PBF Energy is an independent oil refiner that has tripled its size through acquisitions since 2008. It acquired SAP to serve as its technology backbone to support consolidations, finance, maintenance, and other functions across its growing business. For new acquisitions, PBF evaluated integrating assets into its existing SAP system or implementing new SAP environments. Key challenges in implementations included aggressive timelines and validating data. Success depended on experienced teams, partners, and applying lessons learned to continuous improvement.

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A collaboration between:
Matt Flanagan, Partner – Opportune LLP
Richard Loew, CIO – PBF Energy
Making Downstream Refining Mergers & Acquisitions Work

2. • PBF is a diversified and growing Refining
Company – one of the largest
independent refiners in the US
• Acquired 5 refineries in 4 PADDs since
2010 – 2 acquisitions in last year
• Successful asset integration due to:
– Strong communication
– Collaborative IT planning and decision making
– Heavy reliance on deeply experienced partners
Main Message
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TORRANCE
CHALMETTE
TOLEDO
PAULSBORO
DELAWARE
CITY
884,000 barrels per day of throughput capacity in four PADDs

3. • Why SAP?
• Integration Options
• Implementation Challenges
• Implementation Successes
• Key Lessons Learned
• Questions
What We’ll Cover
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4. Introduction & Overview
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Expected EBITDA Growth
• Rapid Growth Enablers:
– Partnered with experienced 3rd parties for:
• Initial crude purchases
• Leveraging an intermediation model for
commodities, supply, trading and marketing
• Defining the IT strategy and developing the IT
Roadmap
– Established an entrepreneurial culture by:
• Being flexible and adaptable
• Challenging paradigms and,
• Encouraging creativity to overcome aggressive
timelines
– Built an IT platform which would be:
• Scalable
• Affordable in a volatile refining crack environment
PBF has tripled its size and throughput since its formation in 2008

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WHY SAP?

6. Why SAP?
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Addresses PBF’s IT Base
Principles of:
Proven Record of:
To Become PBF’s
Technology Backbone
For:
•Supporting business model
•Satisfying functional requirements
•Being easily scalable
•Meeting Audit and SOX requirements
•Commitment to the Energy Industry
•Penetration of the Downstream Refining Sector
•Supporting Companies’ scalability
•Supporting centralized/decentralized business models
•Abundant and diverse support options available
•Consolidations
•Treasury
•Finance & Accounting
•Refining Maintenance and Warehousing
•Non-Hydrocarbon Procurement

7. • IT is not on the Critical Path!
• IT Challenges and Goals During Acquisitions are:
– Safe Operations
– Refinery Can Distribute Product on Day 1
– Products are billed and,
– Vendors get paid
Key Points to Take Home
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INTEGRATION OPTIONS

9. Integration Options
2008 O’Malley &
team form PBF
Dec 2010
Completed
acquisition of
Paulsboro Refinery
Oct 2011
Delaware City
Refinery
Operational
Mar 2011
Completed
acquisition of
Toledo Refinery
Jun 2010
Completed
acquisition of
Delaware City
Refinery
Sep 2012
Completed first two
phases of East Coast
rail infrastructure
Q1 2013
Completed rail
project at
Delaware City
Nov 2015
Completed
acquisition of
Chalmette Refinery
Apr 2014
PBF Logistics
launches IPO
(PBFx)
Jul 2016
Completed
acquisition of
Torrance refinery
Apr 2016
PBFx closes
acquisition of East
Coast Terminals
PBF has tripled its size and throughput capacity since its formation in 2008
2008 2009 2010 2011 2012 2013 2014 2015 2016
Company Formation Acquisitions & Improvements Growth & Optimizations
• Backbone: Benefits Assessed
– Single System
– Consistent Processes
– Financial and Consolidated Reporting
– Maintenance Cost
This anticipated aggressive growth led to the evaluation of two key SAP options for the Chalmette and Torrance acquisitions:
1. Integrate the assets on the existing PBF backbone, or
2. Carve out the new assets from the seller’s system and implement/load them on a separate and independent SAP environment
• Carve Out: Factors Considered
– Timeline Aggressiveness
– Speed of Transition
– Change Management Impacts
– PBF’s Decentralized Business Model
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10. Key Points to Take Home
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Field a Separate Team
Engage Right Business
Partner
Maintain The Same Team
Change Management Track
Post Go-Live Metrics
Cross-Functional Interactions
More Testing
More Data Validation
More Cross Functional
Participation
More Business Involvement
Throughout
Continue Doing Apply Lessons Learned Change

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IMPLEMENTATION CHALLENGES

12. • Aggressive acquisitions timelines
• Limited time to confirm system functionality and
validate data pre-CIC
• Slower identification of key issues post CIC
Implementation Challenges
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PBF’s key challenges centered around:
Timing Participationand
• PBF had to train resources to insource business
activities previously done offshore by the seller
• Data validation required much involvement across all
business functions
• Testing drew upon several key business resources
from Finance, Procurement and Maintenance

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IMPLEMENTATION SUCCESSES

14. Implementation Successes
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Despite challenges encountered during acquisition projects, there
are nonetheless key success factors as well:
 The System Works!
• Load product
• Bill customers correctly
• Pay vendors
 Team Make-Up, Chemistry and Experience
• Resource quality and experience are key
• Partners proved to be invaluable in helping PBF accomplish its
strategic objectives
 Applying Lessons Learned
• Open-mindedness about continuously doing better and improving

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KEY LESSONS LEARNED

16. Key Lessons Learned
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Continuous,
Frequent and
Open
Communication
are Key
Each
Acquisition is
Different
Business
Engagement
is Critical
Attend to ALL
Business Sites
Continuously
Apply Lessons
Learned
Be flexible
and Swift to
Potential
Changes in
Course

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Questions
?

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Richard Loew, CIO, PBF Energy
Email: Richard.Loew@pbfenergy.com
Matt Flanagan, Partner, Opportune LLP
Email: mflanagan@opportune.com
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