STO FOB 2020
Delivery location: Ex Vessel on high seas
Mode of delivery: Vessel/Ship Takeover (VTO/STO) when Vessel is on high sea at OPL
Platts: Negotiable on PLATTS Asia-Pacific/Arab Gulf market scan
Price basis: FOB VTO/STO Fujairah/Jurong
Inspection: SGS/Intertek/Saybolt-Corelab or equivalent at seller’s vessel/Ship
Payment terms: By MT103 against verification of agreed POP documents and DIP test result
Offer: Subject to vessel availability. Buyer must confirm vessel position, ETA, and fix price with Seller before proceeding.
TRANSACTION PROCEDURE
- Buyer Inquiry Buyer sends email to seller stating intent to purchase, required volume, preferred OPL takeover point (Fujairah/Jurong), and target laycan.
- Seller Response Seller issues FCO including:
- Company profile
- CIS (KYC) of Seller
- Government issued Fuel Export License copy
- Signatory ID/Passport copy
- Available cargo quantity, specification, current vessel position (AIS screenshot), and indicative price
- Buyer Commitment Buyer issues:
- ICPO (Irrevocable Corporate Purchase Order)
- CIS / KYC of Buyer
- Company business profile
- Signatory ID/Passport copy
- Daughter vessel CPA (Charter Party Agreement) signed only with a vessel-owning company → must include reachable shipping agent name, phone, and email → Q88 to be shared only after SPA
- Contract Issuance Seller issues:
- RECAP
- Pro-Forma Invoice
- Draft SPA (Sale & Purchase Agreement) with STS protocols (ISGOTT-compliant)
- Contract Finalization Buyer reviews, signs, and returns:
- Pro-Forma Invoice
- SPA → Buyer shares daughter vessel Q88 and full IMO details only at this stage
- Commercial Invoice Seller issues Commercial Invoice (CI) → Buyer reviews, signs, and returns within 24 hours
- Partial Proof of Product (PPOP) – Issued by Seller Within 48 hours of signed SPA: a. Commitment to Supply b. Authorization to Sell and Collect (ATSC) c. Certificate of Origin (COO) d. Product Passport / Certificate of Analysis (COA) e. Last injection report OR previous Q&Q report by SGS/Intertek/Saybolt (composite sampling, sealed tank details, tank number, seal numbers) f. Vessel Q88 (mother vessel) g. Current AIS position & ETA to OPL h. Notice of Readiness (NOR) at OPL
- PPOP Verification Buyer verifies all PPOP documents within 48 hours → If satisfactory, proceed to Step 8
- Buyer Nominates Inspector & Provides POF Buyer submits:
- Name, address, contact person, phone, email of nominated inspection agency
- Quotation letter from inspection agency (if available)
- POF via one of the following: • Bank Comfort Letter (BCL) • Bank Statement • SWIFT MT199 / MT799 POF confirmation
- Full Access Documents – Issued by Seller Within 24 hours of POF receipt: a. Charter Party Agreement (CPA) copy – redacted if needed b. Contact Detail of the Shipping line who has booked the Vessel c. Bill of Lading (BL) – held in escrow at Seller’s bank d. Cargo Manifest e. Ullage Report f. Time Log Sheet g. Ship’s Tank Dry/Cleanliness Certificate h. Master’s Receipt of sample & Documents i. Product release note j. Custom Clearance documents from last port k. Seller’s Product Export License l. Seller’s company registration m. Authority to Board (ATV) n. Dip Test Authorization (DTA) – at Buyer’s sole cost o. STS Operation Plan (ISGOTT-compliant)
- STS & Dip Test Execution Within laycan ±3 days at OPL:
- Daughter vessel arrives at OPL
- STS operations commence under joint supervision
- Buyer appoints SGS / Intertek / Saybolt
- Inspection conducted during STS in presence of both parties
- Live video feed recommended (optional but advised)
- Fresh tripartite Q&Q report issued
- Payment Upon successful Dip Test report confirming quantity and specification: → Buyer remits 100% payment via MT103 / TT within 72 hours
- Title & Cargo Transfer Upon confirmation of clean funds in Seller’s account:
- Seller endorses original Bill of Lading to Buyer
- Seller issues Full Proof of Product (FPOP) including: • Fresh SGS in Exit Buyer’s name (tripartite) • Updated Cargo Manifest in Buyer’s name • Certificate of Ownership Transfer (COT) via SWIFT MT799
- Title transferred to Buyer
- Buyer assumes control of mother vessel or cargo
- Vessel Takeover Completion
- Buyer parallelly completes VTO/STO paperwork with shipping company
- Vessel departs OPL under Buyer’s instructions
IMPORTANT NOTES
- Full Proof of Product (FPOP) and Fresh SGS → Must be issued in tripartite format (Seller / Buyer / Inspector) → Provided only after payment and BL endorsement
- ATSC → Must clearly authorize Buyer to sell and collect the product
- No Extra Fees → No STS fees, port charges, or “facilitation payments” outside agreed SPA
- Dip Test Failure → If product fails spec or access denied → transaction void, inspection cost refunded by Seller
- Force Majeure & Disputes → Governed by ICC rules, arbitration in Singapore / London (as per SPA)
- BL Escrow Mandatory → Original BL held by Seller’s bank until payment; endorsed immediately upon fund confirmation
Buyer Credential Verification Policy:
To ensure a secure and reliable transaction process, the financial capability of buyers intending to purchase fuels will be thoroughly verified.
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Individual Buyers: Credentials of the buyer must be provided for financial assessment.
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Joint Ventures (JV): If the buyer is importing fuels in partnership with another financially robust entity, both parties must submit their credentials for verification.
All provided information will be reviewed to confirm the buyer’s ability to fulfill the financial obligations of the purchase.
Indemnity Clause: In the oil procurement process, we strictly adhere to our established procedures, which are designed to be neutral, transparent, and structured to prevent scams and fraud in the oil trade. These processes ensure compliance, security, and fairness for all parties involved. Our procedures apply solely subject to the availability of the product.
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Disclaimer : We hereby declare that we do not accept or source any fuel or petroleum products from Russia, Iran, or any other sanctioned country.
