Refinery Capacity Per Day (Mbpd)
A refinery’s capacity per day is the maximum amount of crude oil designed to flow into the distillation unit of the refinery per day.
Guide to Oil & Gas Refining & Marketing Industry KPIs
This guide highlights the key performance indicators for the Oil & Gas Refining and Marketing industry and where investors should look to find an investment edge. While this guide is not a fully integrated oil & gas refining and marketing industry primer, as the market leader in granular consensus estimates data, Visible Alpha works with partners and clients to determine the key performance indicators in the industry. This guide will aid market participants in identifying industry trends and the future performance of oil & gas refining and marketing companies, by region and service type.
Industry Business Model
Refinery Business Model
Oil refinery companies buy raw crude oil from upstream or oil-producing companies and have it shipped to their refineries via pipelines, trucks, or railroads. These refineries then process the crude oil into refined products such as gasoline, diesel, jet fuel, kerosene, among others. One barrel equals 42 gallons of crude oil, which typically produces about 45 gallons of petroleum products because of refinery processing gains. The largest finished product is gasoline, at 19 gallons from each barrel of crude oil. Once processed, refiners sell these refined products to end-users, including at their own branded gas stations.
Oil refining companies generate revenue from the difference between how much they pay to buy raw crude oil versus how much they make when selling the finished refined petroleum products. Crack spread is the difference between wholesale petroleum product prices and crude oil prices. This spread fluctuates with the price of oil and with the demand for refined products.
Refinery Capacity
Refinery capacity is the maximum amount of raw crude oil that can flow into a distillation unit of a refinery.
Refinery Utilization
Refinery utilization refers to the ratio of the total amount of crude oil that runs through the distillation unit to its total capacity. When analyzing refining companies, if the crack spreads are healthy, analysts look for high utilization ratios and capacity of the company’s refineries.
Refinery Yield
Refinery yield is the percentage of finished products produced from the input of crude oil and the net input of unfinished oils. Refinery yield helps analysts assess the breakdown of petroleum products coming from crude or unfinished oils. Refiners can adjust product yields in response to changing product prices and other market conditions by varying the number of refinery process units used and the type of crude oil used.
Refinery Production
Refinery production is the actual production of refined petroleum products at a refinery.
Revenue Per Barrel
Revenue per barrel is the blended price for all petroleum products produced after refining the raw crude oil. Refinery volume (capacity, throughput, yield sold) is measured in barrels and barrels per day, where one barrel equals 42 gallons of crude oil.
Refining Margin
The main indicator of profitability for a refining company is the gross refining margin (GRM). It represents the difference between the total revenue generated from selling petroleum products refined at an oil refinery and the cost of the feedstock (input) which is primarily raw crude oil, sometimes called the product’s ‘crack’.
Refining margin excludes depreciation, hence positive refining margins may not always mean profits at a net income level. Refining margins are calculated on a per-barrel basis. They can be calculated in many ways, depending on the underlying benchmark crude oil and its yield. A barrel of crude, when processed chemically, produces a variety of end products like petrol, diesel, LPG (liquefied petroleum gas), and furnace oil, each having different applications. The price of each of these products is different. The GRM for a refinery is higher if it produces more high-value products such as LPG, petrol, and naphtha. Further, each refinery has a unique gross margin varying depending on its location, configuration, and type of crude oil processed.
A combination of factors may drive margins which include changes in oil prices, oil supply (relative to light/heavy crude oil), oil demand, refining capacity additions, maintenance/outages, inventory levels, and regulatory developments.
A proxy for short-term gross margins is simplified crack spread. Crack spreads compare the cost of crude oil inputs to the wholesale or spot prices of the outputs (excluding variable or fixed costs). One of the most well-known crack spreads is the NYMEX 3:2:1, which approximates the product yield at a refinery as: for every three barrels of crude oil, a refinery processes two barrels of gasoline and one barrel of distillate fuel. This spread is purely notional and not representative of any specific refinery or location. Below is an illustration of a 3:2:1 crack spread calculation:
- WTI Price – $82.28/bbl
- RBOB Gasoline – $2.51 per gallon
- Ultra-low Sulfur Diesel – $2.449 per gallon
- Per barrel crack spread = (42*(2*2.51+1*2.449))/3 – 82.28 = $22.286 per barrel
Gross refining margin benchmarks are the barometer of demand-supply economics, separate from the effects of operational performance. The other factor that affects the GRM is the value of “fuel & losses” oil used up in running the refinery or lost from the system.
Refinery Profitability
The spread of products is the biggest driver of refinery profitability on a cash basis with other costs being a small component of operating profits. The set-up cost for a refinery determines the non-cash cost i.e. depreciation. The add-on units in a refinery determine the set-up cost. Refineries with different types of processing units can produce very similar products but with different costs. The level of refinery operating costs is directly related to the complexity of the refining process and the size of the refinery. The size of the refinery will decide the fixed per-barrel costs. Refinery costs generally fall into one of three categories:
- Refinery Maintenance And Other Fixed Operating Costs – These costs are not affected by refinery throughput instead are affected by regional factors. These costs include manpower, maintenance, overhead, insurance, and taxes
- Refinery Processing Costs That Are Variable Costs – This includes any cost that is tied to the volume of crude that a refinery processes, in contrast to fixed costs which are not volume dependent. This includes catalysts, chemicals, utilities, power, and refinery fuel. Variable costs are higher when a refinery runs a heavy-sour crude oil.
- Overhead And Other Types Of Indirect Costs – These costs do not vary with production levels and therefore are primarily fixed costs. They include depreciation and working capital.
Oil & Gas Refining Industry Business Model
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Marketing Business Model
As with refining, marketing profitability is tracked on a margin per barrel (or per ton) basis. Additionally, there are no standard industry margins to benchmark marketing performance. Individual product margins are driven by international and regional spreads (in the wholesale market).
Spot prices, often referred to as refinery gate pricing or bulk pricing, are generally the lowest price paid for refined products. Spot purchasers (speculators, other oil companies, utilities, large industrial users, etc.) are usually responsible for product transportation beyond the refinery’s gate. A majority of refined products sold in the U.S. pass through some form of wholesale distribution network. Wholesale margins and prices vary directly with refined petroleum product spot prices. The wholesale to spot price spread comprises a transportation differential and small return on transportation assets.
Both spot and wholesale product prices tend to react almost instantaneously to crude price fluctuations whereas retail prices typically take up to eight weeks to fully absorb price spikes. During a typical driving season in the U.S., wholesale prices rise gradually from May through the middle of August, leaving retailers behind the pricing curve. On the positive side, a deceleration of summer pricing often fails to materialize at the pump until well into the fall. These observations lead to perhaps one of the best-known truisms in the downstream industry: quickly rising crude oil prices consistently erode refining margins and almost eliminate retail margins in the short term, while falling crude prices sometimes benefit refining margins but invariably expand retail spreads.
Oil & Gas Marketing Industry Business Model
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Key performance indicators (KPIs) are the most important business metrics for a particular industry. When understanding market expectations for the Oil & Gas Refining and Marketing industry, whether at a company or industry level, some KPIs to consider include:
Visible Alpha’s Standardized Industry Metrics
To understand market expectations for the Oil & Gas Refining and Marketing industry, a key information source is sell-side analyst estimate and consensus forecast data. The buy-side, sell-side, and public companies leverage this type of data to conduct competitive analysis, a type of analysis conducted by professional analysts that involves comparing standardized metrics of one company with those of similar companies. Because companies report metrics differently – and sometimes report on different metrics altogether – standardizing the key metrics for each company can be a cumbersome process.
Visible Alpha Insights includes analyst data, company data, and industry data at a level of granularity unparalleled in the market. Our industry data – Standardized Industry Metrics – enables market participants to quantify and compare market expectations for companies across 150+ industries.
Data as of January 2023
46
Global Tickers
479
Current Analyst Excel Models
305
Proprietary line items in our standardized operating metrics data
73
Contributing Brokers
526
Total Standardized Line Items
221
Proprietary Line Items In Our Standardized Financials Data
Visible Alpha offers Oil & Gas Refining and Marketing-related comp tables, comparing forecasts for key financial and operating metrics, to make it easy to quickly conduct relative analysis, whether you are interested in looking at key values for ExxonMobil, Valero Energy Corp, Total Energies, or Sinopec. Every pre-built, customizable comp table is based on region, sub-industry, or key operating metrics.
North America
- VALERO ENERGY CORP (VLO_US)
- HOLLYFRONTIER CORP (HFC_US)
- PHILLIPS 66 (PSX_US)
- MARATHON PETROLEUM CORP (MPC_US)
- Exxon Mobil Corporation (XOM)
- ROYAL DUTCH SHELL PLC (RDS_US)
- BP PLC (BP_US)
- CENOVUS ENERGY INC (CVE_US)
- Chevron Corporation (CVX)
- DELEK US HOLDINGS INC (DK_US)
- PBF ENERGY INC (PBF_US)
- SUNCOR ENERGY INC (SU_US)
- CVR Energy Inc (CVI_US)
- NGL ENERGY PARTNERS, LP (NGL_US)
- CALUMET SPECIALTY PRODUCTS PARTNERS LP (CLMT_US)
- Par Pacific Holdings Inc (PARR_US)
- PETRÓLEO BRASILEIRO SA (PBR_US)
EMEA
- TotalEnergies (TOTF_FR)
- Eni (ENI_IT)
- Tupras (TUPRS_TR)
- Saras (SRS_IT)
- Polski Koncern Naftowy Orlen SA (PKN_PL)
- Neste (NESTE_FI)
- Motor Oil (Hellas) SA (MORR_GR)
- Equinor (EQNR_NO)
- Repsol (REP_ES)
- LOTOS (LTSP_PL)
- Galp Energia (GALP_PT)
- OMV (OMVV_AT)
APAC
- Thai Oil (TOP_TH)
- Sinopec Shanghai Petrochemical Co Ltd (600688_CN)
- Indian Oil (IOC_IN)
- Bharat Petroleum (BPCL_IN)
- Hindustan Petroleum (HPCL_IN)
- Ampol Limited (ALD_AU)
- Sinopec (0386_CN)
- PetroChina (0857_CN)
- Saudi Arabian Oil Company (ARAMCO_SA)
- IRPC PCL (IRPC_TH)
- SK Innovation (096770_KR)
- Star Petroleum Refining (SPRC_TH)
- Formosa Petrochemical (6505_TW)
- Viva Energy Group Ltd (VEA_AU)
- S-Oil (010950_KR)
Global
- Murphy USA Inc (MUSA_US)
- WORLD FUEL SERVICES CORP (INT_US)
- Ultrapar (UGPA3_BR)
- Parkland Fuel Corp (PKI_CA)
- Z Energy (ZEL_NZ)
- CLEAN ENERGY FUELS CORP (CLNE_US)
- Abu Dhabi National Oil Co (ADNOCDIS_AE)
- CROSSAMERICA PARTNERS LP (CAPL_US)
- VIBRA (VBBR3_BR)
- DCC PLC (DCC_UK)
- Valvoline Inc. (VVV_US)
- SUNOCO LP (SUN_US)
- NGL ENERGY PARTNERS, LP (NGL_US)
- Cosan (CSAN3_BR)
- SUBURBAN PROPANE PARTNERS LP (SPH)
- Aemetis Inc (AMTX_US)
- Empresas Copec S.A. (COPEC_CL)
- Vivo Energy (VVO_GB)
- Renewable Energy Group Inc (REGI_US)
- Bharat Petroleum (BPCL_IN)
- Hindustan Petroleum (HPCL_IN)
- Viva Energy Group Ltd (VEA_AU)
- Ampol Limited (ALD_AU)
- Neste (NESTE_FI)
- Polski Koncern Naftowy Orlen SA (PKN_PL)
- LOTOS (LTSP_PL)
- Indian Oil (IOC_IN)
- PHILLIPS 66 (PSX_US)
- Par Pacific Holdings Inc (PARR_US)
- Saras (SRS_IT)
- DELEK US HOLDINGS INC (DK_US)
- Motor Oil (Hellas)SA (MORR_GR)
Industry KPI Terms & Definitions
Visible Alpha offers an innovative, integrated experience through real-time, granular consensus estimates and historical data created directly from the world’s leading equity analysts. Using a subset of the below KPIs, this data can help investors hone in on the key drivers of companies to uncover investment opportunities. Learn More >
Refining
Bbl
Bbl is the abbreviation for barrel(s) of crude oil. In the oil and gas industry, one oil barrel equals 42 U.S. gallons.
Bbl/d
Bbl/d (or BPD, barrels per day) is the abbreviation for barrel(s) of crude oil per day.
Standardized Measures
Standardized measures are a set of non-GAAP supplemental financial data reported by U.S. E&P companies as per the SEC regulations. They include standardized measures of discounted future cash flows from the production of proved reserves and help investors make comparisons between companies.
Refinery Capacity
A refinery’s capacity is the maximum amount of crude oil designed to flow into the distillation unit of the refinery, also known as the crude unit.
Refinery Capacity Per Day
A refinery’s capacity per day is the maximum amount of crude oil designed to flow into the distillation unit of the refinery per day.
Refinery Throughput
A refinery’s throughput is the amount of crude that goes into the refinery for processing into various products.
Refinery Throughput Per Day
A refinery’s throughput per day is the amount of crude that goes into the refinery for processing into various products per day.
Refinery Capacity Utilization (%)
Refinery capacity utilization is the ratio of the total amount of crude oil that runs through the refineries to the operable capacity of these refineries.
Refinery Yield
Refinery yield is the amount of finished product produced from the input of crude oil.
Refinery Yield Per Day
Refinery yield per day is the amount of finished product produced per day from the input of crude oil.
Gross Refining Margin (GRM)
Gross refining margin (GRM) is the difference between the total value of petroleum products coming out of a refinery and the price of the raw material, typically crude oil.
Refining Gross Profit/(Loss)
Gross profit/(loss) – Refining is the gross profit or loss incurred by a refinery for a given period.
Refining Gross Profit Per Unit
Gross profit per unit – Refining is the realized gross margin of a refining company.
Refining EBITDA
EBITDA – Refining is the EBITDA of a refining company, which is computed after deducting operating expenses.
Refining EBITDA Per Unit
EBITDA per unit – Refining is EBITDA – Refining on a per-unit basis. It is computed by dividing EBITDA – Refining by refinery throughput.
Refining Operating Income/(Loss)
Operating income/(loss) – Refining refers to the operating income or loss of a refining company, computed by subtracting depreciation and amortization expense and refining from EBITDA – Refining.
Refining Operating Income/(Loss) Per Unit
Operating income/(loss) per unit – Refining is operating income/(loss) – Refining is on a per-unit basis. It is computed by dividing operating income/(loss) by refinery throughput.
Marketing
Marketing Sales Volume
Marketing sales volume is the volume sold by a company in a given period. It can differ from refinery yield if the company wants to increase or decrease final product inventory.
Average Price Per Unit – Marketing (Per Gallons)
Refers to sales price realized from Marketing sales volume. Computed by dividing Revenue – Marketing by Marketing sales volume
Marketing Gross Profit Per Unit (Per Gallons)
Gross profit per unit – Marketing (per gallons) refers to the realized gross margin of a company from marketing finished petroleum products. It is computed by dividing gross profit by marketing sales volume.
Marketing EBITDA Per Unit (Per Gallons)
EBITDA per unit – Marketing (per gallons) is EBITDA – Marketing on a per-unit basis. It is computed by dividing EBITDA by marketing sales volume.
Marketing Operating Income/(Loss) Per Unit (Per Gallons)
Operating income/(loss) per unit – Marketing (per gallons) is on a per-unit basis. Computed by dividing Operating income/(loss) by Marketing sales volume.
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Guide to Oil & Gas Refining & Marketing Industry KPIs for Investment Professionals
This guide highlights the key performance indicators for the oil & gas refining & marketing industry and where investors should look to find an investment edge, including:
- Oil & Gas Refining & Marketing Industry Business Model & Diagram
- Key Oil & Gas Refining & Marketing Industry Metrics PLUS Visible Alpha’s Standardized Industry Metrics
- Available Comp Tables
- Industry KPI Terms & Definitions
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