International Chamber of Commerce Refinery and Pipeline Construction Arbitration
Analyzed numerous construction and design defect issues, on behalf of the Engineering, Procurement and Construction (EPC) contractor involved, in a lump sum $1.6 billion refinery and pipeline project in Mexico. Assessed numerous additional work order claims with reference to the contractual documents and normal industry practice. Prepared expert reports detailing the basis of opinions and findings and testified in International Chamber of Commerce (ICC) arbitration hearings.
MTBE Contamination Dispute
Assisted in defense of oil companies charged with supplying gasoline containing the additive MTBE, which have been alleged to have contaminated water supplies. Led the preparation of a comprehensive report on refinery supply, pipeline distribution, and retail marketing of gasoline in the area subject to the dispute.
Refinery Acquisition and Divestiture Due Diligence
Performed due diligence on behalf of potential sellers and buyers on refineries being offered for sale. Work included assistance with discovery, analysis of refinery yields, operating costs, investment plans and preparation of financial models to support the valuations of the refineries. Activities involved data room document reviews, determination of value using the discounted cash flow (DCF) approach, site reviews and management interviews.
Refinery Business Interruption and Property Damage
Participated in projects for both domestic and international clients analyzing refinery performance gaps relative to peer refineries that were similar in size and complexity. The completed analyses resulted in target setting for multiple maintenance and operating improvement initiatives aimed at achieving cost savings and gross margin increases. The work involved site visits, employee interviews, final reporting, and presentations to company management.
Refinery and Chemical Plant Inter-Plant Contract Dispute
Assessed the financial magnitude and contract basis for numerous claims of non-compliance and non-performance with contracts between an adjacent refinery and chemical plant. Issues included feedstock transfers, pricing, expense allocations, material balance, and reporting.
Refinery Ad Valorem Valuations
Prepared fair market values of many refineries for owners and tax assessors for ad valorem property tax purposes in California, Illinois, Louisiana, New Jersey, Oklahoma and Texas. Prepared reports on fair market values using the three standard approaches to value including cost, comparable sales, and income. Provided expert testimony in litigation.
Refinery LPG Fractionation Tower Collapse and Fire
Investigated and assessed actions and safety practices of the operators and contractors that led to LPG release, vapor cloud ignition, collapse of 125 foot tall LPG tower and fire at U.S. Gulf Coast refinery.
Refinery Operations & Maintenance Practice Review
Performed a review of the refinery operations and maintenance practices following a refinery shutdown and declaration of force majeure event. Reviewed operations, routine maintenance, turnaround maintenance, and inspection records of major refinery units in an effort to determine whether major mechanical work performed was at all related to the triggering event. Completed an expert report and provided expert testimony in this matter.
Refinery Property Damage & Business Interruption Claim Review
On behalf of mechanical service firm, evaluated a BI and PD claim made by a refining company against the firm who provided inspection services at a refinery. Analyzed the refinery operating data and information to evaluate claims that the actions by the service firm caused an emergency shutdown of several refinery process units and more than $100 million in losses.
Environmental Contamination From Former Refinery Site
Evaluated historical operating and maintenance practices that led to ground and groundwater contamination at refinery site in Illinois with emphasis on developing a range of possible types of wastes and quantities of waste generated during the six decade operating lifetime of the refinery. Provided expert report and testimony.
Refinery Expansion Economic Study
Performed economic evaluation of a potential major expansion of capacity at a large Gulf Coast refinery, including development of capital costs, operating and maintenance expense estimates and projected range of refining gross margins.
Refinery Fire Damage & Reconstruction Claim Review
Analyzed numerous claims brought by the refinery purchaser against the seller associated with a crude vacuum unit fire event and resulting reconstruction efforts on behalf of the seller. Prepared expert reports detailing the basis of opinions and findings. Analyzed opposing expert witness report and prepared responses.
Refinery Economic Analysis & Forecasting
Participated in the development of monthly, quarterly, and annual financial analysis and forecasting of refining business unit’s financial and operating performance for communication to executive management and corporate investor relations.
Capital Project Engineering
Provided project engineering coordination on multiple major refinery projects. Led the successful engineering and field construction of a major lights ends debottlenecking project. Successful completion of project construction during the unit maintenance turnaround led to increased recovery capacity of high valued products.
Power and Steam Producing Utility Reliability Improvement
Led a team that performed a critical analysis of incidents, operating design, and operating practices for an integrated power plant providing steam and electricity to a major petrochemical complex. Results of the efforts led to modifications in operating practices and equipment redesign that increased production reliability.
Refinery and Integrated Gasification Combined Cycle (IGCC) Inter-Plant Contract Dispute
Assessed the financial magnitude and contract basis for claim of uneconomic pricing of petroleum coke as a fuel to a integrated gasification combined cycle (IGCC) plant. The refinery company who was the supplier of the petroleum coke was attempting to adjust the contract price terms for the coke with the owner of the IGCC.
Refinery Turnaround Performance Improvement
Led the evaluation of multiple refinery turnarounds on crude, fluid catalytic cracking, coking, and hydrocracking units. Evaluated existing practices and resulting performance relative to the “best” performers in industry. Provided management assistance in setting goals and objectives which targeted significant financial savings and unit availability increases.
Watson Millican & Company brings together considerable technical expertise, operating company experience, and commercial knowledge to assist clients with unique issues in petroleum refining.
Over the last 25 years, the refining industry has been called upon to re-invent its operating practices to improve performance and safety and to re-invest in order to meet new environmental and other regulatory requirements.
Our consultants have performed numerous refinery valuations both for ad valorem tax purposes and during due diligence associated with an acquisition or divestiture of assets.
Clients have asked us to assist with studies to reduce operating expenses, improve maintenance practices, and increase equipment reliability and availability. Our investigations of accidents including explosions, fires and fatalities have been performed for operating companies, as well as legal and insurance clients.