The Petroleum Industry Supply Chain: Processes and Principles

This 3-day course focuses on the review and examination of the key elements of the supply chain from upstream activities of exploration, development and production through transportation to downstream sector that involves refining, petrochemicals and final distribution to the consuming markets.

  • Course Instructor

    William has over 37 years of experience in the international oil and gas business. He has had experience of sales agreements dating back to the early 1970s with ‘life-of-field’ gas sales contracts to the U.K.’s then monopoly gas utility; BGC. 

    For over 26 years he worked for North American oil companies including ARCO, Marathon and Talisman on operations in Europe, Africa and the Middle East. 



Topics covered:

  • Review of the current petroleum markets; oil and gas supply and demand, future global trends
  • Key concepts and processes in exploration, development and production
  • The emergence of expanding natural gas markets, future growth trends global trade through LNG, inter-regional trade through long-distance pipelines, gas to power markets
  • Refining and Petrochemical manufacturing processes; cost, prices and margins
  • Transportation logistics, costs and tariffs; marine tankers, pipelines, rail, river and road
  • Global trading markets for oil, gas and refined products; physical and derivative markets
  • Refined products and their market distribution
  • Retail transportation fuel markets

Course Overview

The petroleum industry comprises three key sectors that utilise crude oil, natural gas and natural gas liquids through the supply chain.

These sectors are as follows:-

  • The Upstream that comprises exploration, development and production activities
  • The Midstream that comprises transportation of petroleum liquids and gases via pipelines, terminals and marine, rail and road tankers.
  • The Downstream that manufactures products through refining and petrochemical processes and distributes these products to the consuming markets

Crude oil and natural gas together currently account for 59% of global primary energy demand. Not only do oil and gas represent important commodities but they are also at the centre of economic activity of societies. They have primary strategic
and political significance.

This 3-day course focuses on the key elements of the supply chain. The course has appeal to attendees from both technical and non-technical backgrounds. However, emphasis is given to the commercial and economic drivers that impact the supply chain.

Who Should Attend

  • Corporate Planners
  • Senior oil and gas managers
  • Investment bankers
  • Fund managers
  • Investment analysts
  • Media analysts and commentators
  • Government agencies

Benefits of Attending

  • Gain a greater understanding and insight of the activities of the supply chain
  • Understand the prices, costs, and margins in each of the sectors
  • Recognise the future trends and risks for the petroleum industry

Day 1

The Upstream

Exploration, Development and Production

  • Current status of the petroleum markets; facts, statistics and trends
  • Forecasts for expanding global oil demand against decreasing supply. The ‘peak oil’ challenge
  • The origin and global distribution of oil and gas reserves and production
  • Petroleum Quiz
  • Petroleum Reserves, definitions, recovery factors and production profiles
  • The key exploration and production technologies; seismic and drilling
  • Oil and Gas field developments
  • Exercise: Planning an offshore drilling campaign in West Africa
  • Case Study: The development of a major offshore oilfield
  • Improving and enhancing petroleum recovery
  • Price volatility, costs and margins in upstream activities

Day 2

The Midstream

Transportation, Distribution and Storage and Trading of Crude Oil and Natural Gas

  • Crude Oil Transportation
    • Pipelines: throughputs, tariff and treatment, pipeline economics,
  • Case studies
    • Oil tankers: Worldscale rates, illustrative costs
  • Exercise: Crude Oil shipments from Arabian Gulf to U.S. Gulf
  • Natural Gas Transportation; natural gas characteristics, pipelines and LNG supply. Comparative gas transportation economics; pipelines vs. LNG
  • Exercise: Considering options for gas imports
  • The Crude Oil trading markets; crude oil characteristics, benchmarks and differentials. Physical term and spot
    markets. Derivatives; forwards, futures, swaps and options
  • Exercise: Hedging and Options
  • The Natural Gas trading Markets. Trading hubs. Long term contracts, spot purchases
  • Exercise: Purchasing Gas For An Electricity Utility
  • Storage of Crude Oil and Natural Gas

Day 3

The Downstream

Refining, Petrochemicals and Market Distribution

  • The Refining Process; technologies, costs and margins
  • Exercise: Choosing crude oil supply for a Gulf coast refinery
  • Refined Products: commodities-gasoline, diesel, naphtha and kerosene and specialties ( waxes, lubricants)
  • The Petrochemical Processes; feedstocks, base chemicals, end-user products, global trends and risks
  • The Natural Gas Markets; Industrial, Commercial, Residential, Gas-to Power, Petrochemicals and Agrochemicals
  • Quiz: Refinery and Petrochemicals
  • The Fuel Retail Markets: De-integration of the supply chain, changing and evolving market conditions, marketing economics
  • Exercise: A fuel retailer negotiating change of supplier
  • Putting it all together
    • Challenges confronting the petroleum industry
    • Group discussion with delegates
  • William has over 37 years of experience in the international oil and gas business. He has had experience of sales agreements dating back to the early 1970s with ‘life-of-field’ gas sales contracts to the U.K.’s then monopoly gas utility; BGC. 

    For over 26 years he worked for North American oil companies including ARCO, Marathon and Talisman on operations in Europe, Africa and the Middle East. 

    Since late 1998 he has been an independent oil and gas consultant. Assignments have included projects with a wide range of clients involved in the oil industry. Latterly, he has been involved in sales agreements covering crude, natural gas and refined product sales on behalf of oil company clients. 

    In 2009 he was a key consultant on a European Commission study into the competitive aspects of crude oil and product markets in the EU-27 member states.

    He is also actively involved in delivering training and development programmes to delegates actively involved within the oil industry. He is a fellow of the Energy Institute, London.



 
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