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BP’s 2015 New York Law GTCs for Crude Oil and Products Trading: Key Changes

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Home Perspectives BP’s 2015 New York Law GTCs for Crude Oil and Products Trading: Key Changes

BP Global Oil Americas (BP) recently published the 2015 edition of its General Terms & Conditions for Purchases and Sales of Crude Oil, Refined Petroleum and Related Products (GTCs), which are governed by New York law. The previous BP GTCs were published in 2008.

BP’s 2015 GTCs have been organized in a manner similar to the latest BP Oil International (BPOI) GTCs, also published in 2015 and which are governed by English law. The 2015 GTCs are divided into eight separate parts, with Part 1 including terms applicable to all transactions, Parts 2-7 addressing terms specific to particular types of delivery (e.g., marine FOB, CIF/CFR, Ex Ship, truck, tank, pipeline), and Part 8 addressing deliveries of biofuels with RINs.

The 2015 GTCs also incorporate revisions that more closely align the substantive terms with those of the BPOI GTCs. Further, the 2015 GTCs reflect updates, clarifications, changes in market practice and general improvements. In particular, more detail specific to the different modes of marine delivery is included. Provisions containing significant changes include the following (see quick reference guide for more detail):

  1. Measurement (new measurement terms added for tank delivery)
  2. Independent inspection (independent inspection now required, except for pipeline delivery)
  3. Removal of rail terms (rail supplement to come)
  4. Addition of biofuel with RINs terms
  5. Destination restrictions clause (new provision)
  6. Vessel nomination (more detail regarding information requirements) and vessel arrival (revised ETA notice requirements)
  7. Public dock clause (revised to include a definition of “public dock” and clause limited to FOB)
  8. Allowed laytime (allowed laytime now varies based on cargo volume)
  9. One-half running laytime events (list of events replaced with reference to all force majeure events)
  10. Demurrage claims (supporting documentation requirements revised)
  11. Taxes (new NAFTA and Quebec Motor Fuels Tax provisions)
  12. Required payment documentation updated, including addition of seller LOI format as appendix
  13. Financial responsibility clause updated, including the addition of LC and PCG formats in appendix
  14. Force majeure (significant revisions throughout)
  15. Time bars (new litigation time bar added)
  16. Events of default (several new default events added, revisions to liquidation procedures)
  17. New and changed regulations (the provision was removed entirely)
  18. Addition of a new appendix to cover e-documents

This alert seeks to provide a useful, quick reference guide to some of the key differences between BP’s 2008 GTCs and its 2015 GTCs. It is not a substitute for legal advice on the terms of the GTCs themselves as they may affect any person, including in connection with any specific transaction.

For information on BPOIs 2015 GTCs, please see our previous Alert, "BP’s 2015 general terms & conditions for the sale and purchase of crude oil and petroleum products: key changes to be aware of".

 

Client Alert 2015-198