Petroleum Refining

About 145 petroleum refineries operate in the US, owned by 60 companies, with combined annual revenue of $160 billion. Large refiners include Valero, ConocoPhillips, ExxonMobil, BP, and Chevron. Annual revenue fluctuates substantially because of the shifting price of crude oil. The industry is highly concentrated: the five largest refiners hold about 50 percent of all US refining capacity.

COMPETITIVE LANDSCAPE

Demand, largely driven by US consumption of gas and diesel fuel, has been relatively flat in recent years. The profitability of refineries depends on 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 industry is highly automated: average annual revenue per worker is over $3 million.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products are gas, 60 percent by volume; diesel fuel, 20 percent; propane, 7 percent; heating oil, 5 percent; and jet fuel, 3 percent. Diesel fuel and heating oil are jointly called "distillates." A refinery uses crude oil as raw material. The output of a particular refinery depends on the grade of crude oil it uses and the downstream processing operations it has installed.

Refineries come in many different sizes, from 5,000 barrels per calendar day (BBL/CD) of distillation capacity up to 500,000. A typical refinery has a capacity ...