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The global oil market has gone through a tumultuous period in 2008-2009 due to the Great Recession in the US and part of Europe, that led to falling energy demand and low refinery utilization rates among refineries in OECD nations. US refiners processing Mars and Maya oils reported negative coking margins in Sept-Dec 2009. Since early 2010, profitability of processing opportunity crudes has gradually improved with coking margins exceeding $2.5/bbl and $7.0/bbl when handling Mars and Maya in US PADD 3 region in early 2011, respectively.
Meanwhile, global crude oil quality continues to deteriorate as developing nations such as China, India, and Brazil are driving up demand for lighter crudes to satisfy robust consumption of transportation fuels at home. Opportunity crudes have become feedstocks of choice for many well-equipped refineries as the prices of lighter crudes continue to escalate. The supply and demand imbalance seen in high quality crudes is expected to persist for many years to come because the motor vehicle market in the emerging countries is still at its infancy. Biofuels or renewable fuels are unlikely to satisfy the insatiable thirst for fuels in the world. Therefore, increasing quantities of low-quality crudes are being processed in refineries worldwide.
On the other hand, the concerns over CO2 emissions—that are believed to contribute to global warming—have cast a dark cloud over the future of heavy, high sulfur grades. These crudes have a larger carbon footprint than that of light sweet crudes on a life-cycle analysis basis. To sustain the province’s leading business in oilsands, the Albertan government has commissioned numerous studies to evaluate methods that will reduce CO2 emissions during production; for example using the steam-assisted gravity drainage (SAGD) process for oilsands extraction. In-situ upgrading is also being studied, and carbon capture and storage (CCS), considered one of the most feasible options to mitigate overall GHG emissions, is garnering significant interest as well.
In terms of processing opportunity crudes, there are a number of projects underway for heavy oil/bitumen upgrading in Canada and Venezuela that are at various phases of planning, engineering, and construction. Additionally, refiners around the world are undertaking residue processing projects to take advantage of the lower costs of opportunity crudes.
