A Brief History of Oil ......................................................................... 7
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How does a refinery work?...................................................................................................134
Key variables impacting refinery performance ......................................................................138
Configuration and complexity ...............................................................................................138
Choice of Crude – Heavy, sour, sweet and light ...................................................................141
Location ...............................................................................................................................143
Other factors........................................................................................................................143
Regional balances and market structure ...............................................................................145
Measuring Refining Profitability ............................................................................................147
US margins ($/bbl).................................................................................................................148
NWE margins ($/bbl) .............................................................................................................148
Asian margins ($/bbl).............................................................................................................148
Gasoline/fuel oil crack spreads US/Europe............................................................................149
What drives refining margins? ..............................................................................................149
Refining Industry Structure ...................................................................................................151
Petroleum Administration for Defence Districts (PADDS) ....................................................151
Marketing ....................................................................................... 153
Stability in a cyclical world ....................................................................................................153
The wholesale/retail chain.....................................................................................................155
Removing capital, containing costs.......................................................................................156
What’s in a litre of fuel? European Retail Data......................................................................157
What’s in a litre of fuel? US Retail Data ................................................................................157
Biofuels........................................................................................... 158
What are biofuels? ................................................................................................................158
Why use biofuels? ................................................................................................................158
Where are biofuels produced and used? ..............................................................................159
The regulatory framework.....................................................................................................160
Key legislative measures.......................................................................................................160
Bioethanol .............................................................................................................................162
Biodiesel ...............................................................................................................................164
Criticisms of biofuels ............................................................................................................165
Long-term developments in biofuel ......................................................................................166
Petrochemicals .............................................................................. 167
Part of the integrated chain................................................................................................... 167
The olefin plant (cracker) .......................................................................................................168
Petrochemical Industry profitability.......................................................................................170
Olefin and Aromatic Building Blocks and their Chains ..........................................................172
Ethylene – C2 Olefin..............................................................................................................172
Propylene – C3 Olefin ...........................................................................................................172
Butadiene – C4 Olefin ...........................................................................................................173
Benzene – C6 Aromatic.........................................................................................................173
Paraxylene – C8 Aromatic ....................................................................................................174
The Major Plastics or Polymers ............................................................................................175
Polyethylene (PE) ..................................................................................................................177
Polypropylene .......................................................................................................................177
Purified Terephthalic Acid (PTA)............................................................................................177
Conventionals & Unconventionals............................................... 179
Conventionals .......................................................................................................................179
Unconventionals ...................................................................................................................179
Liquefied Natural Gas (LNG) ........................................................ 180
Overview..............................................................................................................................180
LNG - The process and the chain ..........................................................................................182
LNG – returns across the chain.............................................................................................183
Pricing of LNG.......................................................................................................................185
Costs of LNG Production ......................................................................................................187
Shipping of LNG....................................................................................................................188
Re-gasification of LNG ..........................................................................................................189
Existing LNG facilities and facilities planned 2006-12................ 191
LNG - The IOCs Portfolios and Positions ..............................................................................193
The IOC majors compared ....................................................................................................195
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