prism refining and marketing industry analysis overview... · baker & o’brien overview ......
TRANSCRIPT
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Baker & O’Brien, Inc. All rights reserved.
PRISMTM
Refining and Marketing
Industry Analysis
PRISM is a trademark of Baker & O’Brien, Inc. All rights reserved.
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Baker & O’Brien Overview
• History
– Founded in 1993
– Independently owned and managed
– Combined technical and commercial expertise
– Over 1,700 assignments completed
• Consulting Staff
– Chemical, mechanical, civil, and electrical engineers
– Most have advanced degrees – MBA, economics, or
finance
– Consultants average over 30 years experience
– Experienced problem solvers
– Supported by highly-trained analytical staff
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Baker & O’Brien Services Profile
Baker & O’Brien’s unique combination of expert and strategic consulting services allows us to provide
the breadth and depth of support that is needed by clients making decisions on complex issues.
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What Is PRISM?
• Refining and Marketing Industry Database
• Refinery Simulator
• Crude Assay Library
• Crude Blending Tool
• Archive for Commercial Intelligence
• Menu-Driven System for Viewing and Reporting
• Open Architecture Using Microsoft® Access and Excel
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Refining and Marketing Industry Database
• Extensive Historical Performance Database – United States
Essentially all U.S. refineries Updated quarterly Historical data back to 1998
– Canada Essentially all Canadian refineries (excluding Fort McMurray) Updated annually Historical data back to 2007
– Europe 90 European refineries representing roughly 86% of European
refining capacity (everything west of Russia - plus Turkey)
Updated annually Historical data back to 2005
– Asia-Pacific 74 refineries including all the Australian, Korean, Singapore, and
West Coast North American refineries. Updated annually Historical data from 2011
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Refining and Marketing Industry Database
• Detailed Analysis of Refinery Operations
– Crude and other feedstock logistics, quantities, qualities,
and costs
– Individual unit capacities, operating, and replacement costs
– Product yields, qualities, and distribution patterns
– Fixed and variable expenses and replacement costs
– Carbon dioxide emissions
• Comprehensive Economic Treatment of Supply Chain
– Crude from load port or initial injection point
– Products to wholesale terminals
– Pipelines and waterborne transportation included
– Delivered product cost to sales terminals
– Can model pipeline capacity constraints
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Refining and Marketing Industry Database (Cont.)
• Consistent Basis for Competitive Analysis
– Try to match actual physical operations but not financial
reports
– No inventory modeling; no FIFO or LIFO effects
– No “hedging” or other trading profits or losses
– No profits or losses due feedstock or product contracts
including exchange agreements
– No preferential or “incentive” shipping rates
• Based on “Public” Information plus Baker & O’Brien
Judgment
– State, national, and international agency sources
– Company reports and presentations
– Country and state reports
– Articles and newsletters
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Refinery Simulator
• Non-linear, Sequential Solution, Deterministic Model
– Case study tool
– Mass balanced
– LP used to optimize product blending
• Individual Process Unit Models
– One of almost every refinery process
– Multiple crude distillation trains, distillate hydrotreaters,
and hydrocrackers
– Over 800 tuning parameters - each with a default value
– Logical “control valves” used to configure flow scheme
– Over 65 product properties (i.e., specific gravity, aniline
point, etc.) used to drive yield correlations
– Utility consumption and replacement costs built-up from
unit models
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Refinery Simulator (Cont.)
• Carbon Dioxide Emissions
– Direct (boilers, heaters, FCC, etc.) based on actual fuel
composition
– Indirect electrical consumption (optional)
– Structure exists for tracking indirect product and feedstock
carbon dioxide
– Can assign a cost to emissions
• Fixed Cost and Replacement Cost Unit Factors
– Rigorous calculation of replacement cost index
– Separate unit factors used to estimate fixed operating
costs
• Location and Inflation Indices for Labor and
Replacement Costs
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Crude Assay Library
• Over 270 Crude Assays Included
• Correlation Coefficients for Property Curves
– Crudes can be “re-cut” instantaneously
– No swing cuts
• Crude Assay Director Used to Regress Correlation
Coefficients
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Crude Blending Tool
• Blend Crudes from Assay Library
• User Specified Finish Blend Properties and Prices
• LP Optimization to Produce Minimum Cost Blend
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Who Uses PRISM?
• Refining Companies
– Long-Range Planning
– Mergers and Acquisitions
– Competitive Analysis (peer comparisons)
– Supply Chain Analysis
• Marketers and Traders
– Crude oil economics
– Downstream integration analysis
– Crude and product supply balances
– Impact of refinery shutdowns
• Financial Institutions
• Technology Licensors
• Petroleum Pipeline Companies
• Hydrogen and Industrial Gas Producers
• Engineering and Construction Firms
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Competitive Benchmarking
Typical PRISM Uses
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Typical PRISM Uses
Refining Industry Margin Curve
Cumulative Barrels of Crude Capacity (Millions of Barrels per Day)
200
7 Q
2-2
008
Q1
Av
era
ge
Ca
sh
Ma
rgin
($
/Bb
l.)
Lowest performing million barrels
of capacity
Today
2012
-
5
10
15
20
25
30
- 2 4 6 8 10 12
Cumulative Barrels of Crude Capacity (Millions of Barrels per Day)
200
7 Q
2-2
008
Q1
Av
era
ge
Ca
sh
Ma
rgin
($
/Bb
l.)
Lowest performing million barrels
of capacity
Today
2012
-
5
10
15
20
25
30
- 2 4 6 8 10 12
200
7 Q
2-2
008
Q1
Av
era
ge
Ca
sh
Ma
rgin
($
/Bb
l.)
Lowest performing million barrels
of capacity
Today
2012
-
5
10
15
20
25
30
- 2 4 6 8 10 12
Lowest performing million barrels
of capacity
Today
2012
-
5
10
15
20
25
30
- 2 4 6 8 10 12
-
5
10
15
20
25
30
- 2 4 6 8 10 12
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-$5.00
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
Refineries
Survivab
ility
W. Canada
E. Canada
USA
Europe
Typical PRISM Uses
At-Risk Refinery Analysis
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Typical PRISM Uses
At-Risk Refinery Analysis
Estimated Clean Products Deliveries to Los Angeles
0
5
10
15
20
25
30
35
40
0 75 150 225 300 375 450 525 600 675 750 825 900 975 1050 1125 1200
Clean Product (MB/D)
De
live
red
Gro
ss M
arg
in t
o L
os
An
ge
les
($
/B)
Cash Opex
Cash Margin
LA
Re
fin
ery
1
La R
efin
ery
12
LA
Re
fin
ery
3
LA
Re
fin
ery
5
LA
Re
fin
ery
2
LA
Re
fin
ery
10
LA
Re
fin
ery
9
LA
Re
fin
ery
7
LA
Re
fin
ery
11
LA
Re
fin
ery
8
LA
Re
fin
ery
6
LA
Re
fin
ery
4
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Typical PRISM Uses
Product Supply Curve Analysis Cost of Proposed Environmental Regulations
Typical PRISM Uses
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
0 500 1000 1500 2000 2500 3000
1000 barrels per day
Ce
nts
per
Gallo
n In
cre
as
e
Demand Curve
(Elasticity = -0.50)
Refinery Supply Curve
Thousand Barrels per Day
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Typical PRISM Uses
Netback Analysis
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Typical PRISM Uses
Marketing Analysis
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Typical PRISM Uses
Commercial Intelligence Analysis
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Typical PRISM Uses
Crude Valuation and Marketing Strategy
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Typical PRISM Uses
Crude Valuation and Marketing Strategy
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User Interface
(Menu System)
Refinery Simulator
(Microsoft Excel)
Crude Assay
Director
(Microsoft Excel)
Data Files
(Microsoft Access)
Open Microsoft Excel Based Simulator
One of “Every” Type of Unit
Non-linear Unit Models
LP Blending of Gasoline and Distillates
Automated Data Transfer to/from Access Database
Data entry system for PRISM assay library
Use Properties from Similar Crudes to Supplement Available Data
Curve-fit Property Data and Generate Coefficients
PRISM Architecture
The PRISM system facilitates use through the user interface or directly
with the simulator and crude assay tools (MS Excel).
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Contact Information
Dallas
Headquarters
12001 N. Central Exprwy
Suite 1200
Dallas, TX 75243
Phone: 1-214-368-7626
Fax: 1-214-368-0190
Houston
Office
1333 West Loop South
Suite 1350
Houston, TX 77027
Phone: 1-832-358-1453
Fax: 1-832-358-1498
London
146 Fleet Street, Suite 2
London EC4A 2BU
Phone: 44-20-7373-0925
www.bakerobrien.com