Abstract
Oil companies have been using mathematical models to optimize their refining processes for decades. In light of continued low crude prices, the focus of cost-saving efforts is now on supply, transportation and storage of crude, where there are still plenty of pennies per barrel left to squeeze out. Profit margins in petroleum refining and distribution are now so thin that saving even pennies can make the difference between profit and loss. Almost all of the world's 75 million bbl of crude currently produced daily require transportation and storage for at least one part of the petroleum supply chain. Just as refinery operations have been optimized, the complexity of logistics in petroleum supply has necessitated the recruitment of management science experts. A typical refinery model consists of a set of linear or nonlinear equations that are derived by the refinery's characteristics. Among the variables of a refinery model is crude distribution. In today's refinery models, all variables are continuous numbers including tanker deliveries, e.g., 0.667 tankers discharging today.
Original language | English |
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Pages (from-to) | 21 |
Number of pages | 1 |
Journal | Petroleum Economist |
Volume | 66 |
Issue number | 2 |
State | Published - Feb 1999 |