Refinery Transformation and Asset Value Growth

Initial Situation

A group of investors owned a mid-scale oil refinery that, over the past several years, had been delivering profitability far below expectations, along with unstable operations and a lack of growth prospects.

The investors’ initial goal was pragmatic: quickly improve process transparency, eliminate critical risks, and prepare the asset for sale.

The contractor was tasked with helping the shareholders choose the future development strategy in one of two formats:

• Light technical modernization, including minimal CAPEX aimed at improving energy efficiency, stabilizing certain units, and addressing critical bottlenecks. This scenario improved operational KPIs but did not change the strategic trajectory.
• Deep technological upgrade and business process transformation, Including installation of new processing lines, optimization of refinery flow schemes, increased product margin, digitalization of management chains, and adoption of modern safety standards.

This option had the potential to elevate the refinery to a materially higher level of profitability.

Initial Assessment

The contractor performed a detailed audit of all key aspects of the refinery’s operations:

• technological processes,
• business processes,
• organizational structure,
• personnel competencies,
• IT and automation,
• logistics and product distribution.

The assessment revealed several critical issues:

• outdated technological equipment;
• low automation and reliance on manual operations;
• high energy intensity of production;
• fragmented processes and duplicated functions across production units;
• insufficient qualification of part of the workforce.

The refinery was not just outdated — it was misaligned within the value-creation chain.

At the same time, the site had strong fundamentals: favorable logistics, a robust engineering infrastructure, and significant potential for scalable modernization.

Based on the findings, the second scenario — a full-scale transformation of the refinery — was selected.

Implementation of the Comprehensive Transformation

The transformation covered every core dimension of the refinery’s operations.

• Equipment and Technologies. Key processing units were modernized, and deep-conversion flow schemes were redesigned. Energy intensity decreased thanks to optimized operating modes and partial replacement of outdated lines with modern equipment. Digital monitoring and analytics tools were introduced, enabling precise control of technological parameters.
• Production Processes. Process maps and operating regimes were fully revised. A significant portion of manual operations was eliminated. Online monitoring and predictive analytics tools were deployed. A unified digital production management system (MES/APS) was implemented, enabling end-to-end planning and control.
• Organization and Personnel. A large-scale upskilling program was delivered for site personnel. Internal technical standards were revised, the structure of workshops and departments was updated, and unified interaction protocols were introduced. This created a modern, efficient organizational model.
• Management, Economics, Logistics. Warehousing, quality control, and production planning frameworks were updated. Fuel-and-energy balances were optimized. A new cost-management model and a KPI system linked to production efficiency and operational performance were implemented.

Results

The refinery returned to stable profitability even before all transformation measures were completed.

• The asset’s value increased substantially — investors achieved a positive return even accounting for transformation CAPEX.
• A new operating model delivered higher predictability, efficiency, and margin.
• The success was so significant that investors are now considering continued cooperation with the contractor to build a new processing unit from scratch, noting the high professionalism of the team and the strategic value of the transformation experience.