Forming the optimal commercial structure for a joint venture oil refinery
Commercial Advisory – Oil
The Engagement:
Commercial Advisory
The Client:
A joint venture between two leading Middle Eastern National Energy Companies
The Challenge:
How to commercially operate its refinery to maximise margins while meeting the needs of its shareholders
Duration:
9 months
How Energex helped:
- Completed a detailed review of the current contractual framework for both crude and refined products to determine how these could be improved to increase margins
- Conducted a bespoke peer review examining the commercial structure and operations of other joint venture refiners in the Middle East and Europe detailing ‘good practices’
- Developed and quantitatively assessed alternative commercial operating models for the joint venture, identifying the incremental value, cost and characteristics of each model
- Facilitated discussions between multiple stakeholders to align on the preferred operating model for the joint venture and assisted with the proposals to the Board for final review
- Acting as ongoing partners for the senior managers across the joint venture
Tangible Impact:
- Detailed understanding of the required changes to the current contractual framework to reduce costs and improve margins
- Ability to adopt and leverage good industry practice to avoid common pitfalls and implement the optimum commercial interface between the joint venture and its shareholders
- Quantified “benefits case” for the recommended commercial operating model
- An implementation plan is being used to guide the development and roll-out of the new operating model
- Facilitation of multiple alignment sessions working with the key stakeholders from across the different organisations, with the need to recognise varying agendas and cultural sensitivities