Commercial Oil Operations and Logistics
Oil & Gas Technology and Corrosion
Course Description
INTRODUCTION
The Oil and Gas operations are multifaceted, logistically
complex, highly capital intensive, and often confronted with potential risks
and uncertainties. Today’s oil companies are dealing with ever-increasing
levels of complexity and competition. Innovative technologies in the recovery of oil are also changing the
landscape of the petroleum industry. Integrating refining and petrochemicals to
achieve greater efficiencies is another critical factor in business
profitability. Managing global supplies, refining, and oil trading requires
several cross-functional skills. To achieve maximum effectiveness, managers and
professionals must continually expand their business knowledge and sharpen
their skills.
Objectives
At the end of this Commercial Oil Operations and Logistics
training course, participants will be able to:
Gain a broad perspective of the global oil business, supply,
transportation, refining, and trading
Boost understanding of the fundaments of the oil business:
quality, blending & valuation of oil for trade, freight and netback
calculation & refinery margins calculations, vessel chartering, pipelines
& terminals, etc.
Master the Total barrel economics, oil market futures,
hedging & futures, and price management considerations
Assess the technical, commercial, legal, safety, and
environmental views/aspects of the oil business
Confidently and positively discuss the technical terms,
concepts, and buzzwords with your colleagues and clients
Course Outline
DAY 1
Exploration, Production, Supply and Petroleum Economics
& Logistics
Introduction to Course
Introduction to How Oil was Formed
Origin, Accumulation and Migration of Petroleum
Essential Requirements for Hydrocarbon Accumulation
Fundamentals of Oil & Gas Geology and Petroleum
Engineering
Introduction To Oil & Gas Geology
Simple Anticline Structural Trap
Barrier or Closure – Reservoir Traps - Reservoir Mapping
Oil & Gas Drilling Techniques
Types Of Drilling – Exploration, Delineation, Appraisal,
Developmental, Maintain Potential Wells
Drilling Circulatory System – Safety and Environmental
Impact
Well Logging and Well Completion
Tools and Techniques for Evaluating Oil & Gas Wells
Open and Cased Well Logs
Functions of Well Casing
Benefits of Horizontal Well over Vertical Well -
Multilateral Well Completions
Essence of International Oil Supply – Global Reserves,
Production & Trade
Introduction to global oil business - Exploration,
Extraction, Refining, Marketing, Transportation
Global Oil Resources – World Oil and Gas Reserves,
Production of Oil and Gas
Industry units – for the USA, Europe and Asia, Conversion
factors
Crude Oil Classifications
Crude Oil Quality Indicators, crude oil characterisation by
Assays
Crude Oil Distillation – Refined Products
Oil Industry Units and Conversion Factors
Fundamentals of Oil Economics
The delivered price of crude oil – the concept GPW (Gross
Product Worth)
Net Refining Margin calculation
Value of Crude Oil and the Determining Factors in Crude
Selection
DAY 2
Transportation, Refining, and Marketing
Fundamentals of Crude Oil Transportation – Logistics of
Tankers and Chartering
International Oil Tanker Sizes, Tonnage, and
Types of Charters and Charter Parties
Freight Payment, Chartering Mechanism, Voyage Charter, Time
charter
Roles of Shipbroker, Shipping Agent, Bunkering, Arbitrage,
daily Net Contribution
Basic Principles in Pricing and Overview of Markets
Causes of Oil Price Volatility
The History of Oil Price – Real and Nominal
The Future of Oil Price - Oil Imports & OPEC’s
Production, & Consumption
The Future of Oil Price - Global Reserves Replacement Ratio
The Physical and Paper–Oil Markets
Price Markers of the World – Crude Oil Benchmarks: WTI,
Brent, Dubai/Oman, ASCI, OPEC Reference Basket
Methods of Sale – Spot, Term
Regional Pricing – North America, Europe & Asia
Price Reporting Methodology – Price Report
Crude Oil Markets – Commercial and Logistics
History of Crude Pricing
Location of Pricing
Marker crudes
Refined Products Quality - – Commercial and Logistics
Crude Oil Refinery – Size and Configuration – Skimming,
Catalytic, Thermal Cracking
Refinery Yields by Crude Type, Refinery Margin Calc., and
factors affecting Profitability
Essential Refinery products and Specifications
Need for Blending and blending exercise
Prices at Pump, Oil & Gas Earnings Versus Other
Industries, Return on Investments
Refined Products Market
Product Pricing Determinants
Product Pricing Quotations
Product Pricing Spec-base
Product Pricing Assessments
Fundamentals of Product Trading
DAY 3
Commercial Contracts, Sales, and Marketing Logistics
Essential Elements in Crude Oil Sales Contracts
The Objective, the parts of the Contract, and the Contract
Confirmation
Attributes and Buyer/Seller Responsibilities with INCO Terms
– FOB, CFR, CIF, DES
Important Oil Contracts Clauses
Payment and Security
General Terms and Conditions
Basic Refining II – Conventional Refinery Upgrading
Cat Cracking
Hydrocracking
Visbreaking
Coking
Basic Refining III – Sulfur Reduction
Sulfur Reduction Methods – Lighter Compounds and Heavier
Compounds
Hydroprocessing
Sulfur Reduction measures
Other Sulfur Reduction Processes
Contracts – Elements of Risk
Identify areas of risk
Credit performance risk – LOC, Standby LOC, Parent company
Guarantee
Operational Risks - Vessel nominations, Quantity and
Quality, etc.
Charter Party Risks
Basic Refinery IV – Economics & Environmental Aspects
Yields for Different Configurations
Value Contributions for Different Configurations
Investments costs
Environmental Considerations
Primary Logistics
Pipeline transfers - Advantages and Disadvantages
Pipeline Scheduling
Pipelines Investment Considerations - Tariffs and Operating
Economics
Major Pipelines of the World
Storages
Losses – Net loss, In-Transit Loss, Inturn loss, Outturn
Loss
DAY 4
Market Structures, Oil Trading and Logistics
Introductory Concepts in Oil Trading
Players in the Oil Market
Success Factors in Trading
Risk Factors in Trading
Trading Objectives and Price Movements
Market Structures – Contango and Backwardation
Interface with retailers
Competitive Marketing – Primary and Secondary Supply
The Value Chain – E&P to the Customer
The Retail Market Place
Fully Vertically Integrated Oil Company Model
The Essential Success Factors in Retailing
Downstream Supply Chain management
The Essential Success Factors in Supply Management
Total Barrel Economics
Measures of Profitability
Net Marketing Revenue – Refinery Netback
The Cost of Supply and Total Barrel Margin
Transfer price – An Alternate Value
Typical Oil Company, Distribution and Marketing Costs
Maximising Corporate Profits
Oil Markets – Futures
Market differences – Forwards and Futures
Characteristics of Futures Contract
What is the Futures Market?
What is Margin Money?
How are Futures used?
Price Exposure
Trading For-profit
Taking Buy or Sell Position – Long vs Short
Priced Vs Unpriced Exposure
What is Unpriced Purchase and Unpriced Sale
DAY 5
Petroleum Dynamics and Risk Management
Hedging – Risk Management
Use of Futures and Forward Markets
Example of Hedging
Removal of Absolute Risk – Introduction of Basis risk
Pricing Management
What is Price Management?
Price Management Example
Price management Outcome
Derivatives
What are Swaps?
Example of Swap Transactions
What are the Options?
Example of Option Transactions
Attributes of Swaps and Options in the Oil & Gas
Industry
Examples of Oil & Gas Futures Contracts, Swaps, and
Options
Common mistakes by Oil & Gas Companies in Hedging
A Guide To Developing A Corporate Fuel Risk Management
Policy
Challenges to Petroleum Industry and Trends in New
Technology