Trinidad
and Tobago
Energy
12th Annual
Energy
Caribbean
Conference 2015
Conference
Operating in a
Analysing the Downstream
Market: The
Low Oil Price
Disappearance of Caribbean Refineries
Environment
Colin Ramesar
Utilities
Vice President,Manager
Refining and Marketing
Petrotrin
Refining Division
Mado Bachan
2015 January 27
1
03rd October 2012
Market Fundamentals
2
Snapshot of global oil fundamentals and prices
Snapshot of global oil fundamentals and price outlook
2013
2014
2015
2016
2.6%
2.7%
3.1%
3.5%
1.3
1.1
0.9
1.2
1.3
2.0
1.2
0.09
31.2
29.8
29.1
30.0
3.1
3.2
3.2
3.3
$109
$99
$47
$63
$98
$93
$43
$59
FUNDAMENTALS
World economic growth
(from previous year)
World oil (liquids) demand growth*
(from previous year in MMb/d)
Non-OPEC liquids supply growth*
(from previous year in MMb/d)
Call on OPEC crude*
(annual average in MMb/d)
OPEC crude spare capacity*
(annual average in MMb/d)
PRICES
Dated Brent
(annual average per barrel)
WTI
(annual average per barrel)
© 2014 IHS
Source: IHS
January 2015
3
Benchmark crude price outlook
Dated Brent to average $47.25/bbl in 2015 amid global oversupply
Source: IHS
January 2015
Projected World Oil Demand
Source: PIRA
Global Refinery Utilization under Pressure
through the Medium Term
0
Source data PIRA-Cracking
6 (Gross)
Margin
Source: PIRA
US shale oil production expected to decrease at
lower oil prices
Current WTI ~ US$46.39/bbl
7
Source: PIRA
How will Petrotrin adapt
to these changes?
8
The Refining Business is a Margin
Driven Business!
•
Refiners are not “obsessed” with the absolute price of oil…it’s
the margin that matters
•
Gross Margin is broadly defined as:
Sales Revenue – Cost of Feedstock
•
Short term Gross Margin is influenced by several factors, such as:




Refinery Capacity Utilisation
Crude Supply / Demand Balance
Product Supply / Demand Balance
Seasonality / Weather / Geopolitical
Gross Margin impacts our cash flows
•
9
Technology
•
•
•
•
Upgraded process units (GOP
and ULSD)
•
Completed turnarounds on
majority of existing process units
and facilities
•
Upgraded steam, water and
electrical infrastructure
Capable of meeting changing
product specifications
Strategic Location
•
•
Well positioned to supply the
premium regional markets
Coastal location allows for easy
movement of crude and
products
Feedstock Supply and
Logistics
Access to cost-advantaged local
crude oil
Sufficient infrastructure in place
to bring on and off-shore
produced indigenous crude to
the refinery
Competitive Advantages
•
•
•
•
The refinery has potential to
provide natural hedge during
times of low oil prices
Cost-advantaged gas for refinery
fuel and hydrogen production
Trained and experienced staff
and contractor resources
Flexibility to accommodate
Caribbean market demands of
small multi-product cargoes
Petrotrin is a “price taker” –
we have no control over the
absolute price of crude oil
and derived products
Our focus remains on the elements that we can
control
PAP
Refinery
1
Bringing key process units
back online
2
Improving site-wide asset
integrity and reliability
3
Optimizing all aspects of
operations to increase income
Managing operating expenses
4
5
Improving organization
capability
Bringing key process units back online
Improving our Refinery Utilization
and Availability is critical to
improved performance
• Major VDU and VBU units
now back online
• FCCU Train process units
in process of start-up
• Improved product slate
available for sale
• Lower fuel oil yield
• Improved refining margins
and cash flows with sale of
higher-valued finished
products
13
Our goal is always be ensure safe and
environmentally compliant operations
Improving our asset
integrity and reliability
Continued investment in
refinery maintenance and
upgrade
Engagement of an international
Asset Management consultant
Implementing an Asset
Integrity Management System,
in-line with ISO 55001
standard
14
Optimizing all aspects of our operations
Operations excellence
Optimizing feedstock
selection, to ensure costadvantaged crude oil to
supplement local crude avails
Expertly manage crude and
product inventories in
response to market trends
Re-engineering our business
processes to maximize our
refining margin
15
We have direct control over our operating
expenses
Managing our operating
expenses will improve our
cash flows
Improving our energy
efficiency and off-gas
recovery
Managing our personnel
and maintenance costs
Improving our process
efficiencies
16
We must always strive to improve our human
resource capability
Improving organization
capability
Experienced Refinery
Leadership Team
Streamlining of
Organizational Structures
Focused training
throughout all levels in the
organization
17
Overview of Petrotrin’s
R&M Operations
18
The Pointe-a-Pierre Refinery
Petrotrin owns and operates the sole crude oil refinery in the country
• 168,000 BPD full conversion capability post-GOP
• Capable of processing a variety of crude oils

Refinery processes a mix of crude oils in the range 23 – 32o API

Utilizes locally produced and imported crude oil
• Diversified supply sources
FY2014 Crude Oil Receipts
Total: 40.7 MMBBLS (111,537 BPD)
19
Total: 22.4 MMBBLS (61,345 BPD)
The Pointe-a-Pierre Refinery
• Main refined petroleum products include:
Typical Yields Pre-Clean Fuels Upgrade
LPG
2%
 LPG
Gasoline
21%
 Motor Gasoline
 Jet Fuel
Diesel
24%
Jet
11%
 Diesel
Gas/Loss
2%
 Fuel Oil
 Other (Sulphur, Intermediates)
• Petrotrin receives crude oil and exports refined petroleum
products through its loading / receiving facility at Pointe-aPierre
Other
7%
Fuel Oil
33%
Expected Refining Product Yield Post Clean
Fuels Upgrade
Gas/Loss
2%
 Handle vessels of up to 120,000 DWT
Jet
12%
LPG
1%
 Approximately 60 vessels per month
• PAP refinery has crude oil storage capacity of approximately
2.2 mmbbls, equivalent to 13 days of Refinery throughput
Diesel
27%
• Capacity to store 5.6 mmbbls of refined product
Fuel Oil
31%
20
Gasoline
27%
Sales and Marketing
• Products enter four (4) market channels:
Bunkers
3%
 Local (including Bunkers)
 Regional
 Extra-Regional
Local
25%
International
40%
 International
• Sole provider of refined products in Trinidad and
Tobago (except lube oils)
• Current supply to Caricom EC primarily via
Marketers in the area
• Products sold to the international market mainly
fuel oil and intermediates
• Sales in the Regional and Extra-Regional markets
done via majors and traders
21
ExtraRegional
15%
Regional
17%
FY2014 Sales Volume, by market
21
Update on the ULSD Project
• Latest Estimated Cost:
US$503 million
• Conceptual re-engineering
for structural remedial
works and seismic upgrade
in progress
22
Thank You
23