MathPro Inc. has conducted a series of studies for North American crude oil producers to establish valuations for certain heavy crude oils and synthetic crudes produced by upgrading these crude oils.

The studies have focused on valuing these crudes in cracking refineries in the U.S. Gulf Coast and East Coast and in coking refineries in the Gulf Coast and California. We estimated the values of these crudes relative to specified marker crudes in each region, using refinery LP modeling and a standard modeling approach for crude valuation. This approach involves a series of refinery model runs in which incremental volumes of the crude oil of interest are progressively added to a specified refinery crude slate, displacing equivalent volumes of the base crude blend from the crude slate. Results returned by the series of model runs yield a “demand curve” for the crude oil and refinery of interest, relating the marginal value of the crude oil in that refinery to the crude’s volume share of the refinery’s crude slate.

Clients have used the results of these valuation studies to support investment planning for crude production and refinery upgrading projects.