UNITED NATIONS
ECONOMIC AND SOCIAL COUNCIL
Distr.
LIMITED
E/CN.14/EP/INF/17
.3' December 1973 Original . :■ENGLISH
ECONOMIC COMMISSION FOR AFRICA
Regional Conference on petroleum Industry and
■ Manpower Requirements in the field of Hydrocarbons Tripoli, 2-12 February 1974
APPROACH "TO REFINING TECHNOLOGY IN DEVELOPING COUNTRIES IN AFRICA AND ASIA ■
Document prepared by Dr. H,K, Joshi, Deputy General
Manager, Indian Oil Corporation Ltd., (Refineries &
pipelines Division) Janpath,.New Delhi - 1 and
Dr MvG. [Krishna, Director, Indian institute of Petro leum, Dehradun. (Indian delegation)
lv/; INTRODUCTION AND .SCOPE
. l.l Africa and Asia are vast; areas comprising a large ■ number: of countries. The size of the ..petroleum industry as well as the state of development of petroleum and related technology in :these countries differ widely. .However, if we exclude deve loped countries like Japan, several of the other countries would have many: features-in common with respect to their approach_to^
the petroleum refining technology. Further, an important distinc tion among developing countries themselves, has become prominent;
in recent years in regard to petroleum industry. This concerns the interests in oil of the petroleum exporting and petroleum importing developing countries ,both categories depending on
petroleum as a vital resource for national developments, but from
the different viewpoints. This paper attempts to discuss these aspects from the viewpoint of importing developing countriesparticularly in the light of experience of the development of
petroleum industry in India. . .
1.2 petroleum refining technology consists of many disciplines It includes market surveys, preparation of feasibility and detailed project reports, negotiations for obtaining necessary knowhow, de
sign and engineering, decisions with respect to financing in both
local currency and hard currency, construction of the refinery
E/CN.14/EP/INF/17
Page 2
followed by its operation and maintenancer and training of manpower for development of specialised skillso The qualities of crudes available, specifications of products required, and their usage have also to be studied in detail. All the above work covers
several disciplines of science and technologyj including chemistry, chemical engineering, mechanical engineering as well as electrical and civil engineeringo
l->3 Thus, the approach to the petroleum refining technology will depend very much upon the local market pattern and state of development of petroleum industry and technology as well as that of other supporting disciplines referred to earlier. This is so even if we exclude highly developed countries like Japan. The approach would also depend on the organizational set-up of the petroleum industry. For example if a country has ten refineries but each has separate ownership it will be more difficult to
develop indigenous technology in any one of the disciplines men tioned earlier due to inability to take advantage of size,.
Availability of adequate indigenous material and financial resources is another important controlling factor. Aia these aspects will be discussed in the paper,
2, SELF-SUFFICIENCY_VERSUS SELF-RELIANCE
It is natural that the object of development of petroleum refining technology in' each country would ideally be to achieve self-sufficiency in :this field. . However, it must be recognized that even in well developed countries, it is not most economical to be completely self-sufficient. If self-sufficiencey is over- stressed then the resources available to the country could be . frittered away in many directions. The resources available to' any of these disciplines would not be sufficient to develop all ofi them properly, resulting in a partial development in many
disciplines without ability to build any one of them sufficiently
to be really self-reliant. It isf therefore, important for a country to fully survey the resources, available to it in terms of manpower finances, state of development of science and
technology m general, raw materials, etc., and on the basis of this survey to decide upon a plan of action which is both realistic as well as challenging. The concept of self-reliance and approaches towards it needs greater emphasis in developing countries,
2.1- Foreign Assistance . ■ .
-. For a country that has no refining industry of its own, a beginning can only be made with outside help, in almost all . i: ■ aspects of the industry. A question naturally arises* as to whose help should be obtained and what should be the terms under which
.this- help ris obtained. ...
3/CN.14/EP/INF/17
Page 3
The following alternatives are available for consideration:
(a). .Allowing an outside petroleum company to own and
'■■'■■"■■■"V build'the refinery without any--", special conditions-:./ ' ■•
attached; ■_■ ■ ' '■■■'-' ;. •/ ■".■i. ■■ ■ ■■■::■; r^
-■vV(bj Same as above, but inclusive, of^several guarantees' ■: .
■-1"1 for protection to the-company as well .as'certain /
. restraints; ' '■''." ■•■'•r'~] ' ' - -::::" ■
■' *'{<:) Ownership by the Government ofi the country with f r' . collaboration from an ■du-tsi-de^'country or an outside- :
'■; oil' company or a'contracting-^farm that specialises- . . : in "the:;desigh: and; construction.' of petroleum refineries.
The ■'services in :the last cases! must cover all.-aspects . starting1 from a market' survey;;
(d) '■' Ownership- by private-citizens of the.-country with any one''of the arrangements mentioned under it an (c);
(e) A-combination of the above. . .
"'"■""Each one of the arrangements' mentioned above, v/ould ha.ve advantages and disadvantages"and each one. of these must be-.:..
weighed taking into consideration the peculiar situation .
obtaining in'/the- country. For- examplev.a country fully wedded,
to a private!-:e"e"bnomy may not -feel it desirable to go in'\'£or■.■an'--
alternate, consisting of ownership by -the Government. -.Similar arguments apply to the other alternates mentioned above. The general, .political and economic-climate may also have vanimportant bearing -o'n the countries or commercial organizations
with whom collaboration is sought. Other aspects like cduintry's
trade relationships may have a major bearing on the selection of a collaboration- arrangement made..- -It"'is, therefore, not technology alone which ultimately governs the decisions taken.
Ano'th'er major-cbriitraint is- the: foreign' exchange availability which-will determine"the type of arrangement arrived ato
2.2 -- Involvement of nationals
- Although several alternative'arrangements .for obtaining outside help are mentioned "ab'ove, certain terms should ■ be • common
to all of above arrangements. According to us, the most
important terms that must be agreed between the country and the outside party from whom the.assi-stanGer.is soughtf is the close : and day-to-day association-of ■'■the''nationals of tne country in all aspects of the project, right from the beginning„ It should also specify that the training of the nationals, both formal and on the job, is the most important responsibility, that the
oustide party must carry.
E/CN.14/EP/INF/17
Page 4
■ The success with which this responsibility is carried out can be judged by the direct results achieved, namely, the
percentage of the nationals employed in the whole organization and the levels to which they rise within a specified duration.
The duration for achieving the percentage of nationalization of services will naturally vary with the state of development of science, technology and industry in the. country. But whatever the stage of development, the importance of this aspect must be Jrully recognized and effective progress in the direction of nationalization of services insisted upon. This is required, not only from the point of view of limiting the out-go of money in terms of salaries offered. The more important reason for insistence on nationalization of services is that the citizens of the country only can fully appreciate the problems of the country and also arrive at a solution which would be consistent with the conditions obtaining in the country. Similarly: this group alone would be a suitable group of employees, on whom the activities and progress of the organization can be depended upon.
In the last analysis, even if, a few of the trained nationals leave the particular organization, a major portion of them will still be available to the country although through other organi zations, namely, Government teaching institutions, research bodies, etc. This aspect of nationalization of services cannot be over-emphasized. As in case of India, insistence on the earlier nationalization of services in the foreign owned oil companies has paid rich dividends and has been the greatest . single factor in paving the way for further self-sufficiency and development in petroleum refining technology.
Equally important is the necessity to insist on the . maximum utilization of indigenously available equipment and materials.
3, STATUS OF REFINING INDUSTRY IN AFRICA AND ASIA
The: whole of African Continent consumes only about one-tenth of the consumption of petroleum products in Western Europe and
less than 20 per cent of that of one Asian country, Japan,, Similar is the consumption level in West Asia, which includes
all countries of Middle East which produce world's largest
share of petroleum. - Far East, excluding Japan, is only slightly better with consumption more than double, that of Africa.,
Table 1 .shows that there has been a steady growth of refining industry' in several African countries, leading to strike a
balance between internal consumption and refining capacity-and subsequent reduction of the import of petroleum -products',,
E/CN. 14/EP/INF/17
Page 5
Table 2 shows the latest position of refining and secondary processing plants in several African and .Asian countries. It is significant from Table 2 that cracking process has little application in African countries except in one, which is ■
indicative of the level of motor gasoline demand. Reforming,
and hydroprocessing plants are almost always .includedB showing / respectively^ the need for. octane .improvement to meet'the require ments of modern imported cars ,and. for meeting sulfur requirements following the use of high sulfur crudes. The. demand for gasoline is apparently much.higher^ in Asian developing countries;- hence- cracking operation is more though',it is only about 9 per cent of the distillation capacity in both Asia and Africa, African countriesf excluding Union of .South..Africa, have very little cracking capacity, but ■signi.fi'cantVir.efoiming and hydroprocessing capacityo: Internal social need, for improved road transport is. reflected by increasing, capacity for' asphalt manufacture.Unfortunatelys information.on demand for individual products is. scanty on many African .countries. It isr howevers generally:
known that kerosene is a major fuel in many of them for lighting;
purposes,, This state in the development is quite comparable to that in India about jtwo..decades ago. Increasing industrialization
would normally increase "the demand for fuei oil, diesel fuel,
road asphalts and.lubricants.
4. ' NEEDS OF AREAS' OF.TECHNOLOGICAL GROWTH', ...:Vr\-. ,
Now let us look..'.at "the individual disciplines of'technology- which are important" for-the growth and development of a country-Is refining industry. " .'_"'." ... '■> .
4^1 . Market. Survey .
It has been mentioned that wherever a petroleum refinery is' to be: installed in a country, the decision must be based on a detailed market'survey. Market survey is a science in itself and several standardized techniques have been developed for: this purpose. One has to consider, .for this, use. of statistics, the . end use analysis of the. products, analysis of the general economy of the country, etc. The market survey is required not only "in \ the initial stages but is a continuous process by which complete' statistics regarding market demand of petroleum products etco, must be up-dated every year. This is necessary in order to plan-
the. product pattern of the existing refining capacity, plan for - the import of balance requirements of the product, .plan for
modification/expansion of the existing.refining capacity„ etc. . It is felt that this is one. .field which is important but'is
comparatively easy to acquire. Self-sufficiency in this aspect
of the petroleum technology-is desirable and possible in a
E/CN.14/EP/INF/17
page 6
comparatively short,time. It isf therefore, recommended that a cell for "market survey" may be established and maintained even before deciding on the establishment of a refinery,, A cell like this can be attached to several organizations which may or may not be concerned'with the petroleum industry directlya In
India a major effort in this direction has been made under the aegis of the Indian Institute of Petroleum. More recently a special cell has been constituted, which includes representatives from the Ministry of Petroleum, Ministry of Finance and refining and marketing industries and other organizations v/hich study the general trends in the economy of the country«
Often0 in developing countries, precise information on
marketing of different petroleum products is not easily available.
This information, which should cover practical application of products,, forms the foundation of market intelligence for future
growtho 'it is essential that developing countries take effective
steps for the continuous collection of such market intelligence?making it mandatory for the industry to supply information.to the
Government0
4*2 Testing, research and development facilities
Testing of petroleum products is probably the first acquain tance of any country to the petroleum industry. Long before a refinery is established the country must import and market
petroleum products, and for this purpose must have testing facili ties to determine!' the quality of the products* Such tests are required for determining the excise classification the quality of the products9 its value for any sale agreements between the major importers and the exporting organization, and also for
ensuring proper quality of the products delivered to the customer by detecting adulteration,, This activity is comparatively simple and should continue to be developed in accordance with the needs of the petroleum industry. As ;.he size of the industry increases, there will be need for developing testing facilities in several organisations separately, like excise and customs individual companies or petroleum establishments, independent,laboratories.
that could serve the Government,-the customer and" b'e usaful for inter-companies disputes0
-. ■ Vhis' testing facility can be a nucleus for developing the
knowledge of petroleum technology and like the nucleus., of marketsurvey cell could be established much before the establishment
of refining facility. Normallys limited or no outside help may be necessary for establishing .such a testing centrer if. the countryalready'-has an established chemical process industry,, The testing
centre could also be mainly responsible for developing of standards of quality for the products marketed in the country.E/CN.14/EP/INF/17
Page 7
Selection of crude and a decision with respect to the quality of products to be produced generally follows the market survey in the process.of development of : a new [refinery project, The extent to which a country.'should develop-these facilities:will :depend . considerably upon: the size of petroleum industry, in the:;country.
Analysing ^nd evaluating various.alternate crudes available and determining the suitability of "chese crudes for use in the country can be a continuing process* It can be quite costly and time
consuming,, Also for a number ofucr.udes which are available in the international market, Crude Assay Books are available which give most of the details required:about the properties of the crude, Where the alternates regarding availability.of crude are limited'
the efforts in the direction of a laboratory determination of a crude assay may, not be worthwhileo However: a country which has more than, one refineries, has freedom' to buy-more than one-crudes
and possibly has oii.;fieids for. indigenous productionp this
activity assumes greater importance. . ;. :..'•
■ As -regards development of hew products, and processes, this- can only be carried out in :a country which'has or hopes to -have, -.;-.
a far-sized petroleum industry and its industry is mainly, con-^ . ■' ■ trolled by organizations within the'country.: Although research and development of new processes is a must for ;any industry that has to meet the challenge fromrits competitors a large number of count
ries and organizations cannot afford this ^luxury-excepting after a minimum required size of the industry is developed and the organizations are self-reliant.- The research and development activity, however? can have, several stages of development. In a country which has a smallervpetroleum industry,'this could be restricted to a very limited ."activity like customer service, . ■■
establishment of product specifications, new uses of commercially available products ?. etc. ,. suitable' for the country. Thus.it will - be possible to maintain1 a ^nucleus' which could, grow in size with the growth.of petroleum; [industry as a whole.
In the initial stage of the petroleum industry in India, a decision was taken to ..establish the Indian Institute of
Petroleum - an organization which covers all the three aspects mentioned.above? including a cell for the market survey and product; analysis. This organization has contributed immensely for the development of petroleum industry in India, A team of scientists working in.this .organization has always been at hand for.advising the Government on technical matters and solving, technical problems of the indigenous petroleum .industry- This laboratory was established with the collaboration of the Trench Institute of Petroleum, which had lent the services of 15 techni cal experts. This organization continues to play an important and increasing role in the petroleum and petro-chemical industries in India^
E/CN. 14/EP/INF/17
Page 8
.4.3 Process Technology .
The next step after completion of the market survey, crude assay and products specifications, is the selection of process technology that win be most suitable for the crude adopted and the production pattern desired along with the required specifica tions of the products.
In the field of the development of basic technology it must . be conceded that self-sufficiency is not possible for most
developing countries till a considerable size of the petroleum industry is developed in the country. This is so not only in the case of developing countries. There are a number of instances where highly developed countries borrow process technology from other developed countries. Development of basic technology requires long consistent efforts experience and expertise and is very costly. The experience is to be gained not only in the laboratory and pilot plant work but also depends upon the detailed feed back information on the operation of full-scale plants., Very often a new process technology when adopted by a full-scale plant results in considerable and costly modifications and further . development work which can be afforded only by companies and countries that have sufficient resources at their disposal,, It is, therefore, necessary to borrow the process technology for most developing countries.
However, it is possible to reduce the quantum of dependence by doing a;portion of the development work possibly in collabora
tion with the supplier of the technology,, For example, the
Indian Institute of Petroleum has developed a process of 'hydro- desulphurization' in collaboration with the French Institute of Petroleum, in which the basic process was developed and belonged
to the French Institute of Petroleum, The accumulation of further data with respect to effects of operating conditions on the yields, quality of products, etc., on tne particular feed stock planned to be made available in the country, were studied by the Indian Institute of Petroleum. Based on this workt detailed process designs and engineering was completed^ This reduced the depend ence on the foreign exchange outgo required for adopting the tech nology for the particular crude decided to be processed in India.
A cell like this can be very useful, at least? in some
aspects of future expansion, i.e., process evaluation, selection of optimum processes, etc.
E/CN. 14/EP/IMF/1.7
4.4 Design and Construction .:....
Supervision for design and construction will have to be obtained from an outside source at least in the initial stages of development of petroleum industry in a given country. As mentioned earlier, considerable gain can accrue to a country by
insisting on association of' the -nationals of: .the country in.
every stage of. -the detailed design and l^ter^on construction of
refining facilities. This was" done in India,*when three refineries
were built in collaboration with^Riumania and/Russia. A large , . group of engineers who were expected to man tfte various sections of the refinery later were 'sent'-to these countries, ^nd^.spent many months associating themselves with the detailed design, "arid =
engineering, of the refineries. The same was carried" out during -
the construction phase also, ■"•
The: Group was also associated with detailed and complete inspection of the refinery facilities as installed .prior to
commissioning. : During the commissioning phase also^considerable responsibility was of the Group of Indian* engineers, ■Lwho were trained abroad but the commissioning was done under fthe close supervision from■ the overseas collaborators. . ;. :
Because of the above-mentioned close association'with all aspects of the refinery, this Group of engineers was able to take over the operations and maintenance of the refinery within a short period after the start up.
This group of engineers can form the nucleus of the idesigri . . and engineering section of an operating refinery. The* training.:._
received* by'them is useful later in carrying out modifications, :\...v to the design and to improve-the performance of .the refineries, j..
They were also able to suggest changes to increase capacities and;-:, efficiency of the refineries. This gives confidence to the <■:/.
personnel in future planning also. . .
It is also desirable to utilise maximum engineering know-how and^technology available in the country during; design and con- .:
struction of the refinery- For example, inmost countries it will be .possible .to design and construct a good portion of■ civil ■ engineering-facilities indigenously which form considerable
percentage of the final cost of the refinery. It may;also be :■:
possible to obtain different types of equipment, for1-example, :. . =..
electric "motors; :pumps,- pipes, vessels, etc., from' imiigenous ■.'. . ■ sources and'these should be utilized to the maximum-extent-possible even if it means extra cost and delays. :In the long-run, only by stagesp development.-of' indigenous availability and> self-sufficiency can be achieved. The indigenous equipment and material for ■■
refineries built in early 50's in India was very-small. However,:
this increased to a high percentage of-over sixty per cent'in case., of refineries that were built in late 60's. : ■ ; . . . : .-".
E/CN. 14/EP/INF/17.
Page 10
Training of craftsmen like welders, pipe fitters, electri cians is very necessary before we start up" construction and continue later by- associating; .these people during construction
stage; . . ..;':.. :.-■ .: ■■ ■ ■ ■ ■
it is our opinion that it is easier to be self-sufficient .
in engineering aspect of the petroleum industry than in process ■
technology. For one thing, many engineering skills and know-how,
are common to other process industries as well as mechanical . ,:
industry and are essential for maintenance of plants in these
industries. Thus, these skills and knowledge have a much broader
base., and.hence the possibility of attaining greater self- .
sufficiency. What is often lacking is the availability, of; local. . contractors that can undertake small and large size jobs. Often special efforts have to be made to develop them.
As. the petroleum and associated chemical process industries develop in the country,.- it is better to have * separate engineer^
ing companies.that will undertake the.work of process design., ;..
detailed engineering, construction for different process.. :' .-. ■
industries (including a petroleum refinery). This is necessary.:for two reasons: firstly, an operating industry cannot maintain any excess engineering personnel which can be spared for new projects when they come up. Also, certain^ amount of specializa tion is required in designing and construction of chemical
process plants Only an engineering company can meet, this demand*, It is often possible to start the engineering company in collaboration with an outside1engineering company in which certain aspects of the engineering.are done locally under the guidance of the outside .company. The portion of work carried out locally can be increased step by step. Due to rapid . development.of .petroleum refining and other chemical process industries, Indiay.hasj bjeen able to develop more than one such \ engineering companies who are now in a position to undertake many phases of detailed engineering and construction with the help of purchased process know-how and. sometimes general engineering guidance. When .the three public sector; refineries were built in collaboration with Rumania1 and Russia only a small cell was
established which was called'the Central Design. Organization.
It was made responsible for expansion of .two of the refineries "
under guidance of outside experts. Its functions were very limited and mostly consisted of checking designs offered and carrying out minor modifications as required. In the construc
tion of two refineries that followed these functions;.'were. ;;.
rapidly enlarged. Most detailed engineering was carried out , ;: .-v locally; although under supervision from borrowed experts. -.-..-,;■ ■• ,.,.- Construction was also carried out to a much;:.greater extent under . own supervision although supervision .andr-gu-JLdance was obtained . from outside where necessary. Guidance vis.^of ten required from
the legai point of view; /the .guarantees being.only valid if
outside supervision is accepted.
3/CN.14/SP/INF/17
Page 11
4.5 Operation of Refineries '
It should be one of the'terms'of any agreement for construc tion of a refinery arrived at with an outside firm to train the necessary operators in their outsi-de-refineries even before the refinery in the country is builtr Some of these personnel should also be associated with the. design of., the refinery so that they are fully conversant with the philosophy and reasons for carrying out a particular design and insisting of maintaining particular operating conditions. Generally, it-is found that if the basic education.of the operating personnel is sufficient the technique of operating, a refinery or a chemical process industry is
mastered within a reasonable time by engineers in any developing country,, In order to maintain efficient operations, continuous,
efforts are required.^-.'This requires continuous test runs in the
refinery along withnecessary laboratory development work. Depend ing upon the conditions obtaining in a country this can be done■ ".partly in a refinery and partly with outside assistance from organizations like ,the: universities, research bodies, etc It is best to depend, upon the organizations, within the country for optimum results* In certain cases, consultancy services from inside organizations ;.or-'collaborations on the basis of annual fee could also be arranged. Where more than one refineries exist in a country, collaborative efforts with a. central
organization can be most economical and effective. This, however, is only possible if the ownership of the refineries will permit such a collaborative effort. '..'■■
4.6 Training :
Earlier.we have mentioned about: the training of personnel from a country when a new refinery is under construction.
However, the training must not stop at this stage. The training is not confined to initial phases. It must be a continuous
effort. .
Training of manpower for the refining industry should be deemed an integral part of the overall scheme of scientific, ..
technical and general education and of development of- proper . attitudes in each country. This, in-turn? means that, for training of adequate cadres,.-each developing country should develop adequately satisfactory indigenous base of scientific, education and vocational training at school and collegiate level.
Each country must establish a reasonably firm base of scientific, technical and general education. Training in investigational abilities, involving a measure, of R. & D. work, is as inportant as training programmes for skills. Problem-oriented R. & D.
efforts give a deep sense of involvement in real issues and training of such capabilities takes time.
E/CN..14/EP/INF/17
Page 12 _. ' . .
It is, therefore^ essential to plan training programmes at different levels and for different purposes simultaneously*
Even for those who have been in a refinery for a long period, training is necessary to bring back to them the basic ideas which ofter get lost in day-to-day operations* Training must continue at all levels, from the.lowest to the highest. There should be a separate training department manned by a senior ' . person, and controlling a separate establishment.
Training is not only meant for refreshing the knowledge but also should be planned to broaden the base of the participants,, This also gives occasion to bring together the experience of the personnel for"mutual benefit. In the latter casef it may be necessary to take the help of outside bodies for such training,, The United Nations offers training facilities for personnel of . developing countries in more-developed countries. They also, help in making available experts from developed countries to the
developing countries. Additionally, the senior management staff could be sent, abroad fo.r attending training courses offered by. .,=■
organizations like the University of. Geneva (School of Interna tional Studies). Professional bodies like American Institute of Petroleum and American Institute of Chemical Engineers also
arrange seminars on various subjects which are open to their
members,, Such memberships can be sponsored for senior management
staff. .. ■ . . ■ ■
5. ' LINES OF FUTURE DEVELOPMENTS .
The state of development of refining industry in developing countries has been referred in Tables 1 and 2 attached. Tables 3 and 4 show the average capacities of individual units and pattern of ownership. The capacity of individual units.is very small
compared to.world standards. The ownership is also fairly dispersed and a significant proportion is owned by international majors and
independents o ■ . ■ . . .''.•'■.:. ■
Under such circumstances, the best method of being increasingly self-reliant is by mutual collaboration* It is very difficult for a country.-which has only one* and comparatively small refinery to spare the financial and manpower resources for developments towards self-reliance.. Only.by a collaboration .amongst more than one
neighbouring countries* development can ..take place,
a. ■ "■. Collaboration-can -be/.in : various, phases of - the industry.
.It could be limited, to/-comparatively smaller aspects like a joint testing and ^development laboratory' .-.a- bureau for exchange of . . information^, a combined design and engineering organization,. :etc.
The collaboration can- also extend to" a financial decision leading to a joint refinery which can'take advantage of the economy of size. It is recognized that there are many difficulties in
E/CN,14/-CP/INF/17
rage 13
developing such collaboration which are political as well as economical and technical. It is not our intent here to discuss political aspects. We have mentioned earlier about the possibi lity of building a joint refinery. Although this could result in the economies of transport of crude as well as economics of size of the refinery| it can lead to.-more uneconomic products distribution dependent upon the size" of the country involved and their geography. A detailed discussion was held on this subject during the recently held United Nations Inter-Regional Seminar on Petroleum Refining in Developing Countries* The Seminar arrived at a series of suggestions for consideration of
the Members, particularly with respect to the collaboration
between the developing countries. The following.are some of the
areas of collaboration suggested by the Seminar:(a) An Information Bureau may be created for collection, compilation and dissemination of information on all aspects of the oil industry to serve the developing countries. It is expected that this will help proper exchange, more rapid growth of petroleum sector in developing countries, promote co-operation and mutual understanding- and healthy trade relations;
(b) Co-operation for procurement of crude between crude importing countries as well as bilateral or multi lateral co-operation between crude producing and consuming countries;
.(c) Mutual discussion could be held regarding the terms between a developing country and other countries on setting up.refineries. It was also mentioned in the Seminar that the United Nations could provide assist ance to developing countries in several technical
aspects, training of personnel, guidance on the trends in the energy situationf role of financing institutionsj guidance on exploration for oil and gas' development of scientific, technological and educational base in the developing countries9 etc.
The collaboration could also be extended to agreed fields of specialization, for example 'f a testing research and development
laboratory could be located in. one country jointly by two or three countries; whereas the engineering and process development efforts could be located in another country. The collaboration could include specialization in the manufacture of certain
classes of equipment in individual .countries from amongst the
developing countries,. The other countries should as far as possible give a preference to purchase of equipment from other developing countries as a part of this collaboration effort* This will in the long run not only lead to a reduction in the foreign exchange requirement but also result in increasing self-sufficiency.
E/CN c 14/EP/X NF/17
Page 14
A mention has.been made earlier about the small size■of the refining industry in many developing countries. It is-"the '■'■ . general feeling that a "small size of any refining unit■-d'arH-be""
extremely uneconomical and, therefore) economically hot viable^
Although this is generally true). there are many examples ■:wh!e¥e"j ■-■;'■••
small units are able to hold their own in competition v/ith -'Xafge-
scale units. This is often made possible due to the various'1 ■ special factors. In India a refinery with a capacity of only^ -:':' 0.25 million ton/year was- successfully operating till recently.Its capacity has subsequently been increased to 0.5 million ton/'
year,, Even with this increased capacity) it is relatively small*"in size compared to many other refineries in India, it continues to be commercially successful because of its special location, availability of crude in the neighbourhood and ability to produce large number of speciality products which utilize the properties of the crude to the fullest possible extent* Even in USA) until as late as the 196O's" as many as 30 ■'small refineries were operat ing with capacities below half million ■ ton/year - again
possibly because of some' special conditions as mentioned above.
It is) therefore) felt:possible' particularly because of the
governmental supports that would be available) that smallerrefineries could successfully be built in many locations by
taking advantage of the special conditions obtaining in thecountry* The refinery could possibly be linked to small resources of crude which would not ordinarily find easy acceptance from a large refinery. Several companies have developed special design philosophies which are adoptable for comparatively smaller units.
There are examples of shops-fabricated complete refineries
transported and assembled at the refinery location with consider able economic advantage.
6. .CONCLUSION .
The approach to refining technology in developing countries in Africa and Asia will necessarily vary■from country to country depending upon its state of development of petroleum industry as well as the general scientific and technological base of that country. There is no doubt .that most developing countries will have to take outside help for' development of their petroleum technology. Much) however) will depend upon the terms under which this help is ;fcakeh. The ultimate goal of the" developing
country would be self-reliah'ce. With this goal in mind)
maximum, stress should be laid on training of .its own nationals
in. all aspects of the petroleum technology) starting from a.point even before, the decision on setting up of a refinery is taken;. Although developing .countries cannot aspire to be
completely self-sufficient, :the-paper ppihts out several areas '
E/CN.14/EP/INF/17
Page 15
where a modest beginning can be made and technical cells
established to retain abreast of.the petroleum technology* This will go a long way in ensuring that an outside party will not
take an undue advantage in any collaborative effort.
It is most important that all the developing countries should collaborate with each other ;;in as many aspects of petroleum and related technology as possible. The state of development of
technology and economy in the developing countries being comple mentary j this is a most important step that the developing
countries can: take for mutuap. benefit* The paper points out cer tain areas where such collaborative efforts may;be possible.
Although it is agreed that larger plants are more economical than smaller plantst this need not unduly worry the developing countries. There have been many examples were special design philosophies have been developed to ;suit small plants. By judicious selection of the source of crudej location of the
refinery^ product pattern^ etc.j the disadvantages of small sizes can be minimized.
^^^E?^
1950I9601965 1971Refinery Cons-amp- ReJ-^eryH&nsum^ Refinery Uonsum'p- ^ Capacity tion Capacity tion.. .Capacity ■ tion Capacity tion" E
(end year)(end year)(end year) (end year), Egypt Ethiopia Kenya Malagasy Mozambique Rhodesia SouthAfrica Sudan Tanzania Others Total RefineryCapacity aspercentof consumption
4180 *93
2
48V
206/25
104 2 14 3 11a
74 ^
9■I5
166 44 12 20 111 20
128- 3 19 4 6 15 12.7 11 7 20
70 14 ■51 14 17 n.o. 251 20 17 43152 225 2852
323 110
34045T 105" *Lessthan500b/d
a/ Federation of Rhodesia and
Nyasalandn.o.Notinoperation Includedin.-"others" Tanganyika_d/Estimated
113 10 29 7 9 n.o. 194 28 13 28 43T
p]
Table.2:RefiningpatterninsomecountriesinAfricaandAsia SI. No.■ 1. 2. 3. 4. 5. '6.
' 7-
8. 9. 10. 11. 12. 13. 14. 15. 16. 17- 18. 19. 20. 21. 22. 23.Co-un.try Africa Algeria Angola(incl.Cabinda) Congo-Brazzaville Dahomey Egypt Ethiopia Gabon Ghana IvoryCoast Kenya Liberia Libya Malagassy Morocco Mozambique Nigeria Senegal SierraLeone Sudan Tanzania Tunisia UnionofSouthAfrica Zaire TotalAfrica
Number ofRe fineries 3 2 - — 2 1 1 1 1 1 1 5 1 2 1 1 1 1 1 1 1 5 1 •■34
RefiningCapacity January1, Crude Distil- .lation 60.7 16,C - — 98.5 14.8 17-0 26.6 24.4 48.0 12.5 17.4 14o6 58O6 17-0 60,0 12.0 10c.0
20.0 16.8 21,4 242.6 16O2 825cl
Crack ing __ - - - 7.0 — - - — - - "3-6 - - - — — — — 66.1 — 76.7
(1,000b/d) 1973 Reform ing 14.5 1.9 — — — 2.0 2,0 6.2 2.8 4.0 2,0 2.0 2.3 7-6 2.5 5.7 2.0 - 2.0 ..4,2■■ 3.0 46.6 2.9 -116-.-2■-
■.K- 3. 4. 3. 16. 1. "2. 5. 1. 2. 2. 9. 129. .4, 201<
'■ ■.' P.: — 8/. — — Un 3 0 — 2 0■ 0 9 2 ,2 ■5■' — ,0 Un ,0 ,0- - .4 ,8
Other Processes — 0,95(A) — — known 0.44(A) — — - — — 0/3(A) — — 1.0(A) — — known — ......_ 3c8(A) 4.6(Poly.) 11*09
\ 0 H eg JDH HH H.P.=Hydroprocessing(A)=Asphalt(Poly.)=Polymerization Source:TheOil8cGasJournal,December25.1972,p«83
Table2:RefiningpatterninsomecountriesinAfricaandAsia(Cont'd) SI. No.Country RefiningCapacity(1,000 "'Januaryl,1973 NumberCrude ofRe fineriesDistil lationCrack ingReform ingH.P.Others
CQO fD2 H a: --0
Asia-pacific 1.Bangladesh 2.Brunei-Malaysia 3.Burma■ 4.Cambodia 5..SriLanka 6.Guam:
7. ■ 'India .
8.Indonesia 9.JCorea,South 10.NewZealand 11,Pakistan 12,Phillipihes 13.Singapore 14-Taiv/an 15.Thailand'1 3 2 1 1 1 10
30.6 123.2 25.3 12.5 37.4 29.5 489.1 424.0 430.0. 54.0 80.5 276.3 390.2 199.0 155.8
1.6 9.0 82.3 49.5 7.5- 25,9 18.1 30.0
1.6 5.7 1.8 2.5 21.8 16.0 26.0 18.0 2.5 41.9 19.4 20.8 23.8
3.5 Notknown 5.9 14.6 55.9 49.5 37.0 22.6 101.8 134.4 22.6 77.7
1..0'(A)
23.5 96.3
>A
2.65A)
2.40A)
4,1A)
A14.9 1.90 A0.8. 04.4 A6.8 A2.8 1.4o A5.1 0.2(0 Asia-PacificTSTotal28fi61."45
,757.4223.9201c525.5 i5 106.
5 3
[a) (o\
H.p.=Hydroprocessing(A)=Asphalt(0)=Others Source:TheOil&GasJournal.December25,1972pp82E/CN.J.4/EP/INF/17
Page 19
Table 3 : Ownership of refining capacity -
percentage of jrfeilvonai total
1939 1951 I960 1971
(est.)
Majors Nil Nil 29 41
Independents 100 96 69 31
State Nil 4 2 28
Table 4 : Number and average size of refineries in Africa
1951 1971
Number 2 27
Total capacity a/ 23 830
000 b/d
Average capacity 12 31
000 b/d
a/ At the end year.
