Petroleum Refining

Petroleum Refining

Brief Excerpt from Industry Overview Chapter:

Companies in this industry refine crude oil to produce fuel and other products. Major companies include Chevron, Exxon Mobil, and Valero (all headquartered in the US); BP (the UK); and Royal Dutch Shell (the Netherlands).

COMPETITIVE LANDSCAPE

Demand is driven by consumption of gas and diesel fuel. The profitability of refineries depends on feedstock prices, efficient operations and the best mixture of products. Although there are significant economies of scale in refinery operations, a small refinery can compete effectively with large ones if it's located in a favorable market area, or if it produces specialty products that are in high demand. The US industry is highly concentrated: the eight largest companies account for about 70% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products are gasoline, diesel fuel and heating oil, and jet fuel. Other products include petroleum coke, still gas (used as refinery fuel and petrochemical feedstock) and asphalt. Diesel fuel and heating oil are known in the industry as distillates.