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About
This course is designed to give a baseline understanding of refining economics both from the standpoint of how industry fundamentals set prices and margins (the external environment) and how refineries plan their operations to maximize their earnings (the internal environment).
The course seeks to simplify technical aspects and can be followed by participants who are not refinery specialists. Since a basic understanding of refinery operations remains advantageous, pre-read material is sent to bridge the gap.
The course takes on many topics that require the application of economic concepts. This includes an explanation of refining margins for refineries of diƯerent complexity, the main aspects of planning and optimization, blending of products and how to set the prices of intermediate streams based on blending economics.
Commercial aspects covered by the course include an explanation of key aspects of the market for crude oil and for refined products. Crude oil supply agreements and refined product sales agreements are explained with specific emphasis on how prices are set in those contracts and an explanation of how market fundamentals shape crude oil price differentials. Global trade flows, inter-regional prices and arbitrage are also explained in this context. This part of the programme is wrapped up with a basic explanation of hedging.
A third and final part of the course explains all the most important factors of competitive advantage in refining. Finally, the course provides an overview of future challenges of strategic importance.
The delivery makes continual links between the external and the internal environment, explaining how the optimization choices that are made by refineries influence market prices and how refineries in turn react to changing price relationships.
The course includes practical exercises to be done in small groups.
The course seeks to simplify technical aspects and can be followed by participants who are not refinery specialists. Since a basic understanding of refinery operations remains advantageous, pre-read material is sent to bridge the gap.
The course takes on many topics that require the application of economic concepts. This includes an explanation of refining margins for refineries of diƯerent complexity, the main aspects of planning and optimization, blending of products and how to set the prices of intermediate streams based on blending economics.
Commercial aspects covered by the course include an explanation of key aspects of the market for crude oil and for refined products. Crude oil supply agreements and refined product sales agreements are explained with specific emphasis on how prices are set in those contracts and an explanation of how market fundamentals shape crude oil price differentials. Global trade flows, inter-regional prices and arbitrage are also explained in this context. This part of the programme is wrapped up with a basic explanation of hedging.
A third and final part of the course explains all the most important factors of competitive advantage in refining. Finally, the course provides an overview of future challenges of strategic importance.
The delivery makes continual links between the external and the internal environment, explaining how the optimization choices that are made by refineries influence market prices and how refineries in turn react to changing price relationships.
The course includes practical exercises to be done in small groups.
What will you Learn?
- Understand which aspects of refining have the highest relevance for margins and for competitive positioning
- Understand the margins of refineries of different complexity
- Understand key aspects of refinery optimization
- Learn about blending, blending values and product give away analysis
- Learn how crude and product prices are set in contracts
- Learn price and margin hedging at a basic level
- Develop an understanding of how the fundamentals of refining determine many price relationships, e.g. the price differentials between crude oils and refinedproducts of different quality
The material makes large use of historical market data to explain the prices and margin cycles of the last 25 years. The history of the industry is used to make many examples in support of the explanation of several concepts. The history of the industry is used also as a way to give participants a framework to predict what may happen in the future, given the societal pressures to reduce carbon emissions. As a final exercise, participants are asked to make their own forecasts.
Agenda
Types of refinery configurations based on complexity
- The hydroskimming refinery
- Cracking units most commonly found at refineries with focus on aspects that matter for their margins
- Hydroskimming yields and yields of complex refineries
- Key product price relationships and historical trends
- Refining margins for refineries of different complexity
- The concept of incremental cracking margin
- Recent margin trends, explanation of current fundamentals shaping margins and explanation of past margin cycles
- Prices in weight vs prices in volume
- Refinery operating costs
- The importance of volumetric expansion
Overview of short-term planning and optimization work processes
What is an LP model and what it does?
Main aspects of refinery optimization
– The concept of marginal capacity and optimum refinery throughput
– Blending and blending optimization
– Swing cuts and optimal routing of streams
Retrospective performance analysis and quality give away analysis
The crude oil market and crude slate optimization
Global crude oil trade patterns
What is an LP model and what it does?
Main aspects of refinery optimization
– The concept of marginal capacity and optimum refinery throughput
– Blending and blending optimization
– Swing cuts and optimal routing of streams
Retrospective performance analysis and quality give away analysis
The crude oil market and crude slate optimization
- The refining value of crudes and how it determines price differentials in the marketplace
- Term crude vs spot crude and how prices are set in crude oil purchase agreements
- Tanker costs and how to calculate the delivered cost of crude
- Optimal crude oil selection
Global crude oil trade patterns
Sarroch Refinery is one of the biggest in Europe (largest single-site in the Mediterranean) and one of the most advanced in terms of plant complexity. The refinery has a large crude oil processing flexibility and has processed crude oils from more than 30 countries worldwide, ranging from very light to very heavy. Its location makes it to be at the hearth of the Mediterranean market.
During the visit the participants will:
– Have a general tour of the site
– Learn about Sarroch refinery configuration
– Get information about main aspects of its logistics
– Talk about a planning process
During the visit the participants will:
– Have a general tour of the site
– Learn about Sarroch refinery configuration
– Get information about main aspects of its logistics
– Talk about a planning process
The market for refined products
– Main market locations and benchmark prices
– Main aspects of refined product supply agreements
– Setting product prices in contracts
– Pricing products at non-market locations: import parity, export parity, netbacks
– Product distribution and pricing products along supply chains
Pricing gasoline components and residues based on blending values
Global refined products trade patters and arbitrage
Hedging exposure to price volatility and refining margins
– Main market locations and benchmark prices
– Main aspects of refined product supply agreements
– Setting product prices in contracts
– Pricing products at non-market locations: import parity, export parity, netbacks
– Product distribution and pricing products along supply chains
Pricing gasoline components and residues based on blending values
Global refined products trade patters and arbitrage
Hedging exposure to price volatility and refining margins
Benchmarking operating performance and competitiveness with the Solomon survey
Summary and relative importance of the main factors of refinery competitiveness
– Configuration
– Location & Logistics
– Scale and operating costs
– Energy efficiency
The Nelson Complexity Index
The business environment for refining:
Summary and relative importance of the main factors of refinery competitiveness
– Configuration
– Location & Logistics
– Scale and operating costs
– Energy efficiency
The Nelson Complexity Index
The business environment for refining:
- Short term outlook: likely or possible developments of key aspects of the current business environment discussed in the course
- Trends of highest strategic importance in the long term and possible scenarios
- Making your own forecast
Participants
Production Planning & Optimization Specialists
Refinery Engineers (Process / Technical roles)
Trading & Commercial Professionals (crude oil & oil products)
Strategy & Market Analysis Professionals
Refinery & Operations Managers
Finance Professionals in Oil & Gas
Practical Information
The Refining Economics course fee: £3995
Please note: UK-based companies are subject to 20% UK VAT
Please note: UK-based companies are subject to 20% UK VAT
- Participation in the course
- Technical visit to the Sarroch Refinery
- Lunches and coƯee breaks during the programme
- The course materials in hard copy and E-version
- Industry certificate of International Business House
Payment options are available in two forms: bank transfer and card payment.
Sardegna Hotel - Suites & Restaurant, Via Lunigiana, 50 - 09122 Cagliari, Italy
Testimonials
The whole course was a great experience
“The whole course was a great experience. Roberto is a great teacher, highly experienced and able to explain difficult topics. The visit in Sarroch refinery had high added value, as we could discuss about the configuration of this refinery and maybe compare it with the refinery we work. On the other hand, Elena was very kind and organised this event perfectly”
LP analyst
Chemical Engineer, Hellenic Petroleum
It was a rich experience
“It was a rich experience both from a theoretical and relational point of view. To this is also added the practice with English, as the course was carried out entirely in technical English. Roberto was always available for any clarifications in Italian if we needed them. The topics covered were all interesting and relevant to my work.”
Specialist
Production & Energy Performance Analysis, Saras
Certificate
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If you are unable to attend a course, you are welcome to provide a delegate substitution, up to 24 hours prior to the course at no extra charge.
If you wish to transfer to a different course a 10% admin charge will be made if the transfer occurs between 10-29 days before the course.
If you fail to attend the course on which you are booked and have not given prior notice to International Business House then the course fee will remain payable in full.
This cancellation policy is necessary owing to the strict limitation on attendance numbers. IBH reserves the right to amend or cancel any course, course times, dates or published prices. Changes to course prices, times and dates will be advised 30 days before the course
IBH reserves the right to amend or cancel any course, course times, dates or published prices. Changes to course prices, times and dates will be advised before the course start date and any course already paid in full will not be subject to the increased price.
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Roberto
Roberto is an energy professional with over 30 years of experience in the oil industry. His career journey began at Eni’s Livorno Refinery, followed by roles at MW Kellogg, where he oversaw plant commissioning in Nigeria. Roberto’s consulting career took off at Purvin&Gertz, where he rose to partner status, focusing on downstream oil economics.
Later, at IHS and KBC, Roberto led strategic consulting practices, specialising in project feasibility studies and market forecasts. At Saudi Aramco, he played a key role in developing major downstream investment plans and conducting commercial and technical due diligence for acquisitions.
Throughout his career, Roberto has developed deep knowledge of refining economics and a broad-based experience, progressively expanding his expertise into petrochemicals. Roberto offers his expertise in refinery economics, market forecasting, and project valuation to organisations worldwide.
Later, at IHS and KBC, Roberto led strategic consulting practices, specialising in project feasibility studies and market forecasts. At Saudi Aramco, he played a key role in developing major downstream investment plans and conducting commercial and technical due diligence for acquisitions.
Throughout his career, Roberto has developed deep knowledge of refining economics and a broad-based experience, progressively expanding his expertise into petrochemicals. Roberto offers his expertise in refinery economics, market forecasting, and project valuation to organisations worldwide.
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