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November 1, 2011 00:40 UTC (2)    (2)

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There are six refineries in the world better than all the others.

That’s the conclusion of Solomon Associates, which has an ongoing benchmarking of the
world’s refineries determined by a variety of tests on operational and financial performance.
Those benchmarks include Solomon’s Energy Intensity Index, a cost efficency index,
measures of operating efficiency and the refinery’s return on investment.

The six are … well, Solomon’s Michael Hileman didn’t say in a speech to the Downstream
Asia conference, part of Singapore International Energy Week. Afterward in an interview, he
said he didn’t even know the identify of all six, which he referred to as the “World’s Best.”
But they don’t get that top designation just by having a good year. It needs to be sustainable
in the biennial study that Solomon undertakes.

The six come from a pool of 341 refineries that were studied and rated. Three are in North
America, two are in Europe, and one is in Asia; that was the extent of identifying the
supreme half-dozen. Solomon has been doing its surveys since 1994, and the data
presented goes up through its 2008 studies. Research into 2010 performance is ongoing.

While it would be nice to know the identity of the six refineries, Hileman focused more on
their shared characteristics. They tend to be big, with an average distillation capacity of
355,000 b/d. The average refinery of the 341 plants is 187,000 b/d.

Some of the deep conversion capacities they tend to share aren’t that much different than
the average refinery in the larger sample; for example, cat cracking as a percentage of total
capacity is 22% for both the 341 and the top six. One significant difference: the top refineries
average diesel hydrotreating capacity as 31% of distillation capacity, while the rest of the
pool was 25%, allowing the top refineries better ability to capitalize on the world’s tight
distillate markets.

What does being the best mean in terms of money? Solomon says $2.04/b. That is the net
cash margin that Hileman said can be calculated as the advantage for the “World’s Best”
refineries. Of that, he said $1.77 can be tied to better efficiency, like advantages in
maintenance costs and conversion yields.

Hileman, in his presentation and interview afterward, emphasized two factors that he found
among the best performers, areas that aren’t readily identifiable in the list of efficiency
factors.

The first is personnel. While the top six did not rank in the first quartile of top refineries for
personnel management — they were in the first quartile for all other categories — they
were in the second quartile, near the cutoff line. Hileman said many refineries, faced with a
need to reduce costs, cut personnel as a first option, “but it takes people to make
improvements.”

In particular, he lamented the disappearance of process engineers, whom he said go to

work every day “with the objective of how do I make more money with my process unit.”
Those positions often have been filled by people who become mentors to young engineers,
Hileman said, but they are becoming a rarity. Too many process engineers, or those with
potential to be ones, are deciding that a management track is the only way to higher pay at
a refinery. But Hileman said there should be a track to a job that allows a process engineer
to stay in that job, maximize the refinery’s operations and still get paid well.

The second area Hileman emphasized is in the application of chemicals and catalysts. “The
number one refineries see it as a profit opportunity, not as a cost,” Hileman said. The best
refineries look at using higher-quality (but more expensive) catalysts in their processes if it
means better yields. The refineries that performed more poorly in Solomon’s rankings

https://blogs.platts.com/2011/11/01/out_of_more_tha/ 4/10/2019
Out of more than 340 oil refineries, a half-dozen that stand out from the crowd - The Barr... Page 2 of 3

approached the use of chemicals and catalysts more from a perspective of keeping costs
down.

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Tags: Refining, Talent

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John Kingston, Reporter

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COMMENTS

Anil Aleti at September 22, 2015 12:18

While I appreciate Solomon Associates as a highly regarded and respected

rating benchmarking agency, wouldn’t it help to transparently publish the
refineries names? Or is the full copy of the report made available to only those
who buy a license to their report?

› Reply
No name at August 22, 2016 17:07

Anil, publishing any names would constitute a violation of commercially

sensitive info. clause. You see even in the report outs from Solom you see
performance as a relative value to a pace setter, but you do not know the
identity of the pace setter in each category.

› Reply

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