You are a refinery manager in charge of deciding on the product slate for your refinery. You must make both qualitative and quantitative judgements on which products your refinery is to produce in the wake of the 2020 Coronavirus outbreak, with a Brent ICE crude oil price of approximately $40 a barrel.
1.Differentiate between the major petroleum products, users, and their main applications.
2.Calculate and analyse refining margins and costs relating to distribution and marketing.
- Considering which products would be most in demand, given the low oil price, and the current global economic situation –
- Identify and describe Five (5) different products that your refinery could produce
- Explain briefly the means of manufacturing these Five (5) products (chemical reaction equations are not required)
- And an intended application for each of the Five (5) products.
- Analyse any advantages and disadvantage that your Five (5) chosen products produced have, such as damaging effects on health and environment compared to alternatives, if they exist.
- Calculate the expected profit based on a single barrel of oil priced at $40 and the amount of product which can produced from a single barrel (use Brent Crude as your referencebenchmark crude) and the following assumptions:
- Price of a barrel of Brent Crude: $40
- Price of Petrol at a UK Petrol Station in March 2020: £1.05 per litre
- Percentage of Petrol Pump Price which goes to the wholesaler: 27%
- Profit margin of wholesaler: 5% of rack price (which wholesaler charges the filling station)
- Conversion rate of dollars to pounds: $1.24 per UK pound
- 45% as an assumption of PETROL YIELD in the conversion of Brent Crude into Petrol for a good refinery – this can be referenced using the words “as shown in class”
- Describe two pieces of equipment such as upgraders, vacuum distillation unit, fluidized
catalytic crackers etc. which could allow you to maximize your refinery’s profit from the
sales of petrol and discuss the advantages that these two piece of equipment could bring.
- Provide a set of recommendations for future expansion or improvements that your refinery could undertake to improve its profitability.
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