Fundamentals of Oil Gas Indus | Cracking (Chemistry) | Oil Refinery

Fundamentals of Oil Industry

& Gas

By Hemant Kumar Domain Consultant Energy Practice

By the end of this presentation you’ll learn
• • • • • • • • The importance of energy in our lives Overview of oil and gas supply chain What are hydrocarbons Where do crude oil and natural gas come from How are they produced How are petrol, diesel etc are produced How are they delivered to us Who are various players in the industry

Chapter- 1 Introduction to Energy

You check your mails on your PC and find that you’ve won a quiz contest Picture This You read about the increase in crude oil prices in the newspaper You wash your most favourite T-shirt in washing machine You store the delicious dish you cooked last night in your fridge You spend quality time with your family watching a movie “dog’s life” .

Your house is sufficiently heated to protect you from cold weather. And light bulbs/tubes keep your house glowing at night .

And all that needs electricity to keep your day to day life running smoothly. The electricity comes from the power plant which runs on natural gas or coal .

And Picture This Also World is not so small and we require the means to move from one place to another. Fortunately we have various ways to do that Train for long distances Public Transport for daily commutation Our personal vehicles for outings Planes for faster long distance travel And we need roads for our vehicles to run on .

Unless of course you want to use a bicycle To build roads we need TAR which is also called COAL TAR…… .…….And we need fuel for all these modes of transport.

preparing food is no more inconvenient Plastic bags are widely used to carry the vegetables and other food items Vegetables we love to eat also need fertilizer We need fertilizer to grow the food crops .And can we live without food? Thanks to cooking gas.

recreation. needs lot of energy. travelling. The all-important energy comes from various sources like Crude oil & Natural Gas Wind Water Coal Sun .To cut a long story short. The way. for preparing foods.. comfort and safety. we live.

wind. crude oil and natural gas are all considered fossil fuels because they formed from the buried remains of plants and animals that lived millions of years ago Nuclear Fuel Coal . solar. gases and solids. and biomass. Non-renewable sources of energy can be divided into two types: fossil fuels and nuclear fuel Coal.Types of energy Renewable Renewable Energy is energy derived from resources that are regenerative (can be replenished in a short period of time) or for all practical purposes cannot be depleted Renewable energy accounts for about 14% of the world's energy consumption The five renewable sources used most often include hydropower (water). Crude oil & Natural Gas Biomas s Wind Geothermal Sun Water Non Renewable Nonrenewable energy sources come out of the ground as liquids. geothermal.

contribute almost 50% of the total world energy requirement. In the next chapters we’ll try to know more about hydrocarbons which are very important source of energy and critical to our economic growth and survival. we should know that they are found. produced and delivered to us by oil and gas companies who engage in multiple activities which will be described in this presentation So let’s get ready to learn about oil and gas industry. When we talk about hydrocarbons. we also need to know where it comes from.Welcome to Oil and Gas industry • Now that we have understood the importance of energy in its various forms. which are nonrenewable energy resources. • • • Finding & producing hydrocarbons Transporting hydrocarbons Refining hydrocarbons Selling the petroleum by products . Hydrocarbons (oil and gas).

Petroleum Value Chain Picture below gives an overview of the supply chain of the oil and gas Platform Producers Upstream Midstream Downstream Retail . though is not a very popular term is used to describe the transport part. Industry is organized into three broad categories based on the activities performed therein. They are mainly a) Upstream (Finding & producing hydrocarbons) b) Downstream (Refining hydrocarbons and producing saleable petroleum byproducts) c) Retail (Selling the byproducts to all the users who need them). Truck Refineries Wellhead Producers Terminal/Storage/H ub Location Bulk Terminal Storage Gas Stations Platform Producers Platform Producers Source:http://www.Midstream.adventuresinenergy.

Chapter.2 Origin of Oil & Gas .

• Chemicals based on carbon and hydrogen are called as hydrocarbons • The Simplest Hydrocarbon is methane (CH4) is made up of one carbon.What Hydrocarbons are • Hydrocarbons are naturally occurring chemicals that are made up of just two elements – carbon and hydrogen. four hydrogen atoms • From now we’ll use terms hydrocarbons and oil & gas interchangeably (which is perfectly alright) .

eia. subject the organic matter to higher temperatures and pressures. Continued burial.. i. Heat and pressure from these layers helped the remains turn into what we today call crude oil .e. Over the As soon as the oxygen is used up." Nowadays the terms petroleum is used as a common denotation for crude oil and natural gas. silt and mud. the hydrocarbons. The word "petroleum" means "rock oil" or "oil from the earth. decay stops and the remaining organic matter is preserved.html#How%20used . the remains were covered by layers of sand. which cause physical and chemical changes in the organic. Hydrocarbon Formation Once the body of prehistoric animals and plants became trapped they partially decomposed using up the dissolved oxygen in the sediment.Origin of Oil and Gas Oil was formed from the remains of animals and plants that lived millions of years ago in a marine (water) environment even before the dinosaurs. These produce tiny droplets of hydrocarbons Source.http://www.doe.

Origin of Oil and Gas Facts • Oil & gas do not occur in an underground pool but lies in the pore pace of the rocks which are also called the source rocks • The oil & gas are forced through the rock on account of three reasons •Expansion of the oil itself •Expansion of gas from above •Pressure of the encroaching water from below. What a petroleum bearing rock looks like • Oil can be found with in the depth of ranging between 2km – 9km .

Try mixing them together and resulting mixture would resemble a reservoir. A word of Caution: Don’t try it at home ☺ If it’s very difficult to do. take a bucket. As shown in the picture below. don’t worry. However a source rock as we call it will be no good on its own as oil & gas therein will leave the source rock and migrate to other areas. in its pores.Origin of Oil and Gas-Do it yourself You can visualize what a rock containing crude oil & natural gas would look like. You can imagine a sponge soaked with water or petrol. a can of petrol and gas. Sounds simple!! Isn’t it? Except that a petroleum reservoir is more complicated in its nature and very difficult to find out. Does it make life difficult for those looking for large deposits of oil and gas? Not exactly! . A rock will contain the hydrocarbon the same way.

Origin of Oil and Gas. Petroleum SystemIs a oil & gas bearing structure containing source. An oil & gas field consists of one or many such petroleum systems Petroleum System Source Rock Pore is a small open space between the rock particles Permeability is provided by the channels connecting different pores . oil and gas originate in source rock and once fully formed they start moving towards the surface through channels in the rocks surrounding the source rocks.Petroleum System As we learnt. reservoir and cap rocks. Once their upwards movement is impeded by non permeable rocks also called trap or seal or cap rocks they tend to accumulate in the porous (containing pores) and permeable rocks also known as reservoir rocks.

Chapter.3 Oil & Gas Exploration & Production .

Exploration.Finding Oil & Gas Oil & gas fields are identified using seismic data which is obtained from Seismic Surveys Seismic Data Acquisition Seismic Survey Seismic Data obtained from Seismic Survey Computer generated model of underground rocks and trapped oil&gas reserves Seismic Data processed at the Workstation .

as opposed to other floating rigs.Finding Oil & Gas To confirm the interpretations of the seismic data. Used in shallow depth Jack up Rig Semisubmersible Rig Drill Ship Semi-submersible Rig. A drill ship must stay relatively stationary on location in the water for extended periods of time. Drilling is done using drilling rigs each adapted to different water depths (more than 2000 m in some cases) Jack up Rig. This allows the working platform to rest above the surface of the water. This positioning may be accomplished with multiple fitted with long support legs (3 0r 4) which are lowered until they rest on the sea a ship designed to carry out the drilling operations in deep water. .floats and retains its stabilized position by means of anchors fixed on the seabed. Used in deep waters Sea Bed Water Level Drill Ship. dynamic propulsion (thrusters) or a combination of these. drilling is done which is also called as exploratory drilling.

is attached to the drill string. As the hole gets deeper. more lengths of pipe can be added at the top.Exploration. Rotary drilling operates on the principle of boring a hole by continuous turning of a bit. Drill Bit . actual drilling may begin.Exploratory Drilling Once an area has been selected and the right to drill thereon has been obtained. The most common method of drilling in use today is rotary drilling. A drill string is composed of hollow lengths of pipe leading to the surface. The bit. which is the most important part and also is hollow and very heavy.

On an average the strike rate varies between 5% to 15%.e. extraction can start. quantity of oil and gas do not justify the investment in development. Oil ••Drilling aawell is aavery costly activities especially in deep water. For example 10% strike rate the strike rate varies between 5% to 15%. studies and the eventual construction of the conditions.Oil & Gas Production Exploration Exploration •Oil companies have to drill many exploratory wells before discovering •Oil companies have to drill many exploratory wells before discovering aa potential oil filed which is also called as prospect. Once everything installations constitute the development stage of the field. decision is taken whether to develop the field for commercial extraction or stop further activities in case the producible for commercial extraction or stop further activities in case the producible quantity of oil and gas do not justify the investment in development. studies and the eventual construction of the installations constitute the development stage of the field. The success rate also known as strike rate depends on the geological history of the particular known as strike rate depends on the geological history of the particular region where exploratory activities are being performed. means the 99of them would be dry holes. For example aa10% strike rate would mean one prospect among 10 exploratory wells drilled. •Enormous thought goes into the best way of extracting the hydrocarbons.e. Once everything is in place. On an average region where exploratory activities are being performed. The life of an oil field continues for many years years Production Production . attempting to recover the maximum quantities of oil and gas in the safest attempting to recover the maximum quantities of oil and gas in the safest conditions. It also would mean one prospect among 10 exploratory wells drilled. extraction can start. Drilling well is very costly activities especially in deep water. decision is taken whether to develop the field •Following appraisal drilling. These forecasts. The success rate also potential oil filed which is also called as prospect. Oil companies are using the modern technologies to increase the strike rate companies are using the modern technologies to increase the strike rate during exploration during exploration •Hydrocarbons discovered by the initial exploration wells are further •Hydrocarbons discovered by the initial exploration wells are further confirmed by appraisal drilling i. drilling more wells in the area •Following appraisal drilling. It also means the of them would be dry holes. drilling more wells in the area confirmed by appraisal drilling i. The life of an oil field continues for many is in place. These forecasts. •Enormous thought goes into the best way of extracting the hydrocarbons.

However drilling horizontal involves a lot of technical complexity and is also more costly Reservoir Small Drainage Area for Vertical Well Large Drainage Area for Horizontal Well . Question is. the technique enables a significant reduction in the number of wells necessary for a given development. Thus. •. This requires the use of a large number of wells. The horizontal well has a much greater length of contact with the reservoir.Oil & Gas Production Production consists of bringing the hydrocarbons contained in the subsurface to the surface. how many wells are required? Imagine A field spreads over a vast area. A large number of vertical wells would therefore be necessary to completely extract the contents of a reservoir. such wells only cross the reservoir over the limited height of a vertical or near vertical cross section. at least several km² and sometimes more than 100 km² A traditional well (vertical or slightly deviated) only draws oil or gas from a radius of a few tens of meters. Moreover.

To ensure safe production from the high pressure fields.Development It’s not enough to drill wells in a field to ensure production. safety equipments and other installations are set up. The picture below shows an offshore oil platform which takes production from 10-12 wells housed within the platform Oil Wells .Oil & Gas Production.

Chapter.4 Oil & Gas Transportation .

sulfur. refineries & gas processing units via pipelines or tankers (more about these later) . hydrogen sulphide removed.Transportation The crude oil & gas transportation begins from the wells where production from different wells is taken to a large processing platforms via small diameter (2-8 inches) pipes. At process platform oil. gas and water are separated and impurities like condensate. After processing crude oil and gas are sent to the their respective destinations.

Sea Bed . FPSO’s find their application in sub sea wells in remote and deep water fields. In a sub sea well wells are located on the seabed as opposed to the conventional wells at the surface Oil Tanker The FPSO is usually a decommissioned oil tanker which has been stripped down and equipped with facilities to process and stabilize the crude oil and enable it to be connected to another oil tanker or transport tanker. at which point the transport tanker connects to the stern to the stern or bow of the FPSO and offloads the oil. Oil is processed and accumulated in the FPSO until there is sufficient to fill a transport tanker.Transportation FPSO ( Floating Production Storage Offloading) are used where it’s not possible or economically justifiable to install sea bed pipelines or expensive process platforms.

the need to be sent to the refineries/processing units for further processing.Transportation Once the crude oil and natural gas are separated. accessibility. Sometimes many modes of transports are utilized to achieve this goal. distance. However in majority of the cases Maritime (large oil tankers) and Pipelines are the most preferred means of transport. Let’s learn a little more about them . time and availability. volume. Since most of crude oil & gas are found in remote places like deserts. Railways & Trucks. sea or hills. Broadly there are four modes of oil & gas transportation Pipeline. transportation of crude oil to its destination (refineries) is sometimes very complicated. Maritime. Maritime Pipelines Truck Railways Many factors determine the choice of one mode of transport over another like cost.

It’s also the most photographed pipeline as it. that connect regional markets . most efficient and economical way of transportation.S. The oil travels in the pipelines at speeds of around 2m/sec (7km/h). 800 mile long. has significant portions of the system above ground.24 inches in diameter) in the U. Due to the very nature pipelines are considered to be the safest. The network of crude oil pipelines in the U. Pipelines are owned by the oil companies or third party operators who lease the pipelines to the oil companies. Carrying capacity of a pipeline is expressed in terms of thousands barrel per day Pipeline shown in the picture is Trans Alaska Pipeline System (TAPS). pipelines permit the movement of crude oil to these areas with little or no disruption to communities everywhere. unlike most pipelines. it’s one of the of the largest pipeline systems in the world.S. There are approximately 55. The United States has the largest network of energy pipelines – both oil and natural gas -.of any nation in the world. is extensive.Oil Transportation-Pipelines Pipelines are large diameter tubes that can transport enormous quantities of oil. Since oil is produced in areas far away from major marketplaces where population and manufacturing centers are located.000 miles of crude oil trunk lines (usually 8 . up to several tens of millions of tons per year. The oil circulates by means of pressure maintained by pumping stations located every 60 to 100 km.

000 to 80.000 to 200.200.Mid size vessels used for short to medium hauls(carrying capacity. Within the industry. The six categories of vessels are: ULCCs and VLCCs (Ultra and very large crude oil container) – Largest vessels used for long hauls(carrying capacity. In order to benefit from economies of scale companies typically charter the largest possible vessel that can be accommodated in their arrival and discharge ports. based on their carrying capacity. Panamax and Handysize.80.Small size vessels used for short hauls (carrying capacity. independent owners account for approximately 80.000 dwt and greater) Suezmax and Aframax.Oil Transportation-Maritime Maritime transport involves transporting crude oil through large oil tankers. and the top ten owners account for 26.10.000 dwt).4% of the tanker capacity. These two are most commonly used.4% of the world tanker fleet .000 dwt) • • • The seaborne crude oil transportation business is highly fragmented and is generally provided by two types of operators: independent ship owners and captive fleets of privately and state owned oil companies. The oil tanker fleet in divided into six major categories.

there is no question of chartering vessels to transport gas in its gaseous state. liquefied natural gas) is used with the aid of compression plants positioned at regular intervals along the network. These gas pipelines are not visible: for reasons of safety and security they are buried underground. Overland or underwater transport by gas pipeline is preferred. a method of maritime transport based on the liquefaction of the gas (LNG. Therefore.html . production and consumption points are far apart and gas has to be taken from one to the other. the problems of transport and of storage of gas are the same as for oil. for the same quantity of energy. This means that.http://www. That would cost … 600 times too much! The most usual method of transportation is therefore by gas pipelines. But in detail. the gas is in a gaseous state at normal pressures and temperatures. The compressed gas circulates at high speed in a gas pipeline. it occupies a volume 600 times greater than that of oil. things are quite different.Gas Transportation Overall. In certain cases where the construction of gas pipelines is technically impossible or too expensive. Unlike oil.planete-energies.

the developed countries have realized for a long time now the strategic importance of oil. Depending on the country. These commitments have been incumbent on members of the European Union since 1968. the cargo of crude oil is discharged through pipelines to storage tanks in the refinery Storage tanks come in varying size (more than 500.Crude Oil Storage • • • At the marine terminal. the strategic stocks are managed by state or private organizations (or both) • Storage tanks at a marine terminal Storage tank .000 litres) and can often be buried underground due to safety and security reasons In addition. They are committed to holding stocks of petroleum products (crude and finished products) equivalent to 3 months of import quantities.

in LNG form in large tanks & underground reservoirs.http://www.Gas Storage • Due to reasons such as seasonal fluctuation or supply-demand change. and there is no need to refrigerate the gas to liquefy it as in LNG. Only drawback is that such ideal sites are not numerous and in most of the cases liquefaction of gas to convert it into LNG is the only option Ariel view of a LNG plant • Source. so that injection of the gas is not too expensive in energy terms. storage of gas is . Underground reservoirs offer enormous storage capacities to the extent of billions of m³.planete-energies. There are two ways to store the natural gas. All one need is a suitable geological site which must must possess good reservoir and cap rock conditions and be located at a sufficiently shallow depth (around 500m).


At sea. security and respect for the environment. Storage facilities ensuring total safety and security must therefore be planned for petroleum products. not only accidental oil spills but also the deliberate discharging of polluting products such as the residue from tank and bilge cleaning.000 boats. . everything must be done to avoid pollution.200 miles of rocky beach. the main issues are those of safety. 10.S. On land the state of oil pipelines must be continually kept under surveillance and worn equipment replaced. 1. vessel occurred when the Exxon Valdez oil tanker emptied 11 million gallons of crude oil into Prince William Sound off the coast of Alaska in 1989. • Oil Spill Pipeline Leak The largest oil spill involving a U.2 billion to clean up the spill.Transportation & Storage-Safety Aspects • Whether oil is transported from production sites to the refineries by maritime or pipeline methods.000 workers. It took company four summers. Most dangerous are oil spills which pose enormous threat to the environment Same precautions go for storage also as enormous quantities of oil transported are not used immediately. 100 airplanes & $1. killing hundreds of thousands of birds and marine animals and soiling more than 1.

Chapter.5 Oil Refining .

Let’s learn more about the refining and refineries… . sulphuric or acid products which are very corrosive for metals That is why the crude oils must be purified and transformed into products having an almost constant composition.Refining Crude Oil Why do we need to refine the crude oil? Why can’t we build engines that run on crude oil? We need to refine the crude oil because • Crude oil is an unstable mixture of several hydrocarbons in varying quantities according to the density of the products • There is not one type of crude oil but a multitude of different crudes • Different crudes contain dissolved gases. These transformations are carried out in refineries. well adapted to their use.

Fuel oil. Kerosene. Lubricating oil. Just as a paper mill turns lumber into paper. a refinery takes crude oil and turns it into gasoline and hundreds of other useful products. Paraffin wax. Gasoline. Diesel. Asphalt and Tar . 365 days a year and requires a large number of employees to run.Introduction to Petroleum Refinery A refinery is a factory. Typical refinery products are LPG. Workers ride bicycles to move from place to place inside the complex. A refinery can occupy as much land as several hundred football fields. A typical refinery costs billions of dollars to build and millions more to maintain A refinery runs twenty-four hours a day.

What does refining actually do? Essentially.Output is raw (primary) products Secondary Processing. which then are selectively reconfigured into new products. b) Conversion (Cracking) and c) Reforming d) Blending & Treatment Crude oil contains many components which differ in boiling points.Output is commercial products which are used by us Crude Oil Primary Processing Raw Products Secondary Processing Commercial Products Separation Conversion . refining breaks crude oil down into its various components. Moreover crude oil can be categorized under •Light •Heavy (Asphaltic) •Sweet (Non-sulfurous-less than 1% of sulfur) •Sour (Sulfurous-more than 1% of sulfur)) Crude oil processing consists of two parts Primary Processing. relative solubility. All refineries perform four basic steps: a) Separation (Distillation).

separate lower down.eia. stay in the middle.html .gov/kids/energyfacts/sources/non-renewable/refinery. including kerosene and diesel oil distillates. while the heaviest fractions with the highest boiling points settle at the bottom.) Source.doe.Primary Processing-Separation Primary processing involves distillation at atmospheric pressure or under vacuum. vaporize and rise to the top of the tower. The lightest fractions. the liquids and vapors separate into components or fractions according to weight and boiling point. including gasoline and liquid petroleum gas (LPG). Medium weight liquids.http://www. Distillation causes separation of breaking up of crude oil into various petrochemicals Inside the towers. called gas oils. (Heavier liquids. where they condense back to liquids.

Primary Processing-Separation AS we learnt that distillation is done using two methods a) Atmospheric distillation b) Vacuum Distillation Atmospheric distillation Vacuum distillation .

eia. thick-walled. horizontal vessels and tall. into high-octane gasoline components. which essentially is cracking in reverse. Conversion is directed towards maximum gasoline production Cracking unit Cracking is not the only form of conversion. bullet-shaped reactors and a network of furnaces. The process. The most widely used conversion method is called cracking because it uses heat and pressure to "crack" heavy hydrocarbon molecules into lighter ones. We’ll learn more about these processes Source. moderate pressure and catalysts to turn naphtha.Secondary Processing-Conversion Primary products require further adjustment of chemical composition in order to become suitable for sale or petrochemical processing. Other refinery processes.http://www. a light. skinny towers that loom above other refinery structures. heat exchangers and other vessels. for example. Alkylation’s. relatively low-value fraction. This transformation takes place during conversion stage. Reforming uses heat. takes place in a series of large. makes gasoline components by combining some of the gaseous byproducts of cracking. instead of splitting A cracking unit consists of one or more tall.doe.html . rearrange them to add value.

oil is cracked in the presence of a finely divided catalyst which is maintained in an aerated or fluidized state by the oil vapors. DELAYED COKING . wherein heavier feedstocks are cracked in the presence of hydrogen to produce more desirable products. FLUID CATALYTIC CRACKING HYDROCRACKING Hydrocracking is a two-stage process combining catalytic cracking and hydrogenation. significantly lowers the viscosity of heavy crude-oil residue without affecting the boiling point range.Secondary Processing-Conversion Some of the conversion processes are shown below VISBREAKING A mild form of thermal cracking. In delayed coking the heated charge (typically residuum from atmospheric distillation towers) is transferred to large coke drums which provide the long residence time needed to allow the cracking reactions to proceed to completion.

For example.Reforming Reforming is another process designed to increase the volume of gasoline that can be produced from a barrel of crude oil. but their structure is generally more complex. Hydrocarbons in the Naptha (another petroleum byproduct) stream have roughly the same number of carbon atoms as those in gasoline. Reforming rearranges Naptha hydrocarbons into Gasoline molecules CATALYTIC REFORMING Catalytic reforming is an important process used to convert low-octane naphthas into highoctane gasoline blending components called reformates. .

Blending & Treatment The finishing touches occur during the final treatment. oxygen. vapor pressure ratings and special considerations. and metals from liquid petroleum fractions. sulfur. . Impurities like Sulfur are also removed to make Gasoline as clean as possible CATALYTIC HYDROTREATING Catalytic hydrotreating is a hydrogenation process used to remove about 90% of contaminants such as nitrogen. refinery technicians carefully combine a variety of streams from the processing units. Among the variables that determine the blend are octane level. To make gasoline. such as whether the gasoline will be used at high altitudes.

Bottled Gas Petrol Other Products Liquefied Petroleum Gas (LPG) Chemical Works Heavy Fuel Oil Jet Fuel Jet Fuel Diesel Fuel & Heating Oil Gasoline Diesel Fuel Lubricating Oil Don’t be surprised to know that a barrel of crude oil after refining will provide slightly more than 1 barrel of petroleum products. It provides the building blocks for countless products we depend on every day. For example.Some More About Refinery To Summarize every barrel of crude holds remarkable potential.html#How%20used . However that would also mean something else will be produced less. Source. This gain from processing the crude oil is similar to what happens to popcorn.doe. However the product mix can be changed as needed. the same barrel can be processed to yield more heating oil in winter. You can see below that petroleum in its more refined form contribute heavily to the modern economy. Wax Fuel Oil Power Station Tar (bitumen ) for roads If you are still wondering how much of what is produced here is a general breakup of the quantity of petroleum products produced in a it gets bigger after it is popped.

Some More About Refinery
Types of refinery
•Topping – CDU •Hydroskimming – CDU + Reformer •Cracking – CDU + Cracker •Coking – CDU + Cracker + Coker

Some of the refineries we may not have heard of
In India
•Haldia Refinery (IOC) 116,000 bpd •Panipat Refinery (IOC), 240,000 bpd •Digboi Refinery(IOC), 13,000 bpd •Gujrat Refinery(IOC), 68,000 bpd •Barauni Refinery (IOC), 116,000 bpd •Guwahati Refinery (IOC), 20,000 bpd •Mathura Refinery (IOC), 156,000 bpd •Bongaigaon Refinery(BRPL), 48,000 bpd •Manali Refinery (CPCL), 185,000 bpd •Jamnagar Refinery (RIL), 660,000 bpd •Mumbai Refinery (HPCL), 107,000 bpd •Vizag Refinery (HPCL), 150,000 bpd •Mumbai Refinery (BPCL), 135,000 bpd •Kochi Refinery, 146,000 bpd •Numaligarh Refinery (NRL), 58,000 bpd •Mangalore Refinery (MRPL), 190,000 bpd

World's Largest Refineries
•Paraguana Refining, Venezuela - 940,000 bpd •SK Corporation, South Korea - 817,000 bpd •Reliance I, India - 661,000 bpd •GS Caltex, South Korea - 650,000 bpd •Exxon Mobil, Singapore - 605,000 bpd •Reliance II, India (proposed) - 580,000 bpd •Exxon Mobil, Baytown, USA - 557,000 bpd •S-Oil, South Korea - 520,000 bpd •Hovensa LLC, Virgin Islands - 495,000 bpd •Exxon Mobil, Baton Rouge, USA - 493,500 bpd •Shell Eastern, Singapore - 458,000 bpd

Chapter- 6 Oil Distribution

Oil Logistics
Each one of us is a user of petroleum products. Between the refinery, where heating oil, diesel, petrol and gas are produced, and the end user, there is a distribution network that is responsible for getting these products to their final destination. Making available to each person the right product, at the right time, at the right place and at the lowest cost and in optimum conditions of safety and security, is the objective of petroleum logistics.

Am overview of petroleum distribution network

as well as special diesel fuels used by farmers and fishermen.Petroleum Depots Taking the petroleum products directly from the refinery to the customer is a complicated task. trains of tanker wagons. Each depot has 3 to 12 loading bays for the road tankers that will deliver the products to different consumers. petrol and diesel. In absence of any intermediary storage centres.http://www.Oil Logistics. That’s where strategic stocks also come into picture The petroleum products are taken from the refineries to the depots by bulk transport methods: pipelines. and aviation fuel A petroleum depot consists of 10 to 30 steel tanks.000 and 300. boats. from the refinery to the end user. river/canal barges. A tank can be as large as 60 000 m3. Ariel View of Petroleum Depots Source. to guarantee the maintenance of product quality and the absence of contamination by mixing.000 on average between 10.html . The principal products stored are heating oil. The products are regularly inspected throughout the whole distribution chain. Depot capacities are very variable. Petroleum depots are used as intermediate storage to serve a particular region. it would require large numbers of road tankers covering enormous distances everyday to meet the consumption needs.planete-energies. Other advantage of having depots is smoothening demand-supply imbalance caused by increased demand or disruption in supply.

The major users. Refinery Delivering fuel to the consumers Road Tankers Depots Hypermarket Petrol Pumps Petrol Pumps Petrol Pumps Source:http://www. are supplied directly from the refineries by rail (tanker wagons).Oil Logistics-Delivering to the End User Last step in petroleum supply chain is delivering the finished products to all the users who need them. by river and canal barges or even by pipelines carrying finished products. From petroleum depots. industrial plants.adventuresinenergy. large numbers of road tankers deliver fuel to filling stations and heating oil and gas to individuals and to companies. the distribution network involves intermediate . Let’s know more about these filling/gas station. For the other consumers like us.

The most common fuels sold are gasoline (petrol) or diesel fuel.“ Elsewhere in the English-speaking world the form "petrol station" or "petrol pump" are used. the term service station ("servo") describes any petrol station. it is called a "gasoline stand". it's called a Petrol Pump or petrol bunk.Oil Logistics-Gas Station Filling station. biodiesel. The term "gas station" is mostly used in the United States and Canada. Some stations carry specialty fuels such as liquified petroleum gas (LPG). In Japanese English. gas station or petrol station is a facility which sells fuel and lubricants for motor vehicles. hydrogen. or kerosene. where petrol is known as "gas" or "gasoline. fueling station. . ethanol. And finally in Indian English. compressed natural gas (CNG). In Australia. from the refinery to the end user.htm .Gas Logistics The products are regularly inspected throughout the whole distribution chain. Source.phmsa. to guarantee the maintenance of product quality and the absence of contamination by

12% of what you paid went to distribution & marketing.78 litre) at a petrol pump in US in 2004. 23% to federal and state taxes and 47% to crude oil. Price of petroleum products vary from country to country as tax rates are different.Prices and Taxes Did you know that the price that you pay at the pump is a lot higher than the cost price of the products? Why this difference? It results from the fiscal policy in the consumer country. As you can see. Figure shows the various components of price of a gallon (3. For example in Europe taxes on petroleum products are as high as 70% as a result of which a litre of petrol would be costlier in Europe than in US . 18% to refining costs& profits.

dot. you should have the understanding of the supply chain in Oil and Gas industry.http://primis. Please go through the following picture to have a quick recap of what you have learnt so far.Overall Oil & Gas Industry Supply Chain Till this point.htm .phmsa.

A quick Recap before we move to the last section We learnt so far • The importance of energy in our lives • Overview of oil and gas supply chain • What are hydrocarbons • Where do crude oil and natural gas come from • How are they produced • How are petrol. diesel etc are produced • How are they delivered to us .

7 Oil & Gas Producers .Chapter.

Example. OAPEC (the Organization of Arab Petroleum Exporting Countries) or the IEA (the International Energy Agency). A myriad of companies. organizations and consultants all play a part in the “hydrocarbon universe” •National companies. the largest in terms of proven reserves and production. •Small independent oil companies. the largest gas producer in the world •National agencies & government departments with responsibility for energy matters (For example DOE (Department of Energy) in the United States the DOE •International organization. mainly for exploration and production. in many countries. drilling. •Research institutes. which are often training centers too. such as Gazprom.Goservices. For example French Oil Institute •Independent consultants and other organizations or individuals who offer consultancy & design services and technical audits to the oil companies . Total and Chevron/Texaco. But they are not the only ones. Among the best known: Schlumberger. are also generally categorized as majors or supermajors. which. •Companies specializing in gas distribution.Oil & Gas Companies There are numerous actors in the world of oil and gas. • Companies operating in the oil sector as suppliers of services to oil companies. BP. Example Suadi Aramco. Transocean Sedco Forex These companies are involved in specific technical areas (geophysical surveying and analysis. the major oil companies and OPEC. Examples include Exxon Mobil. production equipment ). depth imaging. of course. supplying oil companies with personnel and equipment that the latter do not own or employ themselves. •International Oil Companies. which take over oil fields near the end of their useful lives. Shell. such as OPEC (the Organization of Petroleum Exporting Countries). Halliburton.Maurel et Prom in France. manage oil production and defend national interests in the hydrocarbon sector. The best-known are. or develop fields that have been abandoned by the major companies.

but Shell’s daily production is enough to meet India’s daily Energy consumption.Some Statistics on Oil Majors Look at the graphs below to find out how the five majors compare with the other top companies in the world Profit (Million $) Revenue (Million $) Believe it or not. .

Iran. Venezuela. Iraq. Qatar. Algeria. (what is called excess capacity). Kuwait and Iran. OPEC has virtually lost its ability to control prices. OPEC production has been working at almost full capacity and the possibilities of increasing production further. have become very limited. This system has allowed OPEC to fix a range for oil prices and thus to maintain price stability. These quotas are adjusted. Kuwait. the United Arab Emirates (UAE). As a result. Venezuela.The Institutions and Other Organization OPEC (Organization of Petroleum Exporting Countries) •Was founded in 1960 by Iraq. which have tended to soar in the recent times •Eleven members of OPEC are Saudi Arabia. At the beginning. the main objective of this organization was to redress the split of income between the oil producing countries and the oil companies.Nigeria and Indonesia . at regular or extraordinary conferences. in favor of the former. Saudi Arabia. But since 2004. to take account of the state of the world economy and its requirements. •OPEC works on the principle of limiting oil production by means of the allocation of quotas (authorized maximum quantities) to each of its members according to their reserves. Libya.

governments of the member countries have undertaken to implement joint measures to deal with emergency situations concerning petroleum supplies. With regards to the Kyoto protocol. the IEA made a report public on the 28 th of April 2005. and also plays a more and more important role in the protection of the environment. the IEA seeks to establish common ground and compromise solutions between signatories and non-signatories (the United States and Australia) of the protocol. as a reaction. The IEA keeps a sharp eye on the evolution of oil markets. all of which are industrialized countries and major hydrocarbon consumers. both to the OPEC offensive when petroleum prices rocketed at the end of 1973. In 2005. It is an intergovernmental organization for the co-ordination of energy polices. It was created in 1974. it had 26 members. and to the use of oil as an economic arm by Arab countries. The IEA works towards security of energy supplies. in which it recommended consumer countries to take preparatory steps to limit their oil consumption. The IEA is an autonomous unit within the Organization for Economic Co-operation and Development (the OECD). In a completely new and unexpected step. In addition. economic growth and environmental protection. • • • .The Institutions and Other Organization The International Energy Agency (IEA) • IEA unlike OPEC is an association of consumer countries. at the initiative of the United States. They have also undertaken to pool information.

Chapter.8 Production & Consumption Pattern .

507 million barrels per day.Reserves Middle East (Saudi Arabia. Kuwait. UAE) boasts of 60% of total world oil reserves followed by Venezuela. Iran. Million Barrels as on 1st Jan 2007 Source.World Oil and Gas Review . Russia. Libya.147. Total world oil consumption as of 1st Jan 2007 were 1. Iraq. Nigeria and rest of world.

Russia.World Oil and Gas Review .Consumption US is way ahead of the pack when it comes to oil consumption followed by China. Japan. Germany and India. Total world oil consumption as of 1st Jan 2007 was 84. Thousand Barrels per Day as on 1st Jan 2007 Source.5 million barrels per day.

World Oil and Gas Review .7 million barrels per day Thousand Barrels per Day as on 1st Jan 2007 Source. Mexico and China.Production Saudi Arabia claims the maximum contribution to the world oil production followed by Russia. US. Total world oil consumption as of 1st Jan 2007 was 83. Iran.

Production and Reserves Comparison Snapshot .Consumption.

http://www.html A cross section of an oil tank Back

An inside view of a petrol pump/station Back .

doe.html ctive/all_5000.You can visit these sites for more learning • http://www.howstuffworks.html • • http://www.html • http://www.html • http://www.

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