Strategic and Tactical Crude Oil Supply Chain: Mathematical Programming Models

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Strategic and Tactical Crude Oil Supply Chain: Mathematical Programming Models Strategic and Tactical Crude Oil Supply Chain: Mathematical Programming Models Genehmigte Dissertation zur Erlangung des akademischen Grades eines Doktors der Wirtschaftswissenschaften (doctor rerum politicarum) an der Fakultät für Wirtschaftswissenschaften des Karlsruher Instituts für Technologie (KIT) von Hadi Sahebishahemabadi Tag der mündlichen Prüfung: 05.12.2013 Erstgutachter: Prof. Dr. Stefan Nickel Zweitgutachter: Prof. Dr. rer. pol. Frank Schultmann Acknowledgements For three years and eight months I have been doing on my doctoral research at Karlsruhe Institute of Technology. This research was funded by Ministry of Science, Research, and Technology of Iran and Iranian University of Science and Technology, both of which are gratefully appreciated for their sponsoring. After one and a half year, I went to Tilburg University (TiU) and stayed there four months. Karlsruhe House of Young Scientists (KHYS) partially subsidize my travel and living expenses for this research stay abroad at the TiU. I would like to express my gratitude to both of them, KHYS and TiU, for their support and hospitality. During writing my doctoral thesis, I have been very fortunate to have invaluable support and constructive feedback from numerous people. Firstly, I would like to thank my supervisor Professor Stefan Nickel for his constructive comments and his indefatigable attitude in the entire process. It was an honor for me to work with Pro- fessor Nickel. He also offered me the opportunity to pursue my PhD at the KIT, and hence I cannot thank him enough. Secondly, I am largely indebted to Professor Ash- ayeri, my research adviser when I was at the TiU. He taught me how to find the right research avenues, how to write academic papers, how to be more self-confident about my research, and how to achieve success in my research life. Without help, guide, friendship, and contagious enthusiasm of both, Professors Nickel and Ashay- eri, this work would have been of a much lower standard. Thirdly, I wish to express my gratitude to Professors Francisco Saldanha-da-Gama, Diethard Pallaschke, and Kurt Jørnsten as well as Drs. Ebrahim Teimoury, Jörg Kalcsics, Sibel Alumur Alevfor, and Hans-Peter Ziegler for their valuable comments on my manuscript and for their thoughtful advice. Finally, I would like to express my appreciation to the other members of my thesis committee, Professors Martin Klarmann, Frank Schult- mann, and Oliver Stein for taking the time to quickly read my bulky thesis. This thesis greatly benefited from their comments. A second group of people I would like to express my gratitude to them are my friends and colleagues in Karlsruhe. It is not possible to list all the friends, acquaintances, and colleagues of mine in there. I was lucky enough at DOL to work with so many nice and knowledgeable colleagues. I thank all member of DOL specially Alexander, Anne, Brita, Eric, Ines, Fabian and Melanie for their friendly support and their help- ful comments and feedbacks in improving my thesis. Also, I am thankful to Marliese Amann for her kind help and support during this years in Karlsruhe. I also wish to express my appreciation to my friends; Sayed Bagher, Anees ul Mehdi and Farzaad, who I shared many happy moments and some sad ones with them. Finally, and most importantly, I would like to thank my family. My deepest gratitude goes out to my wife for her unconditional love, understanding and support in both difficult and joy- able moments. Then, I would like to thankfully express my gratitude to my father and my mother for always encouraging and supporting me, and for providing the opportunity for me to achieve my goals in my entire life. Karlsruhe, October 2013 Eidesstattliche Erklärung Ich versichere hiermit wahrheitsgemäß, die Arbeit selbständig angefertigt, alle benutzten Hilfsmittel vollständig und genau angegeben und alles kenntlich gemacht zu haben, was aus Arbeiten anderer unverändert oder mit Abänderung entnommen wurde. Datum Name October, 2013 Hadi Sahebishahemabadi i 1 Contents Preface ....................................................................................................... vii Logistics .............................................................................................................. viii Supply Chain ......................................................................................................... x Purpose of this Thesis ......................................................................................... xii Methods .............................................................................................................. xiii Thesis Outline .................................................................................................... xiv 1 An Introduction to the Crude Oil Industry ........................................... 1 1.1 Crude Oil Industry’s Role .......................................................................... 2 1.2 Crude Oil Industry’s Segments .................................................................. 3 1.3 Offshore Vs. Onshore ................................................................................ 4 1.3.1 Onshore .................................................................................................. 5 1.3.2 Offshore .................................................................................................. 5 1.4 Crude Oil Industry's Entities ..................................................................... 8 1.4.1 Reservoir ................................................................................................ 8 1.4.2 Crude Oil Wellhead .............................................................................. 12 1.4.3 Manifold and Gathering Pipeline ...........................................................13 1.4.4 Separator ................................................................................................13 1.4.5 Storage Tank ......................................................................................... 14 1.4.6 Pipeline .................................................................................................. 16 1.4.7 Oil Tanker ............................................................................................. 16 1.4.8 Sea Port Terminal ................................................................................. 17 1.4.9 Refinery ................................................................................................. 17 ii Contents 1.4.10 Petrochemical Plant.............................................................................. 17 1.4.11 Customer ............................................................................................... 18 1.5 Crude Oil Industry’s Functions ............................................................... 20 1.5.1 Exploration ...........................................................................................20 1.5.2 Appraisal ............................................................................................... 22 1.5.3 Discovery .............................................................................................. 22 1.5.4 Reservoir Development ......................................................................... 22 1.5.5 Production ............................................................................................ 24 1.5.6 Abandonment ....................................................................................... 25 1.5.7 Separation .............................................................................................26 1.5.8 Transportation ......................................................................................26 1.5.9 Storing ................................................................................................... 27 1.5.10 Metering ................................................................................................ 27 1.5.11 Transformation .....................................................................................28 1.5.12 Distribution ..........................................................................................29 1.6 Summary ................................................................................................... 29 References ............................................................................................................ 30 2 Strategic and Tactical Crude Oil Supply Chain Models ......................... - A Literature Review .......................................................................... 31 2.1 Previous Review Works ........................................................................... 33 2.1.1 Strategic and Tactical Supply Chain Reviews ...................................... 34 2.1.2 Global Supply Chain Reviews ................................................................ 35 2.1.3 Crude Oil Supply Chain Management ..................................................36 2.2 Review Methodology ................................................................................ 37 2.3 Taxonomy Framework ............................................................................. 39 iii 2.4 Supply Chain Structure ............................................................................ 41 2.5 Level of Decisions..................................................................................... 45 2.5.1 Strategic Decisions .............................................................................. 46 2.5.2 Tactical Decisions................................................................................
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