Chapter 209 Oil Auction
At 8:40am, the heavy Hummer roared its way to the Takeda Building parking lot in the s.h.i.+njuku District. Unfortunately, it was already completely filled with cars, many of which were expensive models that could otherwise only be seen in car exhibitions. Chen Fan"s black car could only be parked on the bare ground nearby.
Getting out of the car, he realized that the place was totally different from the previous day. There were at least 50 policemen patrolling around the building, each holding a baton. In addition, gorgeous banners were hung all over the building"s plaza.
In the distance, many reporters could be seen carrying their equipment and negotiating with the staff in black suits, hoping to enter and do an interview.
Strangely enough, these staff members neither advised the reporters to leave nor stopped them from entering. They only stood there like statues. The reporters, on the other hand, only bargained and did not dare to force their way through, as though someone with high authority was blocking their way.
As soon as Chen Fan and his escorts entered the hall, two staff members in black suits approached them. They bowed and then using their arms, stopped the four fierce-looking bodyguards behind him. The staff members were ready to use their metal scanners on the bodyguards.
Beep! Beep! Beep! Just as the metal scanners touched their bulging clothes, an ear-piercing alarm sounded off.
"Apologies sir, but we do not allow any weapons in here!"
Chen Fan nodded and told Dai Yu, "Tell Mike to put his weapon away. The rest can wait for us in the car!"
Following the staff"s lead, the group entered the conference hall which was painted pale yellow and could accommodate up to 200 people. The place was already quite full, with over 100 people seated, most of whom were middle-aged Asian men dressed in formal attire accompanied by either a young female secretary or a smart-looking lad.
Aftering sitting down on the seat indicated on the entry card, Chen Fan pouted his lips at Dai Yu on his left, signalling her to look at the man on the right who was flirting with his secretary. Laughing, he said, "How about you just become my secretary?"
"Not for free!" Dai Yu rolled her eyes. "The auction is going to start soon. You"d better take care of your own business!"
As the two chatted, the screen near the podium opposite them suddenly lit up. In a flash, an image of a drilling platform filmed from a helicopter appeared.
Just then, a man who was about 40 years old walked onto the podium and spoke into a microphone, "Ladies and gentlemen, a very good morning to you all. Welcome to the Graff Oil Auction. I am Goro Ota, the executive officer for this auction. Next, let us welcome on stage the two inspectors and the director to start the auction."
Obviously, this was not a school awards ceremony. After he finished speaking, there was no applause at all.
After all seven staff members sat down in a row, Goro Ota, who was in the middle, cleared his throat and said, "Ohno Oil Company, one of our subsidiaries, was established in 1973, with its headquarters set up in Tokyo. Although the company is much younger than many other older oil firms, under our strong financial and technical support, its size now ranks number seven in the whole of j.a.pan. Over the past decade or so, we have established various subsidiaries, including those that handle vehicle oil, natural gas, chemical engineering, cooking, lubricating oil and many more.
"Currently, we have built seven large oil fields in the Libyan Exclusive Economic Zone. This is now a platform that combines oil processing, transportation, sewage treatment and living…"
"So much nonsense!" Chen Fan could not help but start grumbling. Bored, he looked around and realized that most people, just like himself, were not paying attention to the speaker. Indeed, if a person could attend this auction, he would certainly have researched sufficiently about the company in advance and would not need to listen to the speech.
"You can stop translating for now. Tell me again when the auction actually starts!" Chen Fan took out his phone and began playing a mobile game.
"It already did!" Dai Yu said, smiling, before he could even enter the game.
"Our oil company will go into production next week. The Crude Oil Transportation Agreement will come into effect on that day as well."
Goro Ota used the laser pointer to point at the third animation on the screen and continued, "Below our drilling platforms, we have built large underwater oil tanks. Each platform can hold up to 2,500,000 barrels of crude oil. In this way, the drilling platforms can work continuously for a significantly longer period of time, therefore allowing more time for your tankers to travel between the platforms and your destination.
"Now, we are supplying 3,000,000 barrels of low-sulfur crude oil with a viscosity of 6.28mPas at 50℃ on a weekly basis. The opening bid is 6,400 yen per barrel, and the bid increment is 0.5 yen. Ladies and gentlemen, the bidding now begins!"
"Ahem. Look at my expression later. If I hint at you, raise the board!" Understanding that the real show was about to start, Chen Fan immediately sat up straight.
The bid increment was only 0.5 yen. Even if it was in yuan, whose value was over 10 times that of yen, Chen Fan would raise the price without hesitation. Anyway, his main intention was to rock the boat in the auction. The higher the final price of the oil, the more he would get in return.
"Ah, ok, ok…" The responsibility of handling such a trade that involved at least 20 billion yen each week was so heavy that Dai Yu quickly became breathless. Her face turned pale and her palms were filled with sweat.
The manual work of raising the board to call for a bid was of course left to the secretaries. Those charming a.s.sistants soon started to raise their hands, one after another, and in only five minutes, there were already 72 outbids, which totalled to 36 yen. Almost everyone in the hall managed to call for a bid at least once.
Even though the highest bid at the moment was still tens of yen lower than the international price of crude oil, few were willing to continue outbidding.
This was because the international price would fluctuate. After the agreement between the buyer and the seller was made, it would be impractical to change the price every day. The most that could be done was to set a certain limit to the price. For example, the agreement would need amendment if the stated and the international price differed by more than 5% or perhaps 10%, depending on both parties.
Hence, the price on the agreement would usually be slightly lower than the international price. Otherwise, the buyer would take too much risk as the international price might possibly fluctuate.
"Keep adding! Why did you stop?" Chen Fan kept signalling at Dai Yu, but she only looked back with a pitiful face, not daring to continue.
"Maybe we should stop now?" Dai Yu said in an extremely sincere voice. "If we win and the item goes unsold, we will lose our earnest money deposit of 10 million yen!" It was obvious that Chen Fan wanted to raise the price as much as possible. Thinking that he was here merely to make trouble, Dai Yu anxiously reminded him of the consequences.
Similar situations had happened in the past. Before the auction rules were fully developed, many rival firms would attend the bidding conference only to cause trouble. They would win the bidding and then leave without payment, so that the conference would be a complete waste of time.
In fact, even with the inclusion of the earnest money deposit, there were still such cases.
The famous 2009 auction of the Old Summer Palace bronze heads was a perfect example. Someone won the bid but refused to make the payment, causing Christie"s" effort to promote the auction for months to be completely wasted.
"Give me the board!" Chen Fan s.n.a.t.c.hed the board from Dai Yu and directly raised it up.
"Number 17!" the auctioneer on the stage shouted enthusiastically and gave Chen Fan an approving look.
Just then, a man sitting behind Chen Fan on the third seat from the left also raised his board.
Chen Fan turned around and looked at him. It was a man in a brown leather suit, aged about 25, with a long and handsome face just like a movie star. Noticing Chen Fan"s gaze, he grinned.
"Number 17, again!"
The auctioneer was almost too excited to contain himself. He wished he could go up and give this "number 17" a kiss.
Half a yen was approximately equal to 0.04 yuan, which was the increment every time...
Every week there would be 3,000,000 barrels, which multiplied by 0.04 would give 120,000 yuan. Since the agreement would be for at least half a year, that would be 26 weeks and thus 3,120,000 yuan...
Two seconds later, however, the auctioneer was delightfully surprised one more time. "Number 29," who was seated behind "number 17," actually raised his board again.
"Awesome!" Chen Fan took a deep breath and raised his board without hesitation.
"Are you mad?" Dai yu exclaimed in shock. A person who could enter a prestigious overseas university was certainly smart enough to know, from simple mental calculation, that each outbid meant earning 3,000,000 yuan less in half a year. Outbid two more times and one would no longer gain any profit...
"What do you know?" Chen Fan rolled his eyes. "Since I dare to do this, obviously I have my own reasons!"
"Whatever. It"s not my money anyway. Why should I care?" Dai Yu replied, annoyed.
"Num, number 29… going once…" The auctioneer was so thrilled that he started stammering.
"Oh, number 17…"
The act between the two totally bewildered the rest in the hall.
Young people now like to use their money without using their brains… The price is already 6451 yen. How the f**k would you make a profit with that? Everyone else thought.
Chen Fan turned and gave the man behind a provocative look.
Noticing his stare, the man returned a friendly glance and, to the absolute astonishment of everybody, he gracefully raised the board in his hand.
"Err…" The amount of surprise felt by the auctioneer during the event was probably more than in the rest of his life combined. His eyes were locked on the two bidders and his hands were shaking uncontrollably.
All thanks to those two idiots, his commission just increased by 3,000,000 yen in the past few minutes. How could he not tremble?
At Dai Yu"s desperate look, Chen Fan raised his board elegantly in response.
Woom! The other man followed.
After he raised the board, the man stood up, walked to the seat right behind Chen Fan, and whispered something to the middle-aged man who was occupying the seat.
The two seemed to be discussing exchanging seats. The middle-aged man soon smiled and stood up, leaving the seat empty.
"Hey. You are sent here by another company to make trouble as well? Stop adding. Or else the organizer is going to suspect us!"
This was what the man said to Chen Fan and Dai Yu.