Baker & O'Brien, Inc.

Experience

Experience

 

Case Attribute: Crude Oil Valuation

Article
Bitumen Economics/Refinery Reconfiguration
Using the PRISM refinery simulator, calculated the economics of replacing the current refinery crude slate with Canadian synthetic-bitumen (syn-bit) or condensate-bitumen (dil-bit) blends. Cases were considered with and without capital investments and potential investment costs were also estimated.
PRISM Data or Analysis , Crude Oil Valuation , Pricing , Product Quality
Bitumen Valuation
Reviewed historical supply and demand of high TAN crude oil to the U.S. Gulf Coast refineries and addressed future trends which would impact a TAN discount.  Estimated a TAN discount using two methodologies:  Market based approach and Return on Capital investment approach.  Calculated the impact on bitumen value as a result of asphaltenes content.  Calculated the value added by a diluent recovery unit in a Canadian Oil Sands upgrader.
PRISM Data or Analysis , Crude Oil Valuation , Pricing , Product Quality
Bitumen Valuation Study
Developed a methodology using a marker crude oil to value bitumen at the production site.  Methodology addressed differences in qualities (sulfur, acid number) and refining yields.  Transportation costs from the valuation hub to the production site were developed.  Blending methodologies were evaluated to develop bitumen blends for comparison to the marker crude oil.
Crude Oil Valuation , Pricing , Product Quality
California Crude Oil Study
Developed a detailed California crude oil supply, demand, and transportation balance (by refinery) for a mid-size independent California crude oil producer. Results were used in client's annual report for shareholders and security analysts.
Crude Oil Valuation , Product Quality
Crude Oil Evaluation
Evaluated several processing alternatives and combinations of various refining assets located in the Caribbean and on the U.S. Gulf Coast to process heavy Ecuadorian crude oil production.
Crude Oil Valuation , Product Quality
Crude Oil Evaluation
Assisted an independent California crude oil producer in establishing a pricing formula for sale of its heavy oil production under a long-term contract. The analysis included a historical review of relative crude values and the key price drivers affecting the value differences between grades.
Crude Oil Valuation , Pricing , Product Quality
Crude Oil Market Studies
Prepared several detailed assessments of West Coast crude oil markets for an independent California producer. Studies included preparation of detailed regional balances, identification of target refineries for client's crude oil, and estimation of its value relative to imported and domestic alternatives. Results were presented to client's executive management and at its banker and security analyst conferences.
Crude Oil Valuation , Pricing
Crude Oil Marketing Strategy
Prepared a marketing strategy for new production in Russia's Sakhalin Island region. The study analyzed potential markets for new production of crude oil, transportation options and costs, and contracting strategies.
Crude Oil Valuation , Offshore , Pricing , Product Quality
Crude Oil Marketing Study
Assisted the U.S. General Accounting Office in evaluating the potential for marketing of Naval Reserve crude (Elk Hills) in markets east of the Rockies.  Work included evaluation of breakeven refining values, assessment of yield and contaminant penalties, and analysis of the potential for supplying this crude to the Gulf Coast market.
Crude Oil Valuation , Pricing , Product Quality
Crude Oil Quality Dispute
Acted as expert witness in a dispute between a major oil company and a small crude oil supplier that allegedly delivered "dumbbell" crude into the oil company's common carrier pipeline system.  Prepared a report covering standard industry pipeline practices, crude oil quality acceptance, crude oil trading, and refining values of various crude oils.  Calculated damages incurred as a result of the poor quality crude oil delivered and the impact on refiners receiving crude from the pipeline.
Crude Oil Valuation , Expert Witness/Testimony , Pipeline , Pricing , Product Quality
Crude Oil Royalty Litigation
Assisted in a lawsuit between an oil company and a royalty owner of oil company's crude oil production for alleged underpayment.  Work included identification of the various markets for this crude oil to established whether its value in these markets was consistent with the price received.
Crude Oil Valuation , Pricing , Product Quality
Crude Oil Valuation
Conducted a valuation for a new grade of Atlantic crude oil production, likely to be marketed to refineries in the U.S. East Coast and U.S. Gulf Coast. The study used PRISM for several specific refineries to calculate refinery breakeven values for the target crude in comparison to several competing grades. The analysis also included a historical review of the calculated relative crude refining values and the key price drivers affecting the value differences between grades.
PRISM Data or Analysis , Crude Oil Valuation , Pricing , Product Quality
Crude Oil Supply Study
Assisted client in constructing a crude oil supply balance for PADD II and developed incremental crude oil valuations for refineries in PADD II using PRISM, Baker & O'Brien's proprietary refining industry analysis tool.
PRISM Data or Analysis , Crude Oil Valuation , Pricing , Product Quality
Evaluation of New Crude Production
Evaluated a new crude oil stream produced by the client from offshore platforms in the West African country of Equatorial New Guinea.  Evaluation included identification of potential markets and the values of this crude oil into these markets.
Crude Oil Valuation , Offshore , Product Quality , Project Feasibility
Long-term Outlook - Global Refining and Light/Sweet Crude
Completed a study that examined longer-term developments of the worldwide refining industry and strategies for maximizing the sales value of light, sweet crude grades.  The study identified and evaluated a long-term pricing strategy for light/sweet crude oil as a response to expected changes in crude oil quality, environmental legislation and mandates, and regional growth trends in petroleum demand.
Crude Oil Valuation , Pricing , Product Quality
Market Analysis and Term Supply Contracting - Synthetic Crude Oil
Assisted a Venezuelan joint venture company in developing a marketing strategy for a new synthetic crude oil. The assignment included an evaluation of the potential market for the new production, modeling of refinery values for the new production, detailed assessments of potential supply agreements, and assistance in term contract negotiations.
Commercial Terms Review , Crude Oil Valuation , Pricing , Product Quality
Marketing Effort for Ecuadorian Crude
On behalf of a major international oil trading company, developed ongoing valuations for Ecuadorian Oriente crude oil in the US West Coast and Gulf Coast markets. Client used the results to achieve maximum values for the Oriente crude that it marketed under a long-term contract.
Crude Oil Valuation , Pricing
Oil and Gas Royalty Valuation
In support of a potential public offering, calculated the net present value of a defined royalty interest payable on all proceeds from the sale of crude oil, condensate, natural gas, and natural gas liquids produced from the Gippsland Basin in the Bass Strait off the coast of Australia. Worked in conjunction with an oil reservoir firm that prepared field production estimates over the next 20 years. Report became part of the offering memorandum submitted in compliance with local Public Securities Commission regulations.
Crude Oil Valuation , Offshore , Pricing
Oil Refining Crude Supply Dispute
Provided engineering and project management consulting services for litigated dispute between two large oil companies concerning an acidic crude oil supply agreement (high TAN crude, high acid crude). Prepared expert report.
Commercial Terms Review , Crude Oil Valuation , Product Quality
Pipeline Quality Bank Dispute
Assisted in a dispute involving crude oil quality bank payments demanded by a pipeline consortium transporting a company's oil through Central Asia.  Studied the quality bank calculation procedure in order to demonstrate if the methodology described in the tariff had been properly applied.  Provided examples of methodologies used in other quality banks.  Prepared quality bank calculations based on application of the methodology.  Testified at an arbitration in London.
Arbitration , Crude Oil Valuation , Expert Witness/Testimony , Pipeline , Pricing , Product Quality
U.S. Midcontinent Crude Valuation
Evaluated crude oil refining values and logistics for several targeted refineries in the U.S. midcontinent area.  Evaluated expected price parity points for domestic crude oils versus competing grades delivered to the refineries via pipeline.
PRISM Data or Analysis , Crude Oil Valuation , Pipeline , Pricing , Product Quality
Product Supply Contract Review
Following the notice of cancellation of a product supply agreement based on crude processing, to be replaced with an agreement where refined product prices were to be supplied based on adjustments to posted prices, evaluated the economics of the proposed supply contract compared with the existing crude processing agreement.  Determined the required level of discount to OPIS prices to match product cost under the existing crude processing arrangement.
Commercial Terms Review , Crude Oil Valuation , Pricing , Product Quality
Refinery Feasibility Study
On behalf of a crude oil transportation company in Western Australia, investigated the feasibility of establishing a small refinery to process local crude production. Evaluated the technical and economic considerations involved in a range of alternative projects to refine crude oil and market products to local industries and other consumers throughout the region. Conducted negotiations with crude oil suppliers and commercial customers. Project was eventually terminated due to inability to obtain satisfactory financing.
Crude Oil Valuation , Pricing , Product Quality , Project Feasibility
Crude Oil Valuation and Marketing Plan
Identified target markets, coordinated the assay evaluation, assessed market values, and developed a marketing plan and marketing brochure for a new crude oil to be produced in offshore West Africa.  The initial crude oil sales price was estimated, based on quality and location, and was presented in terms of global crude price benchmark grades.
Crude Oil Valuation , Pricing , Product Quality
Crude Quality Analysis
Assisted with crude oil quality analysis from new production field in order to establish initial valuation estimates.
Crude Oil Valuation , Pricing , Product Quality
Shale Oil Market Study
Prepared market study for upgraded shale oil in several refining centers over extended project life. Estimated refining value and ocean freight in selected refineries to yield netback value at upgrader dock. Compared estimated refining value for upgraded shale oil to estimated refining value of typical swing crudes for each region.
Crude Oil Valuation , Pricing , Product Quality
Monterey Shale Oil Study
On behalf of a California refiner, reviewed the potential for production of Monterey shale crude oil in the San Joaquin Valley and the accessibility of this crude to the client's refining system.
Crude Oil Valuation , Pricing , Product Quality , Project Feasibility
Trans-Alaskan Pipeline (TAPS) Quality Bank
Provided expert testimony before extended hearings of both the Federal Energy Regulatory Commission (2004) and the Alaskan Public Utilities Commission (2007) with respect to the methodology used to value various Alaskan crude oil streams entering TAPS.  Issues included how to calculate the refining values of such crude oils in U.S. West Coast refineries and how changes in the indicated market values of crude oils should be handled from a retrospective basis.  
Crude Oil Valuation , Expert Witness/Testimony , Pipeline , Pricing , Product Quality
Alberta Bitumen Valuation Study
Evaluated various approaches to valuing Canadian Oil Sands bitumen blends (DilBit). Approaches for valuation at a Hardisty, Alberta basis included: differential to a marker crude oil, refinery return on investment, parity to Mexican Maya and other approaches, including statistical regression. Evaluated approaches and potential marker crude oils and provided recommendations to client.
PRISM Data or Analysis , Crude Oil Valuation , Pricing
Refinery Crude Oil Losses following Fire
Estimated the losses (if any) incurred by a refiner in disposing of its crude oil purchases following an extended shutdown of its refinery as a result of a fire. The results were used by management to gauge the effectiveness of its crude oil supply and trading organization.
Commercial Terms Review , Crude Oil Valuation , Pricing
MidWest U.S. Crude Oil Study
Identified the factors that likely contributed to a significant widening of the price differential between Light Louisiana Sweet Crude oil (LLS) at St. James, LA and WTI crude oil in Cushing, OK. Developed a three-year outlook for U.S. PADD 2 crude oil supply and disposition, and the expected price differential between LLS and WTI crude oil.
Crude Oil Valuation , Pricing
Shale Oil Market Study
Developed target markets, estimated values for upgraded shale oil in various U.S. refineries, and expected price netbacks to the project site. Developed crude oil supply and demand balances to determine which crude oils would be displaced and the expected pricing impacts.
PRISM Data or Analysis , Crude Oil Valuation , Pricing
Crude Oil Valuation Study
Estimated the value of various crude oil grades in a number of refineries that compete for the acquisition of local crude oil production in the U.S. mid-continent.
Crude Oil Valuation
Pipeline Quality Bank Dispute
Reviewed claims by a crude oil refiner to adjust the valuation of the residuum cut in the TAPS Quality Bank.  Reviewed the residual fuel markets and the delayed coking capacities and operations for several West Coast refiners.  Provided written and oral testimony before a FERC Administrative Law Judge.
Crude Oil Valuation , Expert Witness/Testimony , Pipeline , Pricing
Condensate Splitter Due Diligence
Conducted asset due diligence activities:  inspected facility under construction; provided market incentives, operating costs, risk overview, and staffing recommendations for successful acquisition of condensate splitter and associated logistics. 
Crude Oil Valuation , Operations/Maintenance , Project Feasibility
Crude Oil Marketing Study
Evaluated options for marketing light tight crude oil (LTO) including calculating the breakeven refining value in specific refineries and its value as diluent in a diluent-bitumen blend.
Crude Oil Valuation
Environmental Impact Support - Rail Terminal and Refinery
Prepared an expert report on behalf of a local government agency, as part of an environmental impact process, to address the key technical changes resulting from a project to construct a crude oil rail terminal and modify an existing refinery to allow it to process increased amounts of light domestic crude oil.   
Crude Oil Valuation , LP/Planning Practice
Condensate Splitter Market Study
Developed market study and economics for a "grassroots" Eagle Ford condensate splitter located in Corpus Christi.  Evaluated alternate locations and presented to CEO and management.  
Crude Oil Valuation , Pricing , Project Feasibility
Oil Disposition Study
Developed economics of crude disposition alternatives for producer's growing production of light tight oil.  Alternatives included local and distant refining values with appropriate logistics costs.
Crude Oil Valuation , LP/Planning Practice , Pipeline , Pricing
Refining Alternative Crude Study
Prepared an evaluation of the economics of processing alternative crude oils in a Midwest refinery. 
Crude Oil Valuation
Crude Marketing Study
Prepared a crude marketing study for a Utah black wax crude oil producer.  Evaluated refineries outside of Utah which could receive crude oil via railcars and the expected netback price to the crude oil producer.  Identified and ranked the refineries which would yield the highest netback value to the producer.  Provided contact information and initiated meetings with the crude oil producer and potential refinery candidates for processing the Utah black wax crude oil.
Crude Oil Valuation
Refinery Business Interruption Dispute
Following an unplanned shutdown, caused by extensive equipment damage, evaluated the refinery operation to confirm that all mitigation steps had been taken and also confirm the claimed business interruption losses.
Business Interruption , Crude Oil Valuation , Forensic Analysis , LP/Planning Practice