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5/26/2018 Petroleum Supply Chain in the Philippines
1/45Baluyot, Cocabo, Dugan, Falcotelo, Go, Guzman, Salvador
Petroleum
Supply Chain
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Supply Chain Map
Petroleum Supply Chain
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Supply Chain Map
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Upstream Processes
Petroleum Supply Chain
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Crude Sale and Importation
Photo credit to http://files.coloribus.com/
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Crude Sale and Importation
Once crude oil has been extractedfrom the ground, it is stored in barrelsand offered up for sale in the worldmarket.
As evidenced in recent times, the
selling price of crude oil fluctuatesbased on market supply and demand,in addition to other external factors.
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Crude Sale and Importation
45.90%
25.80%
15.80%
7.70%4.80%
Philippine Oil Imports for 2012
Saudi Arabia
United Arab Emirates
Russia
Qatar
Others
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Crude Sale and Importation
The Philippines pays a great deal for fuel fromthese sources. In the first nine months of 2011
alone the Philippines spent $9.43 billion on
84.6 million barrels of oil resources from theaforementioned countries.
51.16
millionbarrelsfor rawcrude
39.36 millionbarrels for
finishedpetroleum
products such asdiesel, kerosene,LPG and lubricant
oil
84.6 millionbarrels of oil
resources
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Crude Transportation
Photo credit to http://files.coloribus.com/
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Crude Transportation
Once orders are finalized, theyare shipped to the specifiedlocation.
In the case of the Philippines,
imported oil is almost alwaysdelivered via seafaring oiltankers (each tanker can carry160-320 tons of cargo).
Like the price of oil itself, thecost of transporting oil changesrapidly depending on currentsupply and demand.
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Crude Transportation
The cost to charter an oil tanker from the MiddleEast to the Asia-Pacific region in 2007 had a widespread ranging from $7,085/day to $301,609/day.
While no specific data exists for the Philippinemarket, Japan spent around $1.61 billion onshipping costs in 2009. Since Japan spends twiceas much on oil imports, it is estimated that
Philippine shipping costs in the same period wasat around $700-$800 million mark.
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Location of Major Crude Ports
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Crude Storage
Photo credit to http://mero.cz
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Crude Storage
When the crude oil reaches the Philippines, it is storedin oil depots, which are also known as tank terminals.
Major oil depots in Luzon include the Poro Point Oil
Depot in Pampanga, which services Petron, the CaltexOil Depot in Albay, which services Chevron, and thePandacan Oil Depot, which services Chevron, Shell andPetron.
Outside of Luzon are other major oil depots, such as the
Shell Oil Depot in Leyte, the Petron oil depot in Iloiloand the Chevron oil depot in General Santos City.
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Major Oil Depots in the Philippines
(In Red)
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Crude Storage
The current trend inthe Philippines hasbeen to construct oildepots outside of
Luzon. SEAOIL, forinstance, has recentlyopened a 41 millionliter depot in the
southern province ofDavao in March of2014.
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Downstream Processes
Petroleum Supply Chain
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Refining
Photo credit to www.iraq-businessnews.com
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Refining
Tabangao, Batangas
refinery of Pilipinas Shell
Petroleum Corporation
(Capacity: 93,000
barrels/day)
Limay, Bataan refinery
of Petron Corporation
(Capacity: 188,000barrels/day)
Refineries in the Philippines
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Refining
As to the production mix in thecountry, in 2012, the
Philippines produced 164,700barrels per stream day
(MBSD), in contrast to a total
of 303,300 MBSD demanded.
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Refining
6.80%
14.30%
5.60%
8.90%
37.50%
19.00%
7.90%
Refined Oil ProductsLPG
Premium Gasoline
Regular Gasoline
Kerosene
Diesel
Fuel Oil
Miscellaenous
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Oil Refineries in Luzon (in Red)
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Product Transportation
Photo credit to http://files.coloribus.com/
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Product Transportation
Crude oil is transported by oil tankers intothe country.
The crude oil is refined in either of thetwo operating refineries.
The finished products take one of twogeneral routes depending on thedestination.
Transportation of petroleum in the Philippines
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Product Transportation
Oil depots of Chevron Philippines and Pilipinas
Shell generally take receipt of products
through barges and the 117 kilometer-long
white oil pipeline owned by First Philippine
Industrial Corporation. The commercial pipeline runs from the Shell
refinery in Tabangao to Manila, along with its
complementing black oil pipeline whichcarries bunker fuel to Sucat.
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Limay-Manila Route
T b M il R
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Tabangao-Manila Route
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Product Transportation
On the other hand, deliveries to oil depots ofthe Petron Corporation and smallindependent retailers are facilitated throughtruck tankers.
Finally, LPG follows a slightly different route inhow it is transported first by lorries todesignated refilling stations, where it ispartitioned into retail containers. Trucks then
bring these containers to independentretailers and gas stations
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Product Storage
Photo credit to http://fuelsandlubes.com
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Product Storage
Focused on justdistribution
Maintains 22 oil depotsaround the country
Owns over 30 oil depots
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Product Storage
Arguably, the most relevant oil depot to the
National Capital Region is the complex at
Pandacan, Manila. Pandacan district houses depots
of all three major oil companies, and serves as the
endpoint of the aforementioned FPIC pipeline.
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Product Storage
City of Manila orderedrelocation of PandacanOil Depot by 2026.
Move done in light ofsafety concerns
Potential impact on oilsupply in Metro Manila
if alternative locationnot developed quickly
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Product Storage
Current oil supply at 44 days worth of oil at
any given time.
35 days worth of oil in storage, 9 days worth
of oil in transit.
Government requirement at 30 days.
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Key Agencies and
Institutions
Petroleum Supply Chain
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Key Agencies and Institutions
Republic Act 8180, otherwise known as An Act
Deregulating the Downstream Oil Industry, and forOther Purposes, gives authority of oversight to
pertinent agencies of the executive branch. Their
corresponding responsibilities are listed as follows:
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Key Agencies and Institutions
Department of Energy (DOE)- monitors and publishes daily international oil
prices
- monitors manufacturing, refining and
marketing processes to ensure safety and
cleanliness
- maintains periodic schedule of national fuelinventory
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Key Agencies and Institutions
Department of Justice (DOJ)
- in conjunction with DOE, forms a
special task force to addresscomplaints of unreasonable rises
in fuel price
d
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Key Agencies and Institutions
Department of Trade and
Industry (DTI)
- in conjunction with DOE,ensures fair trade in the
subsequently deregulated
downstream oil industry
d
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Key Agencies and Institutions
Bureau of Product Standards
(BPS)
- in conjunction with DOE, setsand enforces national standards
of fuel quality
K A i d I i i
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Key Agencies and Institutions
Energy Regulatory Board (ERB)- sets wholesale prices of oil during
transition phase mandated by R.A. 8180
- was refocused on electric power afterfull deregulation and eventually
superseded by Energy Regulatory
Commission as provided for by ElectricPower Industry Reform Act of 2001
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Petroleum Issues
Petroleum Supply Chain
P t l I
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Petroleum Issues
Metro Manila relatively has an ample reserve
of oil, which can be used in the event of a
natural calamity.
However, since almost all of the Philippines
oil enters the country through seaports
located in Bataan and Batangas, a strong
enough storm can hamper ships fromunloading their supply.
P t l I
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Petroleum Issues
A natural calamity that damages seaport
infrastructure can also hamper efforts to
deliver fuel to the Philippines even long after
it has become safe for ships to sail again.
Due to the proximity of key depots and
refineries to Metro Manila, a calamity that hits
Luzon will most likely have a devastatingimpact on the fuel supply.
P t l I
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Petroleum Issues
Calamities that affect the refineries in Luzon
will hinder the Philippiness ability to refine
petroleum products which in turn affects not
only Metro Manila, but also the fuel supply inother parts of the country
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End
Petroleum Supply Chain