Downstream Training. Downstream Overview - Introduction. Historical Perspective: The Seven Sisters. “During research on Shell in the early 60’s, I came in contact with the Italian oilman, Enrico Mattei, who popularized the phrase - The Seven Sisters...”.
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Downstream Overview - Introduction
“During research on Shell in the early 60’s, I came in contact with the Italian oilman, Enrico Mattei, who popularized the phrase - The Seven Sisters...”
In this course, participants will:
For this course…
Crude Acquisition and Transportation
Terminals & Wholesalers
Downstream materials focus on crude, products and key participants...
Some downstream business drivers are obvious, some are not...
in some ways, absolute crude price is irrelevant
It impacts supply and price
Which Refinery Process?
What Supply - Distribution Options?
What About Price/Risk?
How to Market?
Key economic decisions to be addressed in downstream...
Crude cost is the most important factor in the price of a gallon of gas...
FY2003 USA Cost Components of Gasoline
Distribution & marketing
USA more & more dependent on foreign sources…
31.6 33.331.537.939.642.546.247.046.646.349.950.748.851.854.556.655.6 58.260.458.3 61.262.9
Imports as % of U.S. Products Supplied
Source: NPN Market Facts 2005
In 2003, the USA received numerous global crudes for USA refineries…
0.5 Million b/cd
45% Canadian crudes balance local USA
3.2 Million b/cd
47% foreign via P/L: Canada, Saudi Arabia, Nigeria, UK, Columbia,Venezuela
2.6 Million b/cd
37% Alaska, California. 33% foreign: Saudi Arabia, Ecuador, Iraq, Canada,Argentina, Mexico
1.6 Million b/cd
98% foreign via ship: Nigeria, Angola, Saudi Arabia, Canada, UK, Gabon
The USA Gulf Coast (PADD III) is the world’s largest refining center
7.3 Million b/cd
Major JV’s: 72% foreign via ship: Mexico, Saudi Arabia, Venezuela, Nigeria, Iraq, UK
Source: Energy Information Administration – Petroleum Supply Annual 2003
Oil & Gas Journal 01/05/05
Thanks to National Oceanic & Atmospheric Administration (NOAA)...
We will now address each of the major downstream sectors...
Industry & Downstream Overview
Transportation & Distribution
Supply, Trading & Risk Management
References to assist in your future work...