Downstream Economics & ManagementEAV/DEM

Who should attend?

  • This course provides participants a complete view of the economic principles of the downstream sector as well as the methods necessary for the decision-making processes.
Audience :
  • Professionals from the refining, the petrochemicals and the distribution sectors in a management position where they need to deepen their understanding of all the essential economic aspects as well as the management tools used in the oil downstream sector.

Level : Foundation

Course Content

  • TRADING

      • Oil supply and demand fundamentals.
      • Petroleum physical trading.
      • Financial trading (futures), markets place, derivatives.
      • Hedging and strategies.
  • REFINING & PETROCHEMICALS ECONOMICS

      • Brief technical overview of the main refining and petrochemical processes.
      • World refining and petrochemicals demand.
      • Evolution of the downstream supply: refining overcapacities, production nature and quantity.
      • Main challenges for the refining sector: deep conversion, new product specifications, petrochemical integration, environment, etc.
      • Refining margins and costs.
      • Case study: valuation of intermediate products of a FCC (Fluid Catalytic Cracking) unit.
      • Case study: refinery blending simulation.
      • Main characteristics of the petrochemical business: economic drivers, cyclic behavior, etc.
      • Case study: steam cracker economics.
  • OPTIMIZATION OF REFINING OPERATION - LINEAR PROGRAMMING

      • Linear programming (LP) principles: linear equation, objective function, profit maximization or cost minimization, Simplex method, graphic interpretation, etc.
      • Analysis of the LP results: optimum properties, marginal costs, domain of validity of the results, etc.
      • Case study on Excel: introduction to the preparation of a refinery model matrix (material balances, products specifications, utilities consumption, objective function, etc.); team work on the optimization of a cracking refinery.
  • REFINING OPERATIONS PLANNING - SCHEDULING

      • Principles of refining management: constraints, operations organization.
      • Monthly program to daily operations.
      • Optimization of margins from different process units.
      • Case study: management of typical sequential constraints (delays, processing problems, etc.).
  • INVESTMENT PROFITABILITY STUDIES

      • Value creation and capital cost, cash flows, discounting principle and inflation impact.
      • Standard global profitability analysis: cash flow schedule, economic criteria.
      • Introduction to risk analysis.
      • Exercises on various investment profitability studies for refineries and petrochemical plants.
  • STRATEGIC MARKETING

      • Marketing role in a firm and in the economy, marketing organization.
      • Measuring the firm's competitiveness.
      • Designing a development strategy.
  • SUPPLY CHAIN MANAGEMENT

      • Supply chain principles: definitions, review of activities, interactions with consumers.
      • Storage management: "pull" and "push" modes, basic tools for stock management, technical and economic aspects.
      • Supply chain design and methodological approaches: analysis of the industry (organization, process, location).
      • Benchmarking context.

Learning Objectives

  • Upon completion of the course, participants will be able to:
  • analyze the economic fundamentals of the energy scene, with a particular attention to the importance of oil markets dynamics and its impact on the economics of refining, petrochemicals and distribution,
  • evaluate the economic values of various intermediate or semi-finished products,
  • use linear programming models and management tools in order to optimize refining and petrochemical operations,
  • evaluate project profitability,
  • take part in the development of a marketing strategy,
  • analyze the supply chain of an industry.