Refining Costs Estimation

Refinery Operation Planning

The basic organization of an oil company consists essentially of three main
departments:

• The transportation department

• The refining department
• The marketing department
The functions of these three main departments are coordinated by a supply
department.

The Rules of Planning

Before looking at the development of running plans in some detail, it is necessary

to understand some fundamental rules. These are listed below and are the
“Planning Data” :

• Equipment availability

• Plant performance

• Service factors

• Product quality

• Planning properties

• Blending properties

• Crude availability

• Crude quality
Economic Rules

Using the planning rules, it is possible to devise an infinite number of schemes that
would meet the majority of the market requirements.

How is the refining cost estimated?

The total cost divided in two types:

1. Fixed costs
2. Variable costs

Fixed costs : are typically measured relative to crude processing capacity (e.g.,
USD/bbl crude distillation capacity). Fixed costs are also frequently subdivided
into costs

1. Maintenance costs

2. Operating costs

3. Costs of management the refinery

Variable costs: are any costs that vary with the level of refinery throughput.
Examples include energy, catalyst, and chemicals. Generally, all costs are
assumed to vary with refinery size and with refinery complexity

Factors impacting refining productivity

The key factors influencing refining productivity include the following:

1. Refining capacity
2. Complexity
3. Utilization rates
Refining capacity refers to the amount of oil a plant can refine. Complexity
determines the type of crude oil consumed and the quality of refined products
produced. Utilization rates show how much of refining capacity is used to refine
oil, which can depend on things like efficiency, maintenance, and turnaround
activities in the unit.

The higher the refining capacity and utilization rates, the higher the production of
refined products, and so refining capacities and utilization rates directly impact the
incomes of refining sections.