How To Verify a Legitimate Crude Oil Seller in West Africa

Introduction

West Africa particularly Nigeria, Ghana, and Angola has long been a hub of crude oil production, supplying international markets with Bonny Light Crude Oil (BLCO), Forcados, Qua Iboe, and other grades. However, with this lucrative market comes a flood of fraudulent intermediaries and fake sellers, many of whom prey on the desperation of buyers unfamiliar with the region’s oil trade complexities.

For any serious crude oil buyer, verification of a seller’s legitimacy is not just a step in the transaction; it is the foundation that determines whether a deal succeeds or fails. This article provides a comprehensive guide, highlighting red flags, due diligence processes, and legal safeguards that will help protect buyers and ensure smooth engagement in the West African crude oil sector.

Key Red Flags to Watch Out For

Upfront Payment Demands Before Verification
Legitimate sellers never ask for money before proving they have the product.
Scammers invent things like “registration fees,” “anti-fraud deposits,” “commitment fees”.
These are traps to extract cash without delivering any oil.
Safe practice: Payments should only happen after due diligence, contract signing, and confirmed cargo availability.

Overreliance on “Title Holders” or “Facilitators”
Many fraudsters introduce themselves as “mandates,” “facilitators,” or “title holders” linked to NNPCL.
In reality, NNPCL does not operate through informal middlemen.
Safe practice: Only accept documents/contracts directly verified with NNPCL or licensed offtakers. Ignore unverifiable “title holder” claims.

Incomplete Documentation
If the seller cannot provide essential trade documents, it’s a huge warning sign.
Must-have documents include:
Proforma Invoice (PI)
Authority to Sell (ATS)
Commercial Invoice (CI)
Cargo Manifest
Missing or heavily delayed documents usually means the deal is fake.
Safe practice: Verify every document with the issuing authority or inspection agency.

Too-Good-To-Be-True Offers
Scammers lure buyers with prices far below market benchmarks or unrealistic terms (e.g., 90-day payment after delivery, no inspection needed).
Oil is a global commodity with transparent pricing – nobody sells at a huge discount without a catch.
Safe practice: Always cross-check with Platts or Argus market benchmarks before engaging.
Communication Red Flags
Use of free email accounts (Gmail, Yahoo, Hotmail) for “official” transactions.
Poorly written proposals, unprofessional tone, or pushy/aggressive correspondence.
Safe practice: Expect sellers to use corporate emails linked to registered domains, with formal communication standards.

Due Diligence Steps for Verifying a Seller

Verify Corporate Existence
First, confirm that the seller is a real registered company, not just a name on paper.
In Nigeria, check with CAC (Corporate Affairs Commission) – see if the company is active and legitimate.
For oil & gas, also confirm with NUPRC (Nigerian Upstream Petroleum Regulatory Commission, formerly DPR) to ensure the company is licensed to operate in that sector.
Red flag: Companies that claim oil deals but are not in the NUPRC database.

Confirm NNPCL Relationship
The Nigerian National Petroleum Company Limited (NNPCL) is the main body that allocates crude oil and products.
If a seller claims they can supply, you must verify their direct allocation or offtaker contract with NNPCL.
This can be done by requesting documentation and, where possible, confirming with NNPCL directly.
Red flag: A seller who cannot show proof of an actual allocation or valid contract.

Validate Documentation
Key documents that should be verified include:
ATS (Authority to Sell)
PI (Proforma Invoice)
Export License
Bill of Lading (B/L)
Quality and Quantity Certificates (from trusted inspectors like SGS, Bureau Veritas, or Cotecna).
These documents must be cross-checked for authenticity (contact the issuing authorities/inspectors if necessary).
Red flag: Scanned or forged documents that can’t be verified.

Physical Verification
If crude or refined products are being sold, conduct a site/tank farm visit to confirm actual stock.
Alternatively, request an independent Cargo Availability Report from a recognized inspection company.
Red flag: Sellers who avoid physical checks or claim “the goods are in transit but not available for inspection.”

Financial Due Diligence
Ask for bank references to prove the company has financial standing.
Avoid offshore accounts in shady jurisdictions – stick to reputable banks.
For safety, use escrow services or LC (Letter of Credit) instead of direct transfers.
Red flag: Sellers who demand upfront payment into personal or offshore accounts.

Practical Experience Tips

Never Skip Site Visits
On paper, a deal may look good, but the reality on ground can be very different.
Visiting warehouses, factories, or ports helps confirm that the seller actually has the goods and that the facilities exist.
Scammers usually resist physical visits or make excuses.

Insist on Transparency in Inspections
When goods are being inspected (for quality, quantity, or compliance), you or your trusted agent should be present.
Transparency means you see the process, the results, and official reports (like SGS, Bureau Veritas, or Cotecna inspection reports).
Hidden inspections or “just trust us” situations are red flags.

Be Patient; Rushing Favors Scammers
Scammers push urgency: “Pay now, or you’ll lose the deal!”
In real trade, due diligence (background checks, paperwork, and compliance) takes time.
Patience allows you to cross-check details and spot inconsistencies.

Network with Insiders for Genuine Market Intelligence
Paperwork can be faked, but insider knowledge can’t.
Build relationships with port workers, shipping agents, local brokers, or trade associations.
They can give you the real story about whether a supplier, cargo, or shipment is genuine.

Legal Safeguards for Buyers

Well-Drafted Contracts
Always put agreements in writing.
Use internationally recognized templates (like ICC – International Chamber of Commerce) so that terms are clear.
Clearly state who delivers what, when, and how.
Include clauses on inspection rights (so you can check the goods before full payment) and dispute resolution (what happens if there’s a problem).

Governing Law & Arbitration
Every contract should state which country’s law applies (for example, English law is widely trusted in international trade).
Disputes should be handled through arbitration instead of lengthy court battles.
Arbitration centers in London, Paris, or Lagos are reliable and recognized worldwide.

Licensed Intermediaries
Only deal with registered brokers, agents, or maritime lawyers.
This reduces the risk of fraud and ensures accountability.
Licensed professionals are regulated, so they must follow strict standards.

KYC (Know Your Customer) Protocols
Before doing business, exchange verified company documents (certificate of incorporation, licenses, tax ID, proof of address).
This helps confirm that the company is real and legitimate, not a scam.

Compliance
Make sure all transactions follow international financial and trade rules:
FATF (Financial Action Task Force) – rules against money laundering.
OFAC (U.S. Office of Foreign Assets Control) – avoids trading with sanctioned entities.
Local export laws – every country has its own regulations on what can and cannot be exported.

Conclusion

The West African crude oil market is a goldmine for genuine investors but a trap for the unsuspecting. With billions at stake, scams thrive on ignorance and greed. By watching out for red flags, conducting rigorous due diligence, and protecting yourself with strong legal safeguards, you stand the best chance of closing a successful and profitable crude oil deal. In simple terms: Trust is not given in crude oil deals—it is verified.

Should you require further professional guidance on verifying the legitimacy of crude oil sellers in West Africa, please do not hesitate to contact me at: bfa@bfaandcolegal.com.