> I am an accountant by profession. However, gone are the days when traditional accounting jobs like month-end closing, accruals, allocations, and accounts payable are the most value-adding functions of an accountant. Today in Shell, the mechanical bits of accounting are all off-shored to the shared service centers. Hence, the accounting jobs on-shore have become less in number and have evolved into what is called Finance in the Business. Becoming FiB involves a change of mindset and this has become more apparent to me when I joined Shell's Supply business as integrated margin advisor. As IMA, I had to understand how an oil refinery works from a technical standpoint. For example, if last year someone had asked me to draw a simple schematic of a semi-complex refinery like Tabangao, I wouldn't know where to start. Today, I will be able to converse with a chemical engineer and draw a simple flow of hydrocarbon from the de-salter, crude distiller, thermal cracker, hydro de-sulfurizer, sulfur recovery and ultimately to the tanks. I know what are the streams that come out of the reformer and I know what are the specs for octane, Reid vapor pressure, sulfur, viscosity and p-value for products. And for me to learn all these, I had to take off my accountant's hat and put on the hat of a geek who's amazed by science and hungry to learn new things. I stepped out of my comfortable corner and started asking questions that are non-accounting in nature but whose answers would otherwise help me understand the business that I support even more. And how does this help me in my job? Firstly, when the technical people begin to rattle off in a language that does not seem to be English, I will not feel lost. I will in a better position to clarify, complement, and at times, even challenge the decisions that the business will make albeit from a finance standpoint. In short, I will not sound stupid to the people that I work with. Knowing what is going on is also important because almost anything has an impact to the company's books and if an accountant's nose is stuck in the books, he will be ill-prepared to anticipate these impacts and to advise the business accordingly.
> The course that I went to last week, Refinery and Supply Economics, further opened my eyes even more about the fundamental differences between how an accountant thinks and how a refinery economist thinks. For example, if someone asks an accountant how much money is saved by a new heat exchanger that will reduce energy consumption by 2 tsrf (tons standard refinery fuel), the most likely response would be calculated from the production cost of refinery fuel (i.e. $/ton cost of crude x % refinery fuel per ton of intake + $/ton energy cost to process crude). This answer would be incorrect from an economic standpoint. The right one would then be first to know what is inside the refinery fuel pool. If the fuel pool contains imported natural gas, residue, cracked fuel oil and fuel gas, which one would you first "back out"? An economist would then say, the material with the highest value would be the first one backed out since that would save the refinery most money. Second question would be, what is the value of each of the 4 materials in your fuel pool? This question can be answered by knowing what is the alternative outlet of the materials. Will they be blended off into the low-sulfur fuel oil pool? Will they be sold in-land at import parity prices? Or is there no in-land demand and thus any extra tons would have to be exported at a discount? As one can see, refinery economics is not very straightforward but it is very interesting and forces an accountant like me to think in a different manner. Moving into a finance role that is so closely-tied to the business is indeed a big challenge for me. However, the challenges are not insurmountable, provided that one is open to new ways working, new ways of thinking and new ways of looking at what's happening around him. And that's exactly the new attitude that I am going to bring with me to the new and exciting year ahead. Now after reading this, tell me if it felt like you are reading something that an accountant has written. If yes, then I still have my work cut out for me. If not, then at least I've already had a good start! 4
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> Sent from my iPad
> The course that I went to last week, Refinery and Supply Economics, further opened my eyes even more about the fundamental differences between how an accountant thinks and how a refinery economist thinks. For example, if someone asks an accountant how much money is saved by a new heat exchanger that will reduce energy consumption by 2 tsrf (tons standard refinery fuel), the most likely response would be calculated from the production cost of refinery fuel (i.e. $/ton cost of crude x % refinery fuel per ton of intake + $/ton energy cost to process crude). This answer would be incorrect from an economic standpoint. The right one would then be first to know what is inside the refinery fuel pool. If the fuel pool contains imported natural gas, residue, cracked fuel oil and fuel gas, which one would you first "back out"? An economist would then say, the material with the highest value would be the first one backed out since that would save the refinery most money. Second question would be, what is the value of each of the 4 materials in your fuel pool? This question can be answered by knowing what is the alternative outlet of the materials. Will they be blended off into the low-sulfur fuel oil pool? Will they be sold in-land at import parity prices? Or is there no in-land demand and thus any extra tons would have to be exported at a discount? As one can see, refinery economics is not very straightforward but it is very interesting and forces an accountant like me to think in a different manner. Moving into a finance role that is so closely-tied to the business is indeed a big challenge for me. However, the challenges are not insurmountable, provided that one is open to new ways working, new ways of thinking and new ways of looking at what's happening around him. And that's exactly the new attitude that I am going to bring with me to the new and exciting year ahead. Now after reading this, tell me if it felt like you are reading something that an accountant has written. If yes, then I still have my work cut out for me. If not, then at least I've already had a good start! 4
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> Sent from my iPad
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