Optimizing Chevron’s Refineries

Ted Kutz (), Mark Davis (), Robert Creek (), Nick Kenaston (), Craig Stenstrom () and Margery Connor ()
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Ted Kutz: Technical Solutions, Chevron Downstream, Richmond, California 94801
Mark Davis: Value Chain Optimization, Chevron Downstream, Houston, Texas 77002
Robert Creek: Process Engineering, Chevron Energy Technology Company, Richmond, California 94801
Nick Kenaston: Process Engineering, Chevron Energy Technology Company, Richmond, California 94801
Craig Stenstrom: Supply and Trading IT, Chevron Gas and Midstream, Richmond, California 94801
Margery Connor: Chevron Information Technology Company, San Ramon, California 94583

Interfaces, 2014, vol. 44, issue 1, 39-54

Abstract: Chevron has developed a software modeling tool that its seven company-owned refineries use to select the most profitable raw materials, evaluate product options, optimize refinery processes, and promote efficient capital investments. The tool is a linear program with distributive recursion mathematics, which Chevron uses in operations and strategic planning. Over the past 30-plus years, the company has continually improved this application of operations research, and its complementary and supporting systems and business processes, and they are now deeply embedded into the fabric of Chevron’s downstream business of reliably and efficiently supplying products to our customers. The value that these efforts bring to Chevron now approaches $1 billion annually. We estimate that the cumulative value to Chevron over the past three decades is approximately $10 billion.

Keywords: petroleum industry; oil refinery management; decision support; optimization; distributive recursion linear programming; successive linear programming; pooling problem (search for similar items in EconPapers)
Date: 2014
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