Cost Effectiveness in Refineries

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Elements of Petroleum Refining
Refinery (Processing)
Crude Oil (Upstream)
Product (Downstream)
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Refining Margins
Severe margin pressures due to adverse structural
factors- Near stagnant product Demand/ Capital
Intensive Environmental Regulations and
Increased Conversion Capacity
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Refinery Capacities Throughputs
Million barrels daily
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Cash Margin
Refinery Margin (US/EDC) Product Value -Raw
Material Cost - Operating Cost
Cash Margin
Operating Cost (Utilities, Maintenance,
and Personnel Costs)
Product Value (S Price Amount)
Raw Material Cost (S Price Amount)
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Refinery Margin trend in Asia
Japanese Refineries
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0
-1
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1
2
US/BBL
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The Need for Continuous Improvement

• Margins
• Fluctuation
• Falling
• Uncertainty

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Refinery Margin
Business Strategy Policies
Risk Management
Crude Selection Sourcing
Margin
Market Responsive Customer Requirement
Process Structure
Production Costs
Blending Economics
Optimisation Strategies
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Crude Management
Basket Quality Net-backing Logistics Political
Scenario OPEC Market Intelligence Refining
Capacity
Refinery (Processing)
Crude Oil (Upstream)
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Refinery Margin
Business Strategy Policies
Risk Management
Crude Selection Sourcing
Margin
Market Responsive Customer Requirement
Process Structure
Production Costs
Blending Economics
Optimisation Strategies
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Refining Margin Improvement
- Dynamic Production Planning Scheduling -
Scale Improvement - Continuous Technology
Upgrade - Recent Developments - Low / No cost
Solutions - Long Term / Investment Solutions
Increased depth of refining
Secondary Processing/ Integration with
Petrochemical Power improved margins
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Refinery Margin
Business Strategy Policies
Risk Management
Crude Selection Sourcing
Margin
Market Responsive Customer Requirement
Process Structure
Production Cost
Blending Economics
Optimisation Strategies
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Elements in Crude Refining
On stream factor Capacity Utilisation Fuel
Loss Maintenance Practices Operating
Practices Organisation Culture E- Knowledge
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Maintenance Practices
Concepts Shift from conventional approach of
Time Based Condition Based Maintenance.
Reliability Centred Maintenance (RCM) -
Reliability of equipment/part is the basis of the
concept. - Does not consider likelihood of
failure consequence of failure. Risk Based
Maintenance (RBM) - Includes RCM, likelihood of
failure consequence of failure - Reduction in
cost by more than 10(6/7 cents
/bbl) Maintenance Management System
(MMS) Design Consideration -Selection of
Metallurgy say Titanium vis-à-vis
Cu-Ni -Selection of Technology say Fieldbus
vis-à-vis conventional
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