FDO's terms and conditions for entering ticket agreements

Sale:

When the Danish Central Oil Stockholding Entity (FDO) finds that there is scope for selling excess stock cover to the market, an invitation to tender is issued whereby Danish CSO companies and foreign economic operators and central oil stockholding entities may bid for such cover.

If the bids received exceed the quantity put up for tender, FDO will select the best bid(s). Bids may be submitted in DKK, EUR and USD per ton/cubic metre. FDO will convert the price(s) to DKK at the National Bank of Denmark´s official exchange rate at the bid deadline date and calculate the price to cubic metre/ton by means of the statutory standard densities. Any brokerage fee will be deducted, and a net price will be calculated for the purpose of comparison of the bids.

FDO is not obligated to make use of any bids received and is entitled to make agreements with any other party if the bids received are deemed not to be market consistent or if the buyer is deemed not to meet the terms stated in FDO’s credit policy. Any bids or offers there are 20% below or 20% above the price indication from the relevant broker during the week up to the expiry date of the auction will not be taken into consideration unless there has been major changes in the oil market. Major changes may be if the market from reverse from contango to backwardation or the other way around, marked changes in crude oil prices (> 10%) or fluctuations in USD / DKK exchange rates. If there is no bid in the market in the market report, it will be assessed by contacting one or more relevant brokers or larger ticket marked operators.

If the prices submitted exceed the costs budgeted for a product category and if the cover period is contained within a period for which a product budget is available, FDO regrets being unable to offer cover in such product category.

Purchase:

If FDO needs to buy stock cover, they will issue an invitation to tender whereby Danish CSO companies and foreign economic operators and central stockholding entities may bid for such cover. Since FDO is subject to limitations on how much stock cover may be received from abroad, the tender documents will include information on the maximum cover receivable from abroad.

Bids may be submitted in DKK, EUR and USD per ton/cubic metre. FDO will convert the price to DKK at the National Bank of Denmark´s official exchange rate at the bid deadline date and convert the price to cubic metre/ton by means of the statutory standard densities.

If the bids received exceed the required quantity, FDO will select the best bid(s). FDO is not obligated to make use of the bids received and is entitled to make agreements with any other party if the bids received are deemed not to be market consistent. Any bids or offers there are 20% below or 20% above the price indication from the relevant broker during the week up to the expiry date of the auction will not be taken into consideration unless there has been major changes in the oil market. Major changes may be if the market from reverse from contango to backwardation or the other way around, marked changes in crude oil prices (> 10%) or fluctuations in USD / DKK exchange rates. If there is no bid in the market in the market report, it will be assessed by contacting one or more relevant brokers or larger ticket marked operators.

Reasonable notice is given for purchase as well as sale, generally 10 working days.

If oil stock tickets for purchase and sale have been tendered to the market once, FDO reserves the right to contact market players independently and make agreements.

The invitation to tender for national tickets for purchase and sale is issued on FDO’s website and in its newsletters. For national tickets, FDO will use this standard ticket contract.