The Question
Case study · Oil and gas · Post-acquisition investment
Client's brief · reconstructed excerpt · values held in confidence
(withheld) has acquired (withheld)'s mining and oil processing operations. Production runs across two mining sites, each with its own ore processing machines. The company wants to know which investments will raise the site's productivity most profitably, and it needs every one of them to show a return.
Bars cover values SimWell holds and is not releasing. The released figures stand as printed.
§ 1
Several things, and they interact. The company was weighing redundant machines, a pipeline connecting its two mining sites, and the purchase or sale of semi-finished product with third parties.
When a company makes an acquisition, it needs to be sure its investments and process changes pay back. This process was too complex to analyze with heuristic calculations.
§ 2
Because breakdowns and ore do not behave like averages. Maintenance is the most disruptive element of the operation. Each machine can have up to 11 types of failure, and most do not stop it: depending on the type, the machine keeps producing at a reduced rate, and the reductions add together.
The transformation of ore into finished product is also highly variable. Quality and quantity depend on factors such as the ore's composition, so the quantity is converted several times along the way to stay close to reality.
§ 3
By simulating a full year of production for each combination of machines and scenarios. Leadership works through a user interface that exposes every operating parameter. A dedicated screen switches individual machines on and off, so the team can see which redundancy has the greatest impact on productivity, and other scenarios sit alongside it.
Each run shows the maximum and the minimum production possible, so decisions are made knowing the range, not just a single estimate.
Cleared for release
The company knows its next major investment. It can also build a multi-step investment plan that spreads spending over several years, with a tool to check each step against its production objectives and less risk of an unnecessary investment.
SimWell helps operators make better decisions under uncertainty. We build simulation and optimization models that reflect operational reality, test scenarios before committing resources, and transfer capability so teams can run decisions independently.
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