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Assessment of Status Quo Scenario
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10.3. Assessment of Status Quo Scenario
Based on assumptions identified above, a status quo scenario was prepared to benchmark how the Mozyr Oil Refinery will perform if nothing were changed and planned investments (as identified in Section 4) were undertaken over the ten-year timeframe 2005 to 2004. Detailed analysis can be found in attached Spreadsheets 1 & 2. The results are presented in Table 10.3.1.
On average, under this scenario the Refinery will remain profitable, with an average annual profit of 20%. This is a conservative estimate as it accounts for $324.6 million in capital investments over the timeframe, and it is less than profits of recent years. At this rate of profit, reinvestment in capital and other initiatives remain feasible. Over this ten-year timeframe, the MRP will earn net revenues of $751.8 million. Water charges, discharges and net losses (primarily due to shortfalls in customer payments), will amount to $29.9 million, which translates into 4.0% of net profit.
In terms of environmental damages, the plant is assessed to inflict approximately $0.9 million a year. Over the identified timeframe, the plant is estimated to cause about 1% of the value of net profit in environmental damages.
From an operation perspective, though primarily based on rough estimates, materials, energy, labour and maintenance would cost about $2.15 million per year.
Table 10.3.1. Mozyr Oil Refinery – Status Quo Scenario 2005-2014 Dollars in 2001 constant USD
|
Economic Indicator |
Estimated Value |
|
Financial Position of Refinery - Net Revenue (Loss) - Net Present Value (in 2005) - Average Annual Profit |
$751.8 million $683.4 million 20.0% |
|
Water Charges - Total Value (Loss) - Net Present Value (in 2005) - NPV as % of NPV Annual Profit |
($29.9 million) ($27.2 million) 4.0% |
|
Economic Damages to the Environment (Both Outlets) - Tonnage of Monopollutant - Total Value - Net Present Value (in 2005) - Damages/Net Profit |
16,699 tonnes $8.84 million $8.04 million 1.2% |
|
For Assessment Purposes Only Operating Costs - Materials - Energy - Labour - Maintenance |
$0.64 million $13.34 million $2.13 million $5.34 million |
