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Platts Daily Yield

Michael W. Leger, Senior Vice President and Tom Hogan, Vice President Turner, Mason & Company IP Week London, England February 18, 2002

Good morning. My name is Mike Leger of Turner, Mason & Company in Dallas, Texas. John Kingston asked me to give you a brief overview of a new product launched January 2, 2002 in a number of Platts publications called Platts Daily Yield. Slide 1 This new product is the result of a collaborative effort between Platts and Turner, Mason & Company over the past year and a half. Tom Hogan of our firm assisted me in this effort and is with us here today. Some of you may not be familiar with Turner, Mason & Company. We provide consulting engineering services in the downstream segment of the petroleum industry. We've been in business since 1971 and serve a variety of clientele including oil companies, energy lenders, investment bankers, industry associations and others with interests or business in the refining, marketing or transportation of petroleum.


Provide daily yield value assessments of actively traded crude oil grades in eight worldwide regional refining centers


Slide 2 In this collaborative effort with Platts, we set out to provide daily yield value assessments of actively traded crude oil grades in eight worldwide regional refining centers.

Worldwide Regional Refining Centers

Midcontinent West Coast Gulf Coast Caribbean Atlantic Coast Italy




Slide 3 These regional centers include four in the United States, the Caribbean, Italy, AmsterdamRotterdam-Antwerp (the ARA) and Singapore.

Modeling Methodology

Ø Utilizes TMMS refinery modeling platform Ø Based on actual processing capacities in each region Ø Two refinery configurations in each region Ø Summer model = March 1-August 31* Winter model = September 1-February 28 * Summer assessments begin April 1 in 2002 only. Ø Regional product specifications Ø Annual reviews/updates


Slide 4 In developing these regional models, we used the basic platform provided by the Turner, Mason Modeling System (TMMS). We then reviewed and analyzed the actual refining capacity in each of these regions including crude processing and downstream processing capacities. From these analyses, we created models typical of the actual refineries in each region for two configurations, and we created models which include typical specifications during the summer and winter seasons of the year. The summer models will be used from March 1 to August 31 and the winter models will be in effect for the rest of the year. Region specific product specifications were entered into the models since these specifications vary significantly from one region to the next. Each year, we will review each of the critical features of the models and update the models as appropriate to reflect new processing capabilities or product specifications.

Regional Models

Cracking United States Gulf Coast Atlantic Coast Midcontinent West Coast Caribbean ARA Italy Singapore x x x x x x x x Coking x x x x x x x x Visbreaking


Slide 5 As a result of our review of the operating refineries in each region, we decided to develop cracking and coking models in the four regions of the U.S. and the Caribbean and cracking and visbreaking models in Italy, the ARA and Singapore.

Operating Costs

Ø Includes variable costs of refining Ø Categories ­ Purchased fuel ­ Purchased electricity ­ Catalyst and chemicals ­ Other


Slide 6 We made an assessment of variable operating costs in each region including purchased fuel, electricity, catalyst and chemicals and other. In several instances, we have arranged with Platts to get current assessments of the major unit costs such as natural gas and electricity. This will permit capturing the estimated impact on crude values for significant variations in these variable costs such as when natural gas and electricity prices went through the roof in California last year.

Other Feedstocks

Ø Oxygenate additives to mogas Ø Methanol Ø Natural gas to hydrogen plant


Slide 7 We also incorporate the impact of other feedstock costs such as oxygenate additives in gasoline, methanol and natural gas.

Commercial Assessments

Ø Platts daily assessments of refined products values Ø Current assessments of major cost components such as utilities and feedstocks Ø By-product value assessments by Platts/TM&C Ø Freight assessments using Platts spot tanker rates against WS 100 rates for marine shipments Ø Pipeline tariffs where applicable


Slide 8 Platts daily assessments of refined products values, major cost components, by-products, tanker rates and pipeline tariff (where applicable) are applied against the yield estimates predicted by our models. In certain specialty by-products less significant to the crude yield values, Turner, Mason & Company provides the assessments.

USGC Product Slate

Unleaded 87 RFG (spot/waterborne, USGC) Premium 93 RFG (spot/waterborne, USGC) Conventional 87 gasoline (spot/waterborne, USGC) Conventional 93 gasoline (spot/waterborne, USGC) Jet kerosene 54 (spot/waterborne, USGC) LS No. 2 fuel (spot/waterborne, USGC) No. 6-0.7% S (spot/waterborne, USGC) No. 6-1.0% S (spot/waterborne, USGC) No. 6-3.0% S (spot/waterborne, USGC) No. 6-3.5% S (spot/waterborne, USGC) Propane (spot/pipeline, Mt. Belvieu) Propylene (chemical grade-FOB USGC) Normal butane (spot/pipeline, Mt. Belvieu) Isobutane (spot/pipeline, Mt. Belvieu)


Slide 9 Detailed product slates are generated by each regional model which are typical of those yielded by the refineries operating in that region. For example, the U.S. Gulf Coast product slate includes unleaded and conventional regular [87 (R+M)/2] and premium [93 (R+M)/2] grades of gasolines, jet kerosene, No. 2 fuel oil, four grades of No. 6 fuel, propane, chemical grade propylene, normal butane and isobutane.

Singapore Product Slate

Mogas 92 unleaded (spot/cargo, Singapore) Mogas 97 unleaded (spot/cargo, Singapore) Jet kerosene (spot/cargo, Singapore) Gasoil 0.25% S (spot/cargo, Singapore) LSWR mixed/cracked (spot/cargo, Indonesia) HSFO 180 CST 2% S (spot/cargo, Singapore) HSFO 180 CST (spot/cargo, Singapore) HSFO 380 CST (spot/cargo, Singapore) Propane (spot/cargo, Singapore)


Slide 10 The Singapore product slate includes 92 and 97 octane unleaded gasolines, jet kerosene, gasoil, LSWR, three grades of No. 6 fuel and propane.

Crude Grades

Ø Crudes assessed in each region are those actively traded or supplied to refineries Ø A total of 62 crudes evaluated; 29 in USGC Ø Crude assays from TM&C library/producer data Ø Annual reviews/updates


Slide 11 Crude oils actively traded or supplied to refineries in each region are assessed by the regional models. A total of 62 crude oils are evaluated daily in the models including 29 in the U.S. Gulf Coast. Again, the list of crudes to be evaluated will be reviewed and updated annually.

USGC Crudes

Arab Berri Arab Heavy Arab Light Arab Medium Basrah Light BCF 17 BCF 22 BCF 24 Bonny Light Brass River Brent Cabinda Cano Limon Cusiana Escalante Forcados Isthmus Kuwait LLS Mars Maya Merey Mesa Olmeca Rabi Blend Soyo/Palanca Stratfjord Troll WTI


Slides 12-16 These slides list the specific crudes evaluated in each regional model.

Caribbean Crudes

Arab Berri Arab Heavy Arab Light Arab Medium Basrah Light BCF 17 BCF 22 BCF 24 Bonny Light Brass River Brent Cabinda Cano Limon Cusiana Escalante Forcados Isthmus Kuwait Maya Merey Mesa Olmeca Rabi Blend Soyo/Palanca Stratfjord Troll


ARA Crudes

Arab Heavy Arab Light Arab Medium Azeri Light Basrah Light Brent Ekofisk Flotta Forties Gulfaks Iran Heavy Iran Light Kuwait Stratfjord Urals


Italy Crudes

Arab Heavy Arab Light Arab Medium Azeri Light Basrah Light Es Sider

Iran Heavy Iran Light Kirkuk Saharan Blend Urals Zueitina


Singapore Crudes

Arab Heavy Arab Light Arab Medium Attaka Dubai Duri Kuwait Lower Zakum

Minas Murban Oman Qatar Land Qatar Marine Tapis Umm Shaif


Publication Schedules

Crude Oil Marketwire Platts Dispatch

ARA, Singapore and USGC ­ daily U.S. Atlantic Coast ­ Mondays Caribbean ­ Wednesdays U.S. Midcontinent ­ Thursdays U.S. West Coast ­ Fridays All regions ­ daily

Platts Global Alert

All regions ­ daily

Platts Oilgram Price Report

Feeder Crudes table values based on Thursday product prices and freight rates; spot crude assessments based on five-day average Monthly World Crude table FOB breakeven price based on monthly product price averages and monthly spot tanker rates


Slide 17 The Daily Yield assessments appear in a variety of Platts publications. These include Crude Oil Marketwire, Platts Global Alert, Platts Oilgram Price Report and Platts Dispatch.

For more information, you may contact Mike Leger or Tom Hogan at Turner, Mason & Company Suite 2920, LB 38 2121 San Jacinto Dallas, Texas 214/754-0898 (voice) 214/754-5915 (fax) [email protected] or [email protected] (email)




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