Petroleum Downstream Crash Course 1 - Introduction and Cost Breakdown of Oil Products
106As Promised:
Exxonmobil Annual Report (see summary annual report 2016, page 32-33)
http://corporate.exxonmobil.com/en/company/multimedia/publications/overview
Answer to Homework Question:
Let's first get an estimate of how much product on average we get from a barrel of oil.
According to the EIA in 2016, we have 20 gallons of gasoline, 4 gallons of jet fuel, 11 gallons of distillate fuel (I assume it’s diesel for simplicity), and about 10 gallons of other stuff like heating oil, naphtha etc.
Here's the website
https://www.eia.gov/tools/glossary/index.php?id=Distillate%20fuel%20oil
So how much is gasoline per gallon?
About US$2.84 on average.
And Diesel?
About the same (I checked on 16 November 2017)
$2.84
Prices are from this website:
http://gasprices.aaa.com/
And jet fuel?
US$5.20 per gallon on average or more
http://aviationweek.com/bca/jet-and-avgas-fuel-prices-august-2015
What about that other stuff?
My price estimate will be more conservative, I'm assuming all that other stuff is bunker fuel - a very thick cheap oil used for ships.
Some sources say it costs $380 per metric tonne
https://shipandbunker.com/prices/apac/sea/sg-sin-singapore
So what's US$380 per MT to cost per gallon?
Density of bunker
First convert it to volume:
(0.98 specific gravity)
980 kg/m3
http://www.viscopedia.com/viscosity-tables/substances/bunker-oil-marine-fuel-oil/
So 1 MT is 1000kg and that is about
1000 kg / 990 kgm-3 = 1.02 m3
Convert that to a number of gallons on google, we get about
269.5 gallons.
Compute the cost
US$380/269.5 gallons
= US$1.41 per gal
If we have other more expensive stuff besides bunker, we have an average of about US$1.70 based on just a rough gauge.
Lets say in 2015 the average cost of oil is US$50 per 42 gal (1bbl)
And let’s sum up the revenues per barrel:
Revenue from Gasoline + Revenue from Diesel + Revenue from Jet Fuel + Revenue from Other Products
2.84*11 + 2.84*20 + 5.2*4 + 1.70*10
= $125.84
We can make about US$125.84 revenue per barrel.
References/Bibliography
[1] EIA, Petroleum Products Made from a Barrel of Crude Oil 2016, 2016.
[2] ExxonMobil, Annual Report, ExxonMobil, 2016.
[3] R.D. Shell, Annual Report, Royal Dutch Shell plc, 2016.
[4] J.H. Gary, G.E. Handwerk, M.J. Kaiser, Petroleum refining: technology and economics, CRC press2007.
[5] Magellan, Pipeline Product Specifications, 2017.
[6] L. Gibbs, Motor Gasoline Technical Review, Chevron, 2009.
[7] J. Bacha, Diesel Fuel Technical Review, Chevron, 2007.
[8] S.B. Bakshi, F.H. Henderson, PERMISSIBLE EXPOSURE LEVELS FOR SELECTED MILITARY FUEL VAPORS, Inhalation Toxicology, 10 (1998) 955-961.
[9] M.B. Vermeire, Everything You Need to Know about Marine Fuels, Chevron Global Marine Products, Belgium, 2012.
[10] Chevron, Ethylene High Purity Pipeline Specifications, Chevron Phillips, 2010.
[11] T. MAHMOOD, OIL TRANSPORT, STUDENT ENERGY, 2017.
[12] D. Kodjak, POLICIES TO REDUCE FUEL CONSUMPTION, AIR POLLUTION, AND CARBON EMISSIONS FROM VEHICLES IN G20 NATIONS, 2015.
[13] IMO, IMO sets 2020 date for ships to comply with low sulphur fuel oil requirement
International Maritime Organisation, 2016.
[14] R.G. Daniel Monzón, Alfredo Verna, Micaela Carlino, What is next for petroleum downstream?, Arthur D. Little, 2016.
[15] BP, Annual Report, BP, 2016.
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