Managing Tanks as a Portfolio of Assets

Abstract

The capital investment in tank storage is a critical component of most energy companies’ business model. Decisions managing these assets are driven by the organization’s overall performance objectives, business policies, balancing the risks and returns associated with different resource allocations. The discussion that follows in the body of this paper has two objectives: The first is to describe a foundation for evaluating decisions about managing tank risk that takes into account all the risk assessment techniques traditionally used but adds to this a way to incorporate these findings into a decision context that also views tanks as part of an organization’s overall business model and managed as part of the organization’s overall portfolio of assets supporting its business model. The second objective is to show there are basic analytical tools that add precision to the perspective described in the first objective through straight-forward quantification.