Refinery Operational Economics Planning & Profitability
OVERVIEW
Description
An understanding of the oil industry in general, and petroleum refinery economics in particular are more essential than it has ever been. The course is designed to explain and teach the fundamentals of refining economics to specialists and non-specialists (engineers, technicians of the industry) and/or those new to this industry. An economics or technical background are not necessary for fully benefiting from this course and understand course subjects and materials.
The course will be essential and useful to financing and/or marketing people and all who have some involvement with refining or petroleum products. Similarly, a marketing background is not critical, and the course will be helpful to refinery engineers who would like to understand how world petroleum markets have an impact on their refineries and operations.
This program is designed to de-mystify the important aspects of economics – markets, supply and demand – and finance and financial control of refinery operations and projects, specifically in relation to oil and gas industry and enable managers to understand how they can make more informed decisions. Understanding the principles of economics and finance will allow participants to see the money implications of the decisions they make. Financial principles are used to carry out strategic decisions about product and project planning, budgeting and forecasting. It’s also used to build business cases, which are ultimately used to justify investments in new products, enhancements, and marketing initiatives. Finally, virtually all personnel in a company/refinery, need to use financial measures to assess how well the product plans, marketing plans, or business cases are performing through ongoing analysis of results. This program is designed to introduce you to the concepts, tools, and methods of economic and financial analysis you need to understand and master in order for you to be more effective in carrying out your job.
Objective
Do you have financial/budgetary responsibilities for an oil/gas and refinery projects and operations and don’t understand how to analyze the various financial documents? Do you try to convince your superiors the financial merits or implications of your project/proposal/decision? Are the acronyms of ROI, IRR, NPV, and TCO unfamiliar and their formulas a puzzle that you want to understand? This course will help you solve the financial mysteries and master your role in analyzing, establishing, and monitoring your refining operations. No matter how important a project or decision might be to your team or department, the bottom line is what matters. In this course, you will learn how to effectively communicate with financial professionals. You will also learn to understand how executives make decisions, select projects, analyze business performance through budgets, and interpret financial results.
This program will lead delegates through the complete economic and financial life cycle of a refining project & operations, from inception to project close. Each stage will provide participants with the understanding, skills and techniques for the successful management of their refining projects and operations.
- Prepare and present the business case & financial plans for a refinery project
- Understand how refineries’ profit depends on location and configuration
- Evaluate the economic strength of refinery installations.
- Improve your understanding of the value of refinery investments
- Learn how to interpret published information on the refining industry
- Discover how to improve the profitability of a refinery
Who should Attend
Personnel who are involved in managing operations and projects and/or teams and departments, technical professionals involved in research and development, product design, engineering, and other scientific and technical work who are from private and public sector oil & gas companies, including: Ramped, HR, engineering and manufacturing, project managers, product development specialists, and other members of technical, commercial and service operations.
COURSE OUTLINE
Financial Management for the petroleum industry
- Financial management objectives
- Inter-relationships of oil prices, interest rates, capital investments, and debt
- Managing risks in the petroleum industry
- Introduction to valuation: the time value of money
- Discounted cash flow valuation
Global oil market outlook
- Energy supply and demand
- Crude oil prices
- Investment and trade flows
Refined products supply and demand
- Refined products applications
- Pricing sensitivity of consumption
- Breakout by sector and regions
- Historic supply and trade requirements
- How supply and demand affect pricing
Light/heavy differential
- Definitions of light/heavy products
- How different products track each other
- Implications for refineries and investments
Refined products trade and transport
- Import and export markets
- Petroleum shipping: ships size, type, and shipping costs
- Effects on refinery profitability