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									THE ECONOMICS OF PETROLEUM REFINING

Over the past decade, there has been significant volatility in the profitability of petroleum
refining. In order to put this volatility in perspective and to gain some insight into future trends,
it is important to understand the fundamental factors that affect refinery product prices and
margins. The program will begin with a detailed discussion of both crude oil and product
markets, including pricing and trading options. The program then moves into the refinery to
explore the effects of crude oil type on refining yields and to examine the interactions between
crude oil selection and refinery complexity. The final sessions will provide an understanding
of how refining configuration and product markets affect refining margins. The program will
conclude with an examination of how new fuel regulations will change both the future
investment requirements for refiners and the outlook for refinery profitability.

The seminar sessions will be presented by Mr. Larry Clevenger and Mr. Gerry Hickman, both
of whom are refining industry consultants. These experienced professionals have extensive
backgrounds in refining technology and in the petroleum refining industry's economics.

This program is a survey course, designed for anyone interested in the economics of the
petroleum refining industry. Personnel from refiners and marketers, industry product suppliers,
service and consulting companies, financial and insurance organizations, and government
agencies will find the material very informative and quite useful. Those more experienced in
refining and interested in an in-depth look at refinery economics should attend our "How To
Improve Refinery Profit Margins" program.


PROGRAM OUTLINE

1. Crude Oil Purchasing Considerations
   • Crude Oil Supply and Demand Overview
   • How is Crude Oil Bought or Sold?
   • Futures Markets for Crude Oil
   • What Influences the Laid-in Cost of Crude Oil
      to a Refiner?
   • Crude Oil Trading Scenarios
   • Intermediate Feedstocks

2. Petroleum Product Markets
   • What are the Major Petroleum Products?
   • Product Supply and Demand Overview
   • How are Petroleum Products Bought or Sold?
   • Product Futures Markets
   • Product Trading Scenarios

3. Simplified Refinery Configurations
   • Topping / Reforming
   • Cracking
   • Coking
   • Complex

4. Crude Oil Quality and Refinery Configurations
   • Why are Different Crude Oil Types Appropriate
     for Different Refinery Configurations?
       + Light / Heavy
       + Sweet / Sour
       + Paraffinic / Naphthenic
   • Crude Oil Selection Methods

5. How Refinery Configuration Affects Profitability
   • Effect of Refinery Configuration on
     Upgrading Margins
      + Topping / Reforming
      + Cracking
      + Coking
      + Complex

6. Interaction of Product Markets and Refinery
   Profitability
   • End User Markets
   • Niche Markets
   • Specialty Product Markets
   • Bulk Markets
   • Impact of Product Specifications

7. Trends in Long-Term Refinery Profitability
   • Historical Margin Trends
   • Effects of Future Gasoline and Distillate Specs

8. Open Forum


PROGRAM SPEAKERS

Larry Clevenger is an associate principal consultant with KBC Advanced Technologies, Inc.
in Houston, Texas. He has over 40 years of experience in refinery planning, blending, trading
and brokering. Prior to retirement Larry was executive vice president of KBC Advanced
Technologies, Inc., responsible for all consultancy operations worldwide. Before joining KBC
in 1992, he held numerous executive and management positions with Indian Refining and
Marketing, MG Refining and Marketing, Tristar Energy, Transworld Oil and Exxon Company
USA. He holds a B.S. degree in Civil Engineering from the University of Texas.

Gerry. Hickman is an associate principal consultant with KBC Advanced Technologies, Inc. in
Parsippany, New Jersey. He has over 38 years of experience in the petroleum refining
industry. Prior to retirement Gerry was vice president and chief operating officer of KBC
Advanced Technologies, Inc. Before joining KBC, he was vice president of refining for
Longview Refining, and had held numerous management and technical supervisory positions
with Chevron and Gulf Oil. Gerry holds a B.S. degree in Chemical Engineering from the
University of South Carolina and has completed advanced studies at Lamar University and the
University of Toledo.

								
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