Our first choice would be to use rental evidence, but oil refineries aren’t rented out in the open market. Our second choice would be the receipts and expenditure method. But historically refineries were owned by oil companies who also operated everything both “upstream” and “downstream” – from the oil well to the petrol pump – and it wasn’t possible to separate the figures for the refinery from those of the rest of the business.

The petrochemical industry has changed a lot over the years. Production facilities, including refineries, are now often sold to other operators. This means both the buyer and the seller must have an idea of the facility’s profitability. Given this, we can bring receipts and expenditure into play where available at the end of a CB valuation. This is the “stand back and look” stage. It’s a way of checking whether the valuation properly reflects the strengths and weaknesses of the refinery and making any necessary adjustments to it.