Supporting a Major Oil Company Acquiring a Competitor

Antea Group supported a major oil company with its acquisition of a competitor, including a refinery, fuel terminal, and retail facility portfolio.  The client requested a third-party review of these assets to establish a financial reserve for the associated environmental liabilities that could withstand the scrutiny of the client’s auditors. Various remedial strategies had been implemented unsuccessfully in the past, and the site had transferred ownership multiple times in previous years. Project challenges also included a high-value sensitive receptor (a major river) immediately adjacent to the site, and a third-party release created a commingled plume.

Antea Group’s extensive review of the refinery’s environmental condition included developing a detailed understanding of the subsurface contaminant distribution, regulatory drivers, and historical remedial actions. This included interviewing current environmental staff as well as conducting a thorough regulatory agency case review. The current remedial strategy was stagnant, and a new remedial solution was recommended after a technical review of several alternatives and cost analysis using probabilistic cost modelling software for each alternative. This process let the review team visually map out complex, multi-layered decisions in a sequential and organized manner using decision trees. The cost modeling software utilized a Monte Carlo simulation which assigned a cost to each variable of the decision tree, allowing the client to select the optimal path for planning and cost forecasting.

The client deliverable provided a detailed review of the current environmental conditions and provided several alternative approaches to maintain regulatory compliance and reduce or eliminate environmental liabilities. The decision tree analysis and modelling addressed the complexity of the remedial strategies along with sensitive receptor protection, the added layer of commingled plumes, and new and emerging contaminants of concern that were not previously recognized. The recommendations provided allowed the new management to confidently set an environmental reserve for the site that could be defended with the client’s auditors.