Crude Oil Marketing and Trading Reorganization

Provided reviews of crude oil marketing and trading practices of a major international oil company operating in Europe.  Prepared analysis of the reorganization, key successful practices, and operating tactics.  In the final report, recommendations were made to restructure the organization and change a number of operating practices to improve effectiveness and profitability.

Crude Oil Metering Dispute

Investigated alleged tampering with crude oil Automatic Custody Transfer volume and quality measuring devices.  Reviewed common carrier pipeline tariffs, inspected site, and analyzed measurement data.  Determined that the pipeline company had the right to disconnect the offending shipper.

Evaluation of Crude Oil Supply Options and Sale of Crude Gathering System

Performed economic and strategic evaluation of existing crude oil gathering system for possible sale and alternate crude supply options for a domestic refining company.

Crude Oil Truck & Rail Terminal Due Diligence

Performed due diligence review for bank financing of a greenfield crude oil truck and rail terminal in the Bakken area of North Dakota.  Commercial review included market assessment, competitive analysis, and review of commercial contracts.  Evaluated facility design to ensure capability to meet contractual commitments, conducted site inspection during construction, and evaluated facility design and construction contracts to identify major risks and mitigation provisions.

Review of Economics for Carbon Dioxide (CO2) Pipeline and Tertiary Crude Oil Recovery Project

Provided arbitration testimony concerning the viability of tertiary recovery and the developer’s project economics evaluation methodology.

Crude Oil Royalty Dispute

Determined economic damages due over riding royalty owner in offshore OCS leases who had a “same as Fed” payment provision.  Evaluated reported oil and gas product volumes, product pricing, federal allowable transportation and processing deductions, and late payment interest.  Prepared expert report on calculated damages over the disputed period.

Offshore Platform Contingent Business Interruption Claim

Reviewed and analyzed service company business interruption claims regarding the shutdown and delay in start up of offshore oil and gas platforms in the Gulf of Mexico.  The platforms’ operations had been impacted by the 2005 hurricanes Dennis, Rita, and Katrina.

Crude Oil Pipeline Evaluation

Commercial finance firm required investigation on behalf of a refinery whether to purchase an existing idle crude pipeline in need of rehabilitation or to build a new crude pipeline to supply refinery.  Recommended the construction of a new pipeline which subsequently occurred.

Accident and Fatality Investigation

Investigated cause of fatality at a drilling rig during rig set up.  Inspected site, evaluated factual evidence and reviewed owner and contractor maintenance, construction and safety procedures and practices.

Crude Logistics Improvement Study for Refinery

Led study to improve refinery crude oil logistics for short and long term.  Immediate results included adding a short connection to a major Gulf Coast crude pipeline allowing the company to reduce third party storage and working capital in excess of $5 million and to reduce crude oil transportation costs.  Long term modeling identified the optimal amount of refinery storage and dock space required for economic flexibility and refinery growth requirements.

Watson Millican & Company consultants have been responsible for economic and logistical studies for crude oil acquisition and delivery to maximize value by the refiner.

Historically, refineries operate in a very competitive commodity market with relatively small profit margins – thus, making it critical to accurately evaluate the performance of their crude oil procurement strategy and their delivered cost to the refinery.

Our consultants have assisted clients in the investigation of accidents involving equipment failures, fires and fatalities on drilling rigs, drill sites and at production facilities for both on-shore and off-shore locations.