Course Details

Objective

By the end of this course, participants will be able to:

• Understand the fundamental economic principles involved in refinery operations.
• Learn how to analyze and optimize refinery costs, revenues, and profitability.
• Gain insight into refining margins and their role in economic decision-making.
• Understand market dynamics, including crude oil pricing, product prices, and demand fluctuations.
• Develop the ability to use financial models to evaluate refinery projects and investments.

Content

Day 1: Introduction to Refinery Economics

• Overview of the refining industry and its importance to the global economy
• Basic economic principles in refining: supply and demand, market competition, and pricing
• Key economic factors affecting refinery operations (e.g., crude oil prices, refining margins)
• Understanding the refining process from an economic perspective
• The relationship between refinery capacity, efficiency, and profitability

Day 2: Refining Margins and Profitability

• What are refining margins and how are they calculated?
• The impact of crude oil prices and product prices on refining margins
• Key drivers of refining margins: crude oil price volatility, product demand, and operational efficiency
• Factors influencing refinery profitability: yield optimization, cost control, and product mix
• Techniques for improving refining margins and maximizing profitability

Day 3: Cost Structure and Economic Performance of Refineries

• Breakdown of refinery cost structure: capital costs, operating costs, and maintenance costs
• Cost allocation and cost control strategies in refinery operations
• Impact of energy costs, labor, and raw materials on refinery economics
• Analyzing operating expenses and capital expenditures
• Financial performance indicators for refinery operations (e.g., return on investment, break-even analysis)

Day 4: Financial Modeling and Investment Analysis for Refineries

• Introduction to financial modeling in the refining industry
• Developing and using financial models for refinery projects
• Investment evaluation techniques: Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period
• Analyzing risks and returns for refinery investments
• Evaluating the impact of market fluctuations on investment decisions

Day 5: Market Dynamics and Strategic Decision-Making

• Understanding market demand for refined products and its impact on refinery economics
• The role of government regulations, taxes, and subsidies in refinery economics
• Strategic decision-making: refining capacity expansion, product diversification, and market positioning
• The role of technology and innovation in improving refinery economics

NOTE:

Pre-& Post Tests will be conducted.

Case Studies, Group Exercises, Group Discussions, Last Day reviews, and assessments will be carried out.

………………………………………………………….

Methodology

A highly interactive combination of lectures and discussion sessions will be managed to maximize the amount and quality of information and knowledge transfer. The sessions will start by raising the most relevant questions and motivating everybody to find the right answers. You will also be encouraged to raise your own questions and to share in the development of the right answers using your own analysis and experiences.  Tests of multiple-choice type will be made available on daily basis to examine the effectiveness of delivering the course.

Very useful Course Materials will be given.

• 30% Lectures
• 30% Workshops and work presentation
• 20% Group Work& Practical Exercises
• 20% Videos& General Discussions