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Fundamentals of Downstream

This document provides an overview of the downstream oil and gas industry. It defines downstream as processing, transporting, and selling refined products made from crude oil. The key aspects of downstream discussed are oil refining, supply and trading, product marketing, and wholesale and retail. Refineries convert crude oil into useful petroleum products through processing units. Major downstream products include gasoline, diesel, and jet fuel. The downstream industry provides thousands of products to end users globally.

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Wesam Salah Aloolo
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346 views29 pages

Fundamentals of Downstream

This document provides an overview of the downstream oil and gas industry. It defines downstream as processing, transporting, and selling refined products made from crude oil. The key aspects of downstream discussed are oil refining, supply and trading, product marketing, and wholesale and retail. Refineries convert crude oil into useful petroleum products through processing units. Major downstream products include gasoline, diesel, and jet fuel. The downstream industry provides thousands of products to end users globally.

Uploaded by

Wesam Salah Aloolo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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OIL 101

FUNDAMENTALS
OF DOWNSTREAM

EKTINTERACTIVE.COM
DOWNSTREAM
This Downstream overview includes:

Downstream Business Characteristics

Refining - Products and Participants

End-User Consumption - The Final Step in Adding Value

Wholesale and Retail Marketing

EKTINTERACTIVE.COM
What is Downstream?

EKTINTERACTIVE.COM
What is Downstream?

Processing, transporting and selling refined


products made from crude oil is the business of the
downstream segment of the oil and gas industry.

EKTINTERACTIVE.COM
What is Downstream?
Key downstream business sectors include:
Oil Refining,
Supply and Trading,
Product Marketing,
Wholesale & Retail.

EKTINTERACTIVE.COM
What is Downstream?

The downstream industry provides thousands of


products to end-user customers around the globe.

EKTINTERACTIVE.COM
Petroleum Products
Familiar Products:

GASOLINE HEATING

Unfamiliar Products:
SYNTHETIC PLASTICS PESTICIDES
RUBBER

LUBRICANTS
FERTILIZER

Petrochemicals
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Characteristics of Downstream
A Margin Business

Very Complex

Global Perspective Important

End-user Consumption

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Refining, A Margin Business

Downstream is a margin business.

Refinery Margin = price realized for the products -


cost of the crude

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Complex, Diverse Activities
The downstream segment includes complex and diverse
activities including:
• Refining
• Petrochemicals
• Distribution
• Wholesale and Retail Marketing

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Global Perspective

A global perspective is important because of the


global nature of the energy supply chain as well as
the impact of supply and demand on both
feedstock and product prices.

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Oil Refining

Crude oils are not uniform, but rather are mixtures of


thousands of different compounds called hydrocarbons.

Each component of each compound has its own size,


weight and boiling temperature.

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Refineries convert crude oil into a variety of useful products
through a number of different processing units using heat and
pressure to separate the products.

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Petroleum Products

The resulting petroleum products are often classified as


light, medium, or heavy.

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Light Products

Liquid petroleum gas (LPG) Gasoline (or petrol)

Naphtha - used as a solvent or paint thinner

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Medium Products

Middle Distillates Diesel fuel

Kerosene and related jet aircraft fuels

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Heavy Products

Fuel oils Lubricating Oils Paraffin Wax

Asphalt and Tar Petroleum Coke

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Participants - Integrated

Global Integrated Refiners:

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Participants - Independent

Major US Independent Refiners:

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Independents

Independent refiners will often have a chain of service


stations to market their products.

What makes them an independent is the fact that they


have no E&P operations.

EKTINTERACTIVE.COM
Join now for access to free eBooks,
members-only forums, and a growing
body of digital learning content.

Free eBooks include:


 History of Oil
 Upstream Fundamentals
 Midstream Fundamentals
 Downstream Fundamentals
 Business Processes/Risk Management
 Industry Trends

Learn More!

EKTINTERACTIVE.COM
End-user Consumption
A Margin Business

Very Complex

Global Perspective Important

End-user Consumption

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Fuel Products
Globally, the most widely known crude oil product is
Gasoline.

Other fuel products are diesel, jet fuel and


marine fuel oil.

Fuel products for transportation are 65%


of global demand.

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Product Marketing

Product marketing is the business of


finding and supplying wholesale and retail
customers.

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Downstream Customers

These customers possess either internal demand


for refined fuels or distribution networks for
reaching retail customers.

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Commercial Consumers
Large direct consumers of downstream products include:
Petrochemical & Industrial Manufacturers,
Utilities,
Municipalities,
Trucking Fleets,
Airlines.

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Retail Customers

Other companies may possess distribution assets


or branded sites aimed at reaching retail customers.

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There's More?

This Downstream material was taken from our


Oil 101: Introduction to Oil & Gas
course.

EKTINTERACTIVE.COM
Who are we?
EKT Interactive staff have provided oil and gas training
since 1986.

Visit us at www.ektinteractive.com to learn more.

EKTINTERACTIVE.COM

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