Oil Company achieves multi-million saving from asset valuation

Brief

A major international operator of ports owned a fuel bunkering facility in the Middle East operated by an Oil Major, who was exercising an option to vacate the facility.

The bunkering agreement provided limited guidelines for the valuation of the assets and the amounts to be paid and consequently the difference in value between the parties was material.

Hickman Shearer were hired by the oil bunkering company to provide a market valuation.

Work

During our analysis of the agreements two key issues arose that enabled us to robustly challenge the validity of the assessment of the operators valuation.

As a result, reflecting our valuation assertions, we provided a robust and defendable valuation reflecting our interpretation of the agreement.

Outcome

In negotiations the parties agreed compensation in-line with our interpretation of the agreement. This resulted in a multi-million reduction in saving for the operator.