Everyone who has a car knows what means to have the fuel reserve light turned on … we have to replenish the fuel tank. But … what do we know about the supply chain that black gold follows? In this post I would like to describe in a general way the logistics required by the oil industry, since it is a sector that I am passionate about and in which I have had the luck to work in the oil refinery located in Castellón de la Plana.
The first thing I can say is that the oil industry is divided into three large sectors that keep the flow of fuel and materials constant.
The first sector is the exploration and extraction: UPSTREAM. This includes the search for potential underground and submarine deposits of crude oil and natural gas. The next step is the drilling of the exploratory wells to later drill and exploit the wells that carry the crude oil or natural gas to the surface.
Another sector is known as MIDSTREAM. This includes the transport and storage of crude oil before refining and processing it into fuels and elements that have become indispensable in our day-to-day life. Depending on the product and the distances, the transport options (to transfer the material to the refining center or to the port of embarkation for its export) can be through trucks or tank wagons, tankers or pipelines. After being driven to the plant it is stored in large tanks.
We all know that the storage of oil and natural gas is necessary to balance the fluctuations between supply and demand, and guarantee the supply of energy products in times of political and economic uncertainty.
The refining, commercialization and distribution of products derived from crude oil and natural gas constitutes the DOWNSTREAM. In the refineries, the crude undergoes a process of physical separation and then chemical processes to extract the different components that form it. The extracted derivates are fuels and petrochemicals. Thus, consumers receive products such as gasoline, kerosene, diesel, lubricants, asphalt, natural gas and liquefied gas, synthetic rubber, fertilizers, preservatives, packaging and plastics to make countless products that are part of our daily life (as pharmaceutical and orthoprosthetic products).
I can tell you that in Castellón, next to the refinery there is a petrochemical industry that uses as raw material materials obtained from the processing of oil in the BP refinery.
The following diagram is a summary of the value chain that the crude oil follows, from its extraction, transport and storage, to its refining and subsequent distribution.
Finally, comment that although the largest oil production is located in the Middle East, the largest refining capacity is located in Europe, Asia and North America, so the logistics involved in this sector is a real madness.
If you want to expand this information you can see the following video.