The Lotor - 20 December 1982

Liability for excess water found in crude oil cargo tanks

Under a crude oil exchange agreement dated 26 June 1980, Sohio agreed to buy a quantity of Escravos crude from Transocean Gulf Oil Co. (Gulf). The agreement incorporated the “Standard Terms and Conditions for FOB Sale of Petroleum” (Gulf form 50165). Sohio voyage-chartered the Lotor to load a cargo of crude oil at Escravos, Nigeria, in accordance with this agreement. Loading commenced on 25 September 1980 and completed on 26 September. The Lotor sailed the same day. 17 days later, a quantity of some 16,914 barrels of water was found in the oil tanks.