Written by: Duncan Micklem
The global refining industry is constantly evolving and responding to new crude supplies and sources, more stringent fuel/product specifications, perpetually changing demand patterns and other global and regional trends. Increased competition from large, efficient refineries is forcing small- to mid-sized refiners to rethink their strategies to remain competitive.
Aggressive optimization programs are a very attractive strategy. Marginal refiners can use advanced simulation models and software to secure returns demanded by their stakeholders. These tools and methods are low-risk approaches to value creation. With an appropriate understanding of where and how to optimize assets, these benefits can be sustained.
Rapidly evolving technologies, regulations and geopolitics will continue to add more risk to large capital projects. Only a few refiners have the advantage and long-term fundamentals, resources and capabilities to justify and successfully implement new major investments.
For the rest of the refining industry, achieving or exceeding market returns requires bold action. The best option for boosting performance is an aggressive asset optimization program.