OT05234 | PRT: the nomination scheme - effective nominations - further provisions

A nomination will not be effective unless oil is sold under an arm’s length contract on terms that incorporate the information contained within the nomination, but the contract need not specify the transaction base time.

Also, provided the oil is delivered through a contract as specified as above, the delivery month need not be the one specified in the nomination and contract.

Therefore, assuming the other conditions for effective nominations are met, if a business hours nomination specifies the following:

• Seller: Producer Ltd

• Buyer: Refiner Ltd

• Fields: Brent, Ninian and Magnus

• Price: $50\bbl

• Volume: 600,000bbls +\- 1%

• Delivery month: January 2007

• TBT: 10 am 2nd December 2006

and Producer Ltd sells 605,000 bbls of Brent blend to Refiner Ltd at $50\bbl under a January 2007 BFO, that nomination will be effective even if the oil in question is not actually delivered until February 2007.