Press Release: 

Energy LEAP is pleased to announce that the standard wording for Letter of Indemnity is now published. This follows an extended period in 2020, when the draft standard was available for consultation, and this finalized version includes enhancements received during this consultation period.

Summary:

It has been well recognized across the Energy Trading Industry, that delays in certain operational papers, can lead to delays in invoicing, with consequences to cashflow.

In early 2020, a working group including industry contract experts from Shell, BP, TotSA and Chevron published for consultation their draft wording for a standard “Letters of Indemnity.” In Feb 2020, this was extended to include an alternate wording format for use where US Law is applicable. Further minor feedback has now been consolidated into a final version V1.0, containing both formats which is published today.

By publishing this, any company, whether they are a member of Energy LEAP or not, is welcome to use either of the Letter of Indemnity (LOI) download formats for the purposes of securing payment for crude oil or product in the absence of all the necessary shipping documents, by following the principles as laid out in the V1.0 standard.

One year on from the draft inception, feedback from the working group, is that adoption of these formats is already delivering significant benefits to participating companies, and broader adoption will continue to be encouraged across the industry.

You can download the standard here.

Should you have any questions on how this LOI standard can now help you, please do not hesitate to reach out to Energy LEAP using our contact form here, and we will arrange for one of the working group to be in touch with you.

Peter Harvey
Energy LEAP Programme Director