With all the recent buzz about the energy sector, I thought I'd define a common piece of industry jargon: turnarounds.
The expression "turnaround" can be particularly confusing, because investors commonly use this term to denote a company that is improving on previously lackluster performance. A turnaround in the refining industry, however, refers to planned maintenance activity that reduces or fully suspends throughput for a period of time.
Turnarounds are required in order to maintain productivity and safety at a refinery. They're performed regularly, most often every four or five years. A partial turnaround only takes one or more units offline, whereas a total turnaround takes the entire plant down. Over 30,000 procedures -- from cleaning to repairs to tie-ins of new equipment -- may comprise the work involved in a major turnaround, which can last a month or longer.
For reasons of both speed and safety, turnaround activity runs 24/7 until it is complete. That equates to a lot of overtime for the hundreds or thousands of contract workers brought on board for the project. Salary costs generally work out to about half the cost of the turnaround, which often runs into the tens of millions of dollars. Valero
The horrific explosion at BP's