Mike Jennings: Yeah. So, first, thanks for the compliment on timing. I wouldn’t say we necessarily planned it that way, but it has worked out very well for us and our shareholders. As to taking on the burden and the blessing of being the consolidator, we don’t hold ourselves to that standard. We are opportunistic. We have defined geography and quality of assets that we are looking for. At present, our plate is really full in respect of the Sinclair acquisition and our goal is to really make an excellent combined unit out of that company and the historical Holly. We have got some months ahead of us in terms of realizing all the opportunity that we bought into, and frankly, years ahead of us in integrating more downstream into that branded wholesale network that we aspire to have.
So there’s plenty to do to realize what we have purchased already. As to the future, yes, we believe that because of energy transition, there will be net sellers of assets, focusing principally on the larger oil companies that are redeploying towards a more renewable portfolio. But at present, we don’t take on the strategy of necessarily being a consolidator. We will be more opportunistic.
Neil Mehta: Thanks, Mike.
Mike Jennings: Yeah.
Operator: And our next follow-up question comes from the line of Paul Cheng from Scotiabank. Your line is open.
Paul Cheng: Hey, guys. Thank you. Just a quick follow up. In terms of the Sinclair synergy, you mentioned that you achieved $100 million on rate already. So from this point on, where do you see if there’s any incremental opportunity for that synergy benefit, where that’s — if there’s opportunity that where is the biggest piece it’s going to come from? That’s the first question. And second question, I want to go back into the Lubricant. Tim, you mentioned that $47 million of impact. So that’s about $16 per barrel based on your throughput on the third quarter. So even if I added back that your gross margin, say, call in the 27%, it’s still very low. And also that, I mean, when we talk to other people like Exxon, they actually indicate base oil margin actually has been up and when we look at the market indicator is also up.
So we are trying to reconcile that, why that your — is that something that you need to utilize from an accounting standpoint outside the FIFO we should be aware?
Tim Go: Yeah. Paul, this is Tim. Let me try to hit both of those questions. On the Sinclair synergy side, we still, as Mike mentioned, I believe there’s a lot more opportunity for us to continue to integrate and capture just all the benefits of the synergies. Certainly, with Sinclair, but also as you add Puget Sound into the mix, there’s a lot of opportunity that we think organically that we can focus on. Couple of examples, supply chain and logistics, given our presence in the Rockies area, there continues to be just a lot of opportunities for us to optimize our trucking and our pipeline deliveries, how we are putting product into the various markets between the Woods Cross Refinery, the Casper Refinery and the Rollins Refinery, we think there’s a lot of transportation savings, pipeline tariff savings, truck savings just by managing and optimizing our supply chain and logistics.
From a procurement standpoint, we have captured some procurement savings already, but we think as we continue to leverage our scale and leverage the seven refineries we now have in our portfolio that there’s going to be more procurement opportunities there. From a reliability standpoint, we believe as we continue to knowledge share across our refineries, we are going to continue to lift the bar across our whole portfolio in terms of reliability, performance and utilization. And then, finally, in some of the intermediate products that we make at these refineries, we think there’s some optimization opportunities to again integrate amongst especially the Rocky Mountain refineries as of fuel, oil, asphalt and things like that, that are going to generate more opportunities for us in the future.
Mike Jennings: As far as
