In a joint-ownership refinery, the participants can use their share of the refinery in any way they wish, provided it is not detrimental to the other participant or refinery as a whole. Therefore, at any given time, the participants will be using different proportions of their capacity entitlement on the crude and downstream units to produce a wide range of finished products, some of which are common to both participants and others produced for one participant only. Also, the inventory of intermediate or process stocks will change constantly.

At some stage, the ownership of various products and intermediate stocks has to be determined. In fact, the allocation of feedstocks and production is an exercise required under the processing agreement. This chapter describes how this is done. Product allocation for an operating period is routinely done at the end of the operating period. For example, if the operating period is a month, say January, product allocation will determine the ownership of products and process stocks at the end of January 31. Also, product allocation requires all operating data for the entire month, which would be available only after January 31. The actual ownership of products and process stocks in the refinery inventory on January 31, may be available only some weeks later, after the completion of the product allocation exercise for the month of January.

Product allocation is carried out in two distinct stages: preliminary allocation and final allocation. Essentially, the preliminary allocation consists of collecting data from all sources, feeding...