Report highlights importance of reliability as refiners face pressure to expand capacity to meet increased demand for petroleum products
PASADENA, Texas, June 16, 2022 (GLOBE NEWSWIRE) — Pinnacle, a reliability data analytics company, released its Economics of Reliability report for the refining industry today. The report, which is the seventh installment of Pinnacle’s Economics of Reliability report series, analyzes the impact that reliability has on the refining industry.
“US refiners are reporting record profits and are also running at well above average utilization levels,” said Jeff Krimmel, Chief Strategy Officer at Pinnacle. “This breakneck pace of activity puts real strain on US refining assets. There are important political and economic constraints that will prevent meaningful capacity addition in the US. As a result, domestic refiners have even more incentive to operate as efficiently and reliably as possible.”
The report leverages data from the US Energy Information Administration (EIA) and financial reports of 19 global refiners including ExxonMobil, Shell, and Chevron. Pinnacle analysts estimate that these companies, who are primarily based in the US, spent 2% of their downstream revenue on reliability and operated at an average utilization rate of 85% in 2021. As global demand for petroleum products skyrocketed, US refiners have expanded their utilization to account for the increase in demand. As of June 2022, US refiners are achieving near 95% utilization, a level that has only been exceeded about 10% of the time since 2001.
“Based on our analysis of these downstream operators, we observed that top performers typically achieve higher utilization while strategically targeting their reliability spending,” said Jace Thurman, Market & Data Analyst at Pinnacle. “Reliable operations and assets are imperative to maximizing utilization and capturing high profit margins. These top performers likely employ data-driven reliability programs that identify the most effective use of their capital. While current market conditions have translated to better earnings for downstream operators, optimizing reliability programs and spending will become a critical strategy for refiners to protect increased profit margins.”
For more information or to read the full report, visit pinnaclereliability.com.
Headquartered in Pasadena, Texas, Pinnacle is exclusively focused on helping industrial facilities in the oil and gas, chemical, mining, and water and wastewater industries better leverage their data to improve reliability performance, resulting in increased production, optimized reliability and maintenance spend, and improved process safety and environmental impact. Pinnacle is privately held and has been consistently recognized for its growth by Inc. Magazine, the Houston Business Journal, and more. For more information, visit pinnaclereliability.com.
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