[Infographic] An overview on crude oil and refineries

http://klse.i3investor.com/files/my/blog/img/bl2701_crude_oil__refineries_low_res.png
Visit https://www.facebook.com/donkeystock/ or http://www.donkeystock.biz/ for more infographic.
Subscribe us  to get a free copy of e-book on Investment Guides all in infographics.

You may be interested in: 
Sector Rotation: What is sector rotation and how can you deploy the strategy.
Stock Picking Guides: A guides on what type of stock suit you the best.

There are 6 refinery plants in Malaysia and 3 refinery plants in Singapore. The current refining capacity of Malaysia plants stands at 539,000 barrels per day (bpd) and is expected to add another 300,000 bpd capacity once RAPID commence operations. The refinery in Malaysia are located in Kerteh and Kemaman in Terengganu, Sungai Udang Melaka, Pengerang Johor and 2 refinery in Port Dickson Negeri Sembilan. The current refining capacity of Singapore stands at 1,380,000 bpd. Shell operates a refinery in Pulau Bukom while Exxon Mobile and Singapore Refinery operates refinery at Jurong Island.

Crude oil undergoes a process called fractional distillation in the refinery plants. Crude oil is being heaten to crack down to shorter hydrocarbon chain under different temperature. The major by products are refinery gas, petrol, naphtha, kerosene, diesel, lubricating oil, fuel oil and bitumen.

Here are some of the factors that affects the cost of input for a refinery plant:
·         Crude quality (Transport method, local region demand and supply)
·         Energy Inputs (Electricity, steam)
·         Blending components (Gasoline, biofuel, gas, liquids)
·         Supply Chain management
·         State flexibility
·         Fiscal and regulatory regime
·         Scale and technology
·         Hedging (Feedstock, currency, products)

And here are some of the factors that affects the price of output for a refinery plant:
Fuel and energy
·         Wholesale or retail sales
·         Export or local sales
Specialties product
·         Specialist market (Marine, Aviation, Asphalt)
·         Brand Quality
Petrochemical
·         Value chain of the petrochemical
·         Export of local sales
Lubricants
·         Base oil plant
·         Blending plant and storage

However, a huge chuck of refinery profit relies on crack spread, which is the profit margin of an oil refinery made by cracking long chain hydrocarbon into shorter chain petroleum products. Some of the factors that affect crack spread includes:
·         Crude Delivery Method
·         Crude Cost
·         Refinery Efficiency
·         Dispatch Facilities
·         Refinery Location

Different type of crude oil affects the profitability of refinery plant. Here are some of the technical term you need to know before delving further
·         API Gravity is a measure of how heavy or light a petroleum liquid is compared to water. If API gravity is greater than 10, it floats on water. The greater the number, the lighter the petroleum. Heavier crude are harder to refined
·         Sulphur content: Sulphur is an impurities found in crude oil. When sulphur level is more than 0.5%, the oil is called sour. Impurities need to be removed before the sour oil can be refined into petrol
And here is a list of benchmark crude oil, unconventional oil and crude oil produced in Malaysia

Crude Name
Major Production Area
API Gravity
Sulphur Content (%)
       
Benchmark Oil



Brent Blend
North Sea
38.7
0.31
WTI Blend
US
38.7
0.45
Arabian Light
Saudi Arabia
33.4
1.8
Isthmus
Mexico
33.4
1.25
Bonny Light
Nigeria
33.4
0.16
Urals
Russia
31.7
1.35
Fateh
Dubai
31.4
2
Tapis
Malaysia
45.2
0.03
       
Unconventional Oil



Shale Oil
North Dakota
40.1-50
0.15 - 1
Oil Sand
Alberta Canada
10
5
       
Malaysia



Bintulu Condensate
Bintulu, Sarawak
69.3
0.03
Dulang
Terengganu
37.6
0.05
Kikeh
Sabah
34.9
0.11
Labuan
Labuan
32
0.09
Tapis
Terengganu
45.2
0.03
Miri
Miri, Sarawak
32.3
0.08
http://www.donkeystock.biz/