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…
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 – Downstream
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 33.3 31.5 37.9 39.6 42.5 46.2 47.0 46.6 46.3 49.9 50.7 48.8 51.8 54.5 56.6 55.6 58.2 60.4 58.3 61.262.9
Imports as % of U.S. Products Supplied
Source: NPN Market Facts 2005
LA.Importance of Global Perspective
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...