M&A Due Diligence Project support completed
M&A Due Diligence Project support
In February 2020 EPS was approached by an Oil Trading company which was considering to acquire an Oil Refinery in Europe. EPS was requested to provide M&A Due Diligence (DD) support in the area of Asset Management, Maintenance, Turnarounds, Inspection, Asset Integrity, Process Safety. EPS also carried out a Project Review of a future Gasoil upgrading project.
The assets in the transaction consisted of a medium size complex Refinery with pipelines, rail -, road-gantries, jetties logistics facilities and several Terminals.
The EPS DD support was carried by a team of 8 consultants at the time that Corona restrictions came into effect. The DD support had to be provided taking into account the local Covid-19 restrictions and the DD activities had therefore to be carried out in a different way:
- The DD support started mid-March 2020 with a review and analysis of available information in the Virtual Data Room (VDR) by all EPS DD Team members via a secured website.
- On-site visits and walkthrough inspections in the facilities were not possible due to local Covid-19 restrictions. All interviews by EPS team members on specific DD subjects with Refinery staff were done in remote interview sessions.
- As an alternative to on-site inspection and interviews, a series of video camera recordings were made of the facilities based on a list of requirements developed by the EPS DD-team. These recordings included: Central Control room, Crude storage tankage, Crude distiller units, pipe-racks, hot pumps, the Integrated Powerplant, the FCC complex, car and rail loading stations, Jetties, etc. This alternative approach worked very well and the added benefit was that the videos delivered recorded evidence of the state of the assets in addition to the EPS M&A DD written reports.
- Our customer was convinced of the usefulness of the video recording, but still demanded an EPS expert to walk through the facilities when it was again possible with local Covid-19 restrictions. Fortunately a local EPS consultant could visit the refinery and made an inspection walkthrough and made important observations for the DD reporting.
The DD final reports were delivered to the customer mid May 2020 and were discussed in detail with the customer and the appointed banks involved in financing the deal.
M&A Hydrocarbon Evacuation Plan
After completion of the M&A Project Due Diligence support in May 2020, the same customer requested support for an Hydrocarbon Evacuation Plan required by the appointed banks financing the deal. The main objectives of the Hydrocarbon (HC) Evacuation Plan were to develop a high level plan:
- To export marketable Hydrocarbons: crude oils, feedstocks, components in a short as possible time period.
- The export of the Hydrocarbons should take place at the lowest possible costs.
- The Hydrocarbons should be exported in a safe and reliable way.
A thorough analysis was done of Refinery stocks levels, logistics structure and Refinery export capabilities for Crudes, Feedstocks, Components and Products.
The HC Evacuation Plan was developed together with EPS partner Systems Navigator and a discrete event simulation model was built to evaluate the HC Evacuation scenarios. The logistic model included marine and landside infrastructure such as jetty lines, berths, road and rail gantry, pipelines and their related constraints.
The HC Evacuation Plan final report was delivered to the customer end of July 2020 and was discussed in detail with the customer and the appointed banks involved in financing the deal.