Case Study Solutions

Topics: Petroleum, Oil refinery, Natural gas Pages: 4 (730 words) Published: February 16, 2013
Ushering; in a RetaU Revolution


Before gening into the Case, it will be useful for students to understand the oil industry. Hence, a Primer is provided.

The Origin of Oil

Oil I is said to be formed from the remains of animals and plants that lived several millions of years ago in a marine environment. Over several thousands, even millions, of years, these remains were slowly covered by layers of sand and silt deposited by natural elements like the wind and rivers. Extreme heat and pressure played a major role in aiding these remains transform themselves into what today has become black gold, that is, crude oil (Figure 2.1). The origin of crude oil is indicated by the word 'petroleum' itself. The word petra means 'rock'; hence, petroleum literally means 'rock oil'.


Tiny sea plants and animals died and were buried on the ocean floor. Over time. they were covered by layers of silt and sand. Over millions of years, the remains were buried deeper and deeper. The enormous heat and pressure turned them into oil and gas. Today. we drill down through layers of sand. silt. and rock to reach the rock formations that contain oil and gas deposits.

Figure 2.1 Petroleum and Natural Gas Formation


The Petroleum Value Chain

The petroleum business comprises three broad segments:

o The 'upstream segment' comprises exploration for and production of crude oil. oThe so-called 'midstream segment' comprises the refining of crude oil and its transportation. Refining involves the conversion of crude oil into usable products such as petrol, diesel, kerosene, liquefied petroleum gas (LPG), naphtha and aviation turbine fuel (ATF); and the transportation of crude oil can be done through...
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