The Crude Oil Business: Why Most Facilitators Never Make It

There is no doubt that the crude oil business is a very lucrative business, you don’t have to be rich to facilitate a deal. All you need is a genuine buyer and a genuine seller. It has become very difficult for buyers to meet genuine sellers and vice versa, this is due to the fact that there are many fraud perpetrators who try to take advantage of the information they have to extort money from unsuspecting buyers. This has heightened the doubt of genuine buyers of Nigerian crude, forcing them to think of every Nigerian who tries to facilitate a deal as a potential scammer. When these foreign prospects try to negotiate a deal, they become rigid in their dealings, preferring the seller to work through their own procedures. First comes into play the question of the seller posting a 2% performance bond, the buyer would have the seller collect a bond first and the seller, on the other hand, would prefer the buyer to raise proof of background in the form of a MT . 799, Letter of Credit, Bank Guarantee, MT 103.

The facilitator plays an important role in negotiating a crude oil deal in that he acts as a go-between. It’s not easy being a facilitator, you need to have convincing power, you need to be clear in your understanding of the business, and you need to be able to give the seller all the necessary information, either over the phone or email. The reasons why most facilitators fail and get frustrated are not far-fetched.

Long Chains: This is always a problem that limits most of the facilitators, when there are too many people as facilitators before the mandate, it presents a big problem in the sense that the distribution of information is slow. A buyer may need a product and require information, but because the facilitator has to go through many hands before getting the information, the buyer loses confidence.

Commission splitting becomes a big problem as most of these facilitators are frustrated and motivated by greed, the question of which group takes how much is put at stake and fail to come to a reasonable conclusion leading to a loss of time and resources. Some buyers don’t like the problem of submitting a SPA with too many account details, they prefer only one payer; therefore no deal because there are many groups involved and they all have different account details. The facilitators’ greed makes this business tough, sometimes a facilitator may say they are working with some other group of facilitators that doesn’t exist. Account details that are supposedly meant for the other group claiming to belong to them or some of their colleagues, this makes it exhausting.

Another point to keep in mind is this, before proceeding with any deal; ask your contact what it is (Enabler or Mandate). If it is a mandate, then you can be its facilitator. If he is a facilitator, you also make him understand your position. You reach an agreement if he acts as a facilitator for the seller or a facilitator for the buyer. Most of the time, the seller side is always closed and most of the facilitators may want to join as buyer facilitators while their contact also acts as buyer facilitator. A reasonable agreement must be made to split the 50 cents that are usually due to the facilitators. If you don’t do this, you could end up wasting your time.

Insufficient knowledge of the product: How can you market a product you know nothing about? It is not logical to do that. When a facilitator contacts a buyer, the buyer may want to make a phone call. The reason for doing this is not far from being understood. You want to be sure that you are knowledgeable about the business or product you intend to market. He wants to feel your pulse through the phone; He wants to know if you sound confident. Once you can convince the buyer in your first phone call, you’ve gained their trust in you. If you prove otherwise, then you’ve lost it, so the next time you want to facilitate a deal, make sure you’re well-informed. Remember that building trust and credibility is very important.

Procedures: This is another major problem that makes negotiating a deal difficult. In most cases, the buyer may want to work with his procedure and the seller may not be comfortable with it. This is where the issue of Product Testing and Background Testing comes into play. The buyer wants to see POP, Q88 and CPA first and the seller wants me to sign SPA first. So many deliberations here and there, in the end nothing comes of it. It is logical that the seller gives what he has; is that the buyer works with him or leaves. Logically, if you go to a gift shop and they don’t accept cash, the buyer has to play shopping with the rules of buying with a credit card. If the buyer does not like it, he can try the next store. It’s as simple as that.