GineersNow Oil & Gas Dec2020, Safe Vaccines, Pfizer, Moderna, AstraZenica, Sinovac, covid-19

DECEMBER 2 0 2 0

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EDITOR‘S NOTE

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ll sectors of the oil and gas industry have been challenged by the COVID-19 crisis, some of which are already at risk of bankruptcy and others unlikely to survive with the current depressed levels of oil prices and margins.

Similarly, companies led by frail management teams, dominated by high-cost assets, and carrying highdebt burdens will experience worst challenges, with most of them disappearing or getting acquired.

While the majority of oil companies have already lowered their planned shortterm capital spend, they still need to consider a strategic portfolio rebalancing to provide them with the best possible chance of enduring the COVID-19 crisis and emerging more secure in the long term.

To do this, companies should curtail high-risk exploration, concentrate on low-cost assets, and strip off their highcost upstream developments, including tar sands and shale.

They should also carefully review, if not entirely cancel, new construction of plant upgrades or refining projects.

Companies need to rebalance their business via stronger positions in the petrochemicals and natural-gas value chain, all while providing stronger emissions-efficiency initiatives.

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2020 The New Normal in Oil & Gas Industry To become more sustainable and commercially attractive, all oil and gas companies should look into development expansion in the field of energy transition, electricity, and renewables, investing more in renewables and decarbonization.

These shifts apply to both international and regional oil companies, along with American drillers. However, global oilfield service companies should be the first to take the most urgent and thoughtful actions in response to the COVID-19 storm.

Since they are the most challenged by the reduced activity in the oil sector globally, they must quickly

lean towards the renewables support. To acquire new levels of efficiency in operation, all oil and gas players will also need to speed up their initiatives in automation and digitalization.

These transformations are the only ways to ensure a company’s viability in the petroleum sector for the long term.

* For any inquiries, please contact Mr. Rohan Suares Address: LG Electronics Gulf, P.O Box 61445, Dubai, U.A.E, Tel. # +971 52 710 0999, Email: rohan.suares@lge.com

CON TENTS

8 REBUILDING 2021 WITH CBK HARDWARE TOOLS & MATERIALS

20 2020 THE NEW NORMAL IN OIL & GAS INSDUSTRY

36 2020 TRENDS IN OIL & GAS

52 4 OIL SPILL TECHNOLOGIES WITH TWO GREEN THUMBS UP!

68 LATEST TRENDS IN OIL REFINARIES

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OIL OVERSUPPLY AND THE CORONAVIRUS IMPACT

116 THE PERSON:BONG FADULLON

144 AFTER COVID-19: OIL & GAS INDUSTRY

160 HOW COVID-19 DISRUPTED THE CHEMICAL INDUSTRY

176 COVID-19 GUIDANCE FOR OIL & GAS WORKERS AND EMPLOYERS

192 COVID-19 IMPACT ON OIL REFINING INDUSTRY

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THE LATESTEST TRENDS IN OIL TANK STORAGE

PETROL STATIONS AND CONVENIENT STORES DURING PANDEMIC

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F E AT U R E S T O RY

Rebuilding 2021 with CBK Hardware Tools & Materials

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he outbreak of the novel coronavirus across the globe has severely interrupted businesses in almost all of the industries. And while most companies are turning to short-term strategies to keep their operations running, they should also start to plan ahead and prepare their facilities with the right tools and materials.

Increase Productivity, Cleanliness, and Safety with Nilfisk Nilfisk offers a diverse range of solutions that directly supports your economic goals and secures value retention by shortening down cleaning times, reducing maintenance costs, and consistently increasing profits. Here are three of the most recommended Nilfisk cleaning equipment that boasts large debris trays and high quality air filters that will help in maintaining a healthy environment for your employees.

• LS160-EU 17-inch low speed polisher 1300w. Perfect for medium-duty to high-duty

applications, including indoor cleaning, and is simple, robust, and user-friendly. It automatically locks when handle is in 90-dregree vertical position.

• Scrubber BA 611 D. Has low noise level for daytime cleaning and provides OneTouch dashboard operation and detergent mixing system.

• ATTIX 30-21 PC 230V 50HZ EU. Compact

but powerful wet and dry vacuum cleaning with an ergonomic design and low noise, perfect for workers on the go.

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Improving Ventilation in the Workplace with Deton As the largest manufacturer of ventilation equipment, Deton offers products with optimized design blade, firm structure, and a smooth running supply of soft and comfortable wind. Three of the many Deton products ideal for cooling factories, mining industries, garage, and any large spaces are listed below.

• DF650TW26BLK Industrial Fan. A luxury-type wall fan with three speeds, an adjustable oscillating angle, pre-adjustable height, low-noise motor, and large air volume, suitable for heat-stroke prevention.

• DFK650T26BLK Industrial Fan. Stand Fan with streamlined blade design, firm structure, large air volume, low-noise motor, three speeds, and adjustable oscillation angle that makes it suitable for heat-stroke prevention.

• FF60M24CHR Commercial Floor Fan Series. Features high-

quality silicon sheet and all-copper coil motor, adjustable blowing angle, and easy-to-move wheels, making it suitable for ventilation in factories, workshops, warehouse, and stores.

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F E AT U R E S T O RY

Investing in Security Services against Theft With businesses avoiding physical contact, security guards are no longer checking people who enter the building, thus giving thieves the opportunity to steal from the business. Revamp your security with the following devices that will protect you against such criminals.

• Yale YDM3115. Premium RFID card digital door lock with multiple access, smart keypad and mechanical key override, break/ damage alarm, and emergency power.

• Dormakaba DMITS96EN24S. Concealed cam action door closer

that is suitable for timber, hollow metal and aluminium doors up to 130kg.

• Chubbsafes Viper. Combined burglary and fire resistant safe that

uses the new revolutionary “V” bolt system and comes in sizes of 11 to 91-liter capacity.

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Continuing of the Business in Case of Emergency To keep your business running in the event of emergencies, you must have backup systems in store. The wide dynamic assortment of CBK products for such cases can increase productivity and give you a reliable back up plan for any tough situation. Some of the equipment you need to have on hand include the NVNDG8500CLE Navigator Generator, TOCBYIIIA/CYPH Toho Hydraulic Hand Pallet Truck, STSXWTDPC528 Hand Trucks, and Ridgid Ladder.

Achieving Cleaner, Healthier Facilities with a Clean Underground Drainage System Metro Manila often experiences congested and clogged sewage and drains that will take roughly 12 hours to clear. Thankfully, with Ridgid’s innovative underground technology, specifically the Ridgid FlexShaft™ Drain Cleaning Machines, SeeSnake® Cameras, and the K-5208 Sectional Machine, clogged pipes can be cleared in minutes. In partnership with Co Ban Kiat Hardware, Inc., Ridgid is safeguarding the state of the metropolis’ underground drainage system.

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Managing Health and Sanitation Facilities Businesses should not only focus on the workstations alone but the restroom facilities, as well. Delta Faucets and Dyson Technology with its Airblade Hand Dryers provide innovative commercial solutions that will help businesses with this matter. Some of the must-have equipment in the washroom are listed below.

Where to Buy? For 100 years, Co Ban Kiat Hardware Inc. is the most trusted distributor of home improvement and hardware items in the Philippines.

Let’s shop wisely. #StayAtHome and order online at your convenience. Visit us in the following sites and enjoy deals, discounts, and more!

Website: https://www.cbkhardware. com/ Facebook: https://www.facebook.com/ cbkhardware/ Instagram: http://www.instagram.com/ cbkhardware Join our Fast Growing Viber Community http://%20https//bit. ly/3ebeCXU

Co Ban Kiat Hardware, Inc.

• Dyson Airblade V Hand Dryer. A simple and

compact hand dryer with HEPA filters and an easy-mount backplate for simple, self-service installation. It is costs up to 86% less than other hand dryers to run, much less quieter, and can dry hands within 14 seconds.

• Delta Faucets Grail Series. Faucets with sleek chrome finish, providing exceptional performance and stand up to the rigors of each application.

Revamping your business after COVID-19 is easy with these quality and reliable industrial products that will streamline your business to achieve the highest standard of profitability and efficiency in the operations. For almost 100 years, Co Ban Kiat Hardware is true to its promise in bringing convenience to life in many aspects and to provide more years of world class hardware solutions.

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Ground Floor, Cobankiat Building II, 231 Juan Luna St. Binondo Manila, Philippines.

Phone +632 8243-1931 Phone +632 8243-5263 Phone +632 8894-6561 Email info@cobankiat.com.ph ; ind@cobankiat.com.ph

Coby's Designer Center

Unit 467 level 4 Shangri-La Plaza Edsa Corner Shaw Boulevard Mandaluyong City, Philippines Phone +632 86364895

About CBK Hardware For almost a hundred years, a family’s surname has become synonymous to the country’s biggest hardware supply company. Co Ban Kiat Hardware Incorporated, of the Cobankiat family has a regular client network of more than 1,500 industrial organizations; 1,600 traditional community hardware stores, and 584 home building specialty chain of stores across Luzon, Visayas and Mindanao.

This ever-growing conglomerate traces its humble roots to Manila Chinatown, as a pioneer enterprise started by family’s patriarch, Mr. Cobankiat in 1920. Despite the ruins of World War II, the business goes back to its feet in 1948, rebuilding a storefront from the very same spot where it was known for three decades.

This ever-growing conglomerate traces its humble roots to Manila Chinatown, as a pioneer enterprise started by family’s patriarch, Mr. Cobankiat in 1920. Despite the ruins of World War II, the business goes back to its feet in 1948, rebuilding a storefront from the very same spot where it was known for three decades.

While the Filipinos continue to rebuild their lives post war, CBK Hardware sees the opportunity to introduce the retail concept once unheard for in hardware industry. Cobankiat Hardware brought the first DIY business in the Asia. A do it on yourself concept that created Cobankiat hardware in the Philippines. The Hardware Workshop Store is the fruit if this endeavor. CBK Hardware further cemented its legendary distribution channel with the creation of Coby’ Design Center in Edsa Shangi La in 1996, a specialty store that caters to discriminating taste of modern Filipinos.

In 1997, Mr. Johnny Cobankiat, the 4th generation Cobankiat leader, set another milestone for the company when he brings a franchise of Ace Hardware USA to the Philippines, and signs up CBK Hardware as one of its major suppliers. This further expanded into delivering quality world class products nearer to families of Filipino overseas workers in the countryside.

A century’s excellence can quickly pass, and guided by the vision to be the largest network supplier of the biggest global brands in the hardware industry, CBK Hardware resolve to source the best products to supply its customers anytime and every time.

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he COVID-19 pandemic that caused global lockdowns has severely affected the petroleum industry and pushed it into a state of major crisis. The oil demand across the globe progressively weakened during the early months of the year and was only exacerbated as structural oversupply created by Russia and OPEC’s struggle for market share continuously grew. Combining these two factors dramatically dropped oil prices in the world to a 20-year low.

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C O V E R

S T O R Y

The Role of COVID-19 in Transforming the Structure of the Industry With the oil and gas industry experiencing low prices, oversupply, and volatility, many companies are expected to be impacted by the economic downturn brought about by the COVID-19 outbreak. Investors are already seeing the industry as an increasingly unattractive investment over the past ten years. What’s worse is that the prolonged period of reduced oil prices will lead investors to place their capital elsewhere since the traditional oil and gas business model turns into a riskier and less commercially attractive investment.

While the global economy will obviously recover in the following months, it is likely that instead of returning to its pre-pandemic “business as usual” state, the industry will face prolonged significantly low demands because of the drop in economic activity and the increased pressure to switch to clean energy sources. Likewise, the industry will also need to deal with issues in oversupply. Four potential scenarios will likely happen to the industry based on several factors.

• Back to Normal. This scenario largely depends on the early V-shape recovery of the economy paired with the failure to address the agendas on climate change and renewables. Simultaneously, major oil producers must agree to cut production to lower the current oversupply.

However, achieving these conditions are unlikely.

• Stagnation. In this scenario, the global economic recovery and the impact on oil demand is L-shaped, which seems more probable. Here, the adoption of lowcarbon energy forms and renewables continue, holding back the oil demand recovery. Nonetheless, producers will gradually reduce oversupply in this scenario, supporting modest oil prices that will still ensure the viability of new projects.

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• Severe Injury. As the worst case scenario, this will see a slow L-shaped global economic recovery, combined with increasing destruction in oil demand driven by the switch to renewables and the consistent oversupply due to the repeated failure to cut production. On the positive note, the continued drop in demand will force OPEC and other major oil producers to adjust the supply to an adequate price level.

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While the global economy will obviously recover in the following months, it is likely that instead of returning to its pre-pandemic “business as usual� state.

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For many players to survive and succeed, they must not only focus more on renewable energy but also be able to deliver still-lowercost solutions.

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C O V E R

S T O R Y

• New Normal. The economy recovers after several months in a U-shape, and with the tightening of policies on climate change, oil prices are expected to strengthen. This will be the expected scenario even if OPEC and other major producers fail to reduce supply as much as in the past.

Post-pandemic Business Models for Oil Companies Under any scenario, the oil and gas industry is likely to transition towards greener energy sources in a post-COVID-19 world, especially with the ongoing demand to lower CO2 emissions.

For many players to survive and succeed, they must not only focus more on renewable energy but also be able to deliver stilllower-cost solutions. Seven hydrocarbon business models are expected to co-exist in the future.

• Diversified energy holdings. International Oil Companies (IOCs) will transform into energy-holding companies with a myriad of diverse interests. Their global oil and gas operations will become truly diversified energy holdings that are robust in a world that is switching to cleaner energy sources.

• XL oil companies. By prioritizing scale in monetizing existing, ultra-low-cost oil and gas resources, the biggest and most competitive national oil companies (NOCs) will emerge victorious.

• Regional “mini-majors”. Transforming their businesses into tailored, diversified, and integrated models for their specific regions, most regional players will eventually become diversified “mini-IOCs.” • Special-purpose vehicles (SPVs). To deliver more flexibility within their portfolio-restructuring strategies financially, oil and gas companies will increasingly create SPVs. • US drillers. Being the most impacted by the oversupply crisis, they will likely experience shrinkage and a major challenge for medium-term survival.

• Global oilfield service companies. This sector’s business models will be severely affected by the lowered drilling activity levels. To survive, they must develop and innovate new solutions for energy consumers and producers.

• Retailers. To ensure viable returns, this sector must invest in non-fossil energy and other related customer-service areas.

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- End -

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As we close in on the year 2020, many individuals in the oil and gas industry are conducting research and nigh endlessly studying about how they can improve their efficiency, work ethic, output, and overall morale. That having been said, here are their findings and gradually growing trends that are prospected to be realized next year.

Here are some of those findings: Firstly, the United States of America made over 15.3 million oil barrels every day in the year 2018, which meant America was, at that point, the top producer of oil in the entire world last year. Coming from this finding, the question then is: how can the oil and gas indus 37

COVER STORY

try keep up with such a massive supply and demand? To answer this question and prepare the industry for the year 2020, we must take a step back and revisit oil energy in 2018 and thoroughly scan the oil and gas industry’s performance this year, as well.

If there is one thing certain, it is that the oil industry is constantly evolving. Prices, for instance, are constantly shifting from high to low.

Like liquid, companies are always adapting to the energy market.

It is fortunate then that investors in the chemical industry have seen an upward growth margin over the past couple of years. That having been said, a bright idea may be to anticipate a potential decrease in pace in the future.

The good news is the economic downturn of the oil and gas industries in 2014 is a thing of the past. In fact, the oil markets have convalesced exceptionally well. This is thanks in major part to a few happenings, including: The successful treaty between those who are and are not part of the Organization of Petroleum Exporting Countries; less oil production from competitive markets; and strong demand for oil across the globe, among others.

Luckily, the natural gas liquid industry saw positive growth in 2018 as well, due to the Permian Basin manufactured an extra 2 million barrels per day last year.

In 2019, things became a little different. Performance of the industry fell back a bit compared to last year.

To start, there were a number of oil explorations this year.

According to a survey by the audit company Deloitte, there is hope for a full recovery for the oil and gas sector this year from the huge turnaround in terms of financial growth, gas prices, and investment returns for the oil industry right now.

With how much the oil and gas sector has risen all throughout the globe, there have only ever been a few risks presented from other countries that export oil.

As the oil and gas industry licks its wounds from the infrequent market, there have been several factors that point to an overall upswing, such as: Increased employment opportunities for American citizens; higher business investments in the oil and gas industry; stabilized prices 38

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There is hope for a full recovery for the oil and gas sector this year from the huge turnaround in terms of financial growth, gas prices, and investment returns for the oil industry right now.

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With the climbing price of consumer goods and the swollen cost of conducting business in the steel industry, there could be a disruption in future supply chains.

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COVER STORY

throughout the year so far, among others.

There has also been an increase of financial resources for the gas industry. This is because of tax cuts and improved government spending, which denotes that the oil market will continue to grow in 2020, despite the current taxes on the sector.

Thus, with the climbing price of consumer goods and the swollen cost of conducting business in the steel industry, there could be a disruption in future supply chains.

This means that, come the year 2020, the biggest oil and gas trend to keep a lookout for is profitable returns for investors due to the exceptional

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recovery of the price of consumer goods and cash flows last year. That being said, the only thing that investors have to worry about is how profitable their returns will be.

In spite the fact that the oil and gas industry was in a massive downward spiral several years ago, there have been colossal upsurges in capital high-grading and cost containment recently. Not to mention a rise in the efficiency of operations too.

One should also expect to see: A rise in the importance of infrastructure in the oil industry, a major comeback of the natural gas sector, a move towards sustainability in the oil, gas,

and chemical markets, and an emergence of high-tech advancements in order to ease the lives of the oil and gas industry workers.

In regards to the oil industry of 2020, one should note be surprised when there is an upward movement and greater emphasis in the importance of infrastructure. Bigger process facilities, underground pipelines, and storage building, among other innovations, will be more to the value chain of the oil and gas industry.

Another 2020 oil market trend that one should be aware of is the return of the natural gas sector and its potential to church out the most valuable resource for low-carbon power generators To conclude, prepare to see a spectacular move towards sustainability in the oil, gas, and chemical markets in 2020 in order to create a greener earth.

Despite the fact that the oil, gas, and chemical

industry always faced challenging in terms of penetrating the sustainability market, its attempts and journey to be more environmental is commendable and honourable at best.

This is great news for each environmentalist in the globe as the figureheads of the oil and gas industries are beginning to invest in renewable, low carbon energy companies and slowly but surely forego their planet-deteriorating products and practices.

As we move towards the year 2020, we must remember that the oil and gas sector is world-renowned tor its technological innovation and its potential for growth.

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M: +63 921 7105796

F E B R U A RY

2020

NEWS

The Industrial Hose Market 2019-2027

Ecopetrol acquires 30% of the Gato do Mato discovery in Brazil’s Pre-Salt

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The Wireline Group Upgrades to MiX Telematics for ELD Compliance and Asset

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pril 20, 2010 was the day the oceans suffered. Due to the tragic explosion of the British Petroleum Deepwater Horizon drilling rig in the Gulf of Mexico, 5 million barrels of crude oil was unleashed into the sea. 53,000 barrels of oil polluted the crystal blue waters with thick oil that flowed for 87 days. Needless to say, it was the biggest offshore spill in U.S. history—an industrial disaster for the books. But perhaps one of the more gruelling aspects of the Deepwater Horizon oil spill was the clean-up. They did not have widespread oil spill cleanup technology a decade ago. There was a lag in oil spill technology advancement since the 1989 Exxon Valdez disaster. That is why great news comes in the form of new advancements in oil spill clean-up.

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COVER STORY

Here are 4 Ground-Breaking ways experts hope will make the next Oil Spill Less Tragic.

1. An aerogel (freeze-dried mixture of claw with a polymer) sponge to draw out oil and leave water behind A sponge is easy to visualize—it is a porous yellow cube we use to help clean up spills in our kitchen. There is even a kids show about a sponge and it has aired for over 10 years.

Imagine if this was supersized to the point it could entire square meters of oil at a time. This is the brainchild and recent realized innovation of the researchers at Case Western Reserve University. They have developed a super-lightweight clay sponge to draw out oil from contaminated water and reuse the absorbed oil for later.

2. One boat to out-skim them all Booms and skimmers are popular clean-up devices currently used in oil spills, but skimming can only be done in smooth, still waters with a sufficient amount of light. These booms and skimmers are ineffective on rough waters and darkness due to low visibility.

Fortunately, the company Extreme Spill Technology has created a high-speed skimming vessel that can solve these issues. These lightweight vehicles can operate faster than traditional skimmers, can skim in waves higher than 3 meters, and do not clog as easily. The boat has been successfully tested by the Canadian Coast Guard and are set to be sold worldwide.

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53,000 barrels of oil polluted the crystal blue waters with thick oil that flowed for 87 days.

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COVER STORY

3. Magnetic soap may clean Tainted Water During the incident in the Gulf of Mexico, dispersants were the most commonly utilized weapon against the oil spill. Almost 3 million liters of dispersants and soaps were used in the clean-up effort.

Apparently, this is a lesser evil as dispersants do not easily break down in the environment.

Luckily, scientists from the University of Bristol have developed a new, iron-rich salty soap that reacts to magnetic forces once it is in the water. This ingenious compound, when placed in a solution, rises to the surface of the water, dragging the oil with it. The research is still theoretical, but experts hope that it’s the first step toward a new, important cleaning formula.

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4. Kevin Costner’s Oil Filtration Machine Yes, you read that right. Famous American actor Kevin Costner has a green thumb and is doing everything in his power to support the advancements of oil spill technologies. Kevin and Dan Costner (Kevin’s scientist brother) collaborated and soon debut an oil-filtration device that had been in development for more than a decade. It is reported that Costner has invested 26 million USD of his own money into a device that works on a centrifuge principle, separating and jettisoning clean water from oil. This is very poetic, as his character in the film Waterworld is also about a man whose heart belongs to the sea.

With these inventions in their beta phase, the future of the sea looks bright and Mother Nature can rest easier knowing these products are here to help her.

-end-

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Could your company benefit from having its profile listed on our supplier database? Visit www.sksd.ca and find out how you can join the more than 180 Saskatchewan-based suppliers who already enjoy the many advantages of a SIMSA membership.

Our Saskatchewan Supplier Database is a tool that helps link resource companies in need with qualified, capable Saskatchewan-based suppliers so that they can connect, innovate and grow together.

www.sksd.ca Database funding sponsors

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T

he advent of technology has brought a lot of innovations in the field of oil tank storage- and one of these is the use of tank farm automation system.

The development of the tank farm automation system paved the way for other milestones in off-sites oil storage and mobilization, including the use of programmable logic controllers (PLCs), distributed control system (DCS), temperature, level, and flow measuring systems, advanced control and optimization, preset controllers, and transactional business information systems.

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C O V E R

S T O R Y

Since the competition in the oil refinery business is exceptionally high, you really need to invest for the most advanced oil mobility and storage tank.

You will invest to the point that you are willing to compromise your financial stability. But most offsite oil refinery owners will opt to take the risk due to the overwhelming benefits that you will get from automated oil tank farm or depot.

In fact, the use of automated storage tanks and other high-end auxiliary equipment makes it possible to double or even triple the volume and speed of receiving and disposing crude oil to the market. And since automated oil farm tanks are bigger, there will be no interruption in between the storage and shipment processes.

But how this became possible? How come the receiving, storage, and distribution processes take place at the same time at a very fast rate?

Well, this is because automated oil farms are intricately designed with subtle attachments to the source terminals through rail cars, pipelines, marine carriers, and barges.

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Indeed, there are lots of benefits that you can get once you apply tank farm automation in your off-sites oil refinery facility.

However, before you employ and spend for the installation of an automated oil tank storage system, you need first to learn some of the best practices that you can benchmark. Otherwise, you will just be wasting your money, time, and effort.

Oil Tank Farm Automation Best Practices • Keep a Safe and Sound Environment. Farm tank automation is, indeed, a complicated thing. This adds up to the fact that you are working with oil that is a highly-volatile substance. With this, you need to be very careful and keep the refinery site safe. This can be done by conducting a couple of feasibility studies to confirm if the automated oil storage tank fit in a particular site.

You also need to make sure that all the pipes, valves, and block valves are working properly before you fully shift to farm tank automation system.

Another thing is that you need to check if you hire the right people. Just try to assess if your workforce knows how to manage and maintain an automated oil tank storage facility. If not, you need to orient them and teach them how to manage and run an automated oil depot.

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The development of the tank farm automation system paved the way for other milestones in off-sites oil storage and mobilization, including the use of programmable logic controllers (PLCs), distributed control system (DCS), temperature, level, and flow measuring systems, advanced control and optimization, preset controllers, and transactional business information systems.

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The use of automated storage tanks and other high-end auxiliary equipment makes it possible to double or even triple the volume and speed of receiving and disposing crude oil to the market.

And since automated oil farm tanks are bigger, there will be no interruption in between the storage and shipment processes.

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• Swift Transition. If you do not hit the right timing, shifting to oil tank automation could mean a menace to your oil refinery site. Why? Because the normal flow of operation will be affected. And this will result in millions of financial setback- from the failure of accepting new crude oil and abrupt isolation to the market chain.

If you don’t want these things to happen, you must know how to handle the so-called operational flexibility. Operational flexibility means keeping a minute to no changes in the normal operation of oil refining and storage. And this can only be possible if you have a well-studied plan. Try to consult first some experienced off-site oil operators to gain more insights on how to effectively adapt to using automated oil tank farm.

•Maintenance. Of course, if you want your automated oil tank farm to thrive, never forget the maintenance. You need to check the pipes and valves for any possible leak. You also need to always check the temperature since it may induce erratic changes to the volumetric measurements.

Most of the people who are engaged in oil refinery and storage business even purchase some of the top-notch tank gauging options for a more reliable tank level and status check.

•Keep a Stable Source of Funds. Apparently, if you want to dominate the off-site oil storage and refinery business through utilizing automated tank storage depot, you really need a huge capital! This is because if you have a stable source of funds, you can update and purchase new hardware in no time. If the market deviates from your side, your funds will be used to offset the possible monetary setbacks that you will endure.

These are some of the significant facts that you must know about the oil tank farm automation system. If you use this innovation the right way, you will definitely become the next oil refinery magnate soon!

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9

M AY

2020

NEWS

Oil Price War Amidst COVID-19 Pandemic

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Ventilation Standards for Buildings Converted to COVID-19 Hospitals

56

UCLA Engineer Made a Ventilator from Hardware Items

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C

OVID-19 or the coronavirus, is a recently discovered infectious disease that has resulted in a global mobilization against its spread through stringent government mandates such as enforced community quarantines, social distancing, and limited use of services and utilities.

Despite the sound validity

for the implementation of these laws, their effects on the economy, businesses, utilities, and industries have been detrimental and disadvantageous to say the least. In more ways than won, the coronavirus has also given way for great uncertainty about oil demand.

Following the discovery of the new virus and infections 101

C O V E R

S T O R Y

in Wuhan, China at the beginning of this year, the prices for oil have significantly declined by about 20 USD a barrel until the end of the first week of March.

Indeed, as security personnel and government officials in China shuttered production facilities and other non-essential businesses as part of their endeavors to prevent the corona virus from spreading, oil demand from China dropped drastically as well. The Oil Market Report from the International Energy Agency gives emphasis

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to the gravity of China’s role in the consumption of oil since they account for 14% of global oil demand and more than 80% of global growth in demand last year.

A newly released report predicts that in the latter part of 2020, the worldwide oil demand growth will fall for the first time since 2009.

Indeed, due to China’s increasingly salient role in the global economy, any sort of problem China might encounter in regards to its economy is likely to notably affect the other countries as well. Global fear and

uncertainty in regards to the spread of COVID-19 is likely to negatively affect investment decisions in China and in other countries, further weighing on demand prospects and lowering oil prices.

The subsidence in oil prices roiled financial markets and got them nervous about the spread of the novel coronavirus.

Equities in the US and the rest of the world lost approximately 7% while shares in US shale companies were hit the hardest.

Some shale stocks had lost 30% to 50% of their value. These moves suggest that investors are definitely challenged by the pandemic as they are experiencing an intensified fear of recession and have begun spending their time in searching for economic and financial safety.

Needless to say, there were a lot of economic and social effects.

As the world continues to struggle and adjust with this deep fear of recession, the Middle East and North Africa could be the hardest affected by what could arguably be the most destructive economic storm: the coronavirus spreading to the region and oil prices collapsing.

As of 9 March 2020, Iran had divulged a great number of important statistics: there were over 7,000 individuals who tested positive for the coronavirus, with at least 237 deaths having taken place due to the pandemic. The rapid rise in contracting the coronavirus there will surely disrupt the country’s production, trade, businesses, and other industries dependent on the oil industry to keep them going. The United Arab Emirates, Iraq, Bahrain, Kuwait, Algeria, Egypt, Jordan, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, and the West Bank

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HVAC contractors are at the forefront in the war against dirty, possibly disease-ridden air.

Safeguarding the air we breathe against possible threats, these HVAC contractors and technicians are among the many noble professional individuals and public health workers in the battle against COVID-19

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According to The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) president WIlliam Bahnfleth, any air cleaner that can remove particles from the air has the basic ability to reduce one’s exposure to coronavirus.

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BUILDING PARTNERSHIPS

and Gaza all have also reported COVID-19 infections.

The capability and means to contain the virus, while important without a doubt, will ultimately depend on the strength of the public health systems of those countries. As a general rule, lower prices are good for countries importing oil and bad for countries in the business of oil importation. An easy way to get a sense of the size of the real income effect is to multiply the difference between production and consumption (net oil export) as a share of GDP by the percentage point increase in the oil price. For instance, based on a hypothetical assumption that oil prices were to stay 48% below the 2019 level, Kuwait – where net oil exports account for 43% of GDP – would experience a decline in real income of about 20% of GDP. For the same increase in price, Morocco would experience an increase in real income equivalent to 3% of GDP. That having been said, in affecting the oil industry, the coronavirus has set off a series of chain reactions that have been affecting all other industries, mainly those that depend on the oil industry’s gains and services. However, due to the emergence of COVID-19 fighting technologies and medicine, who could know for sure when this whole thing will subside and give way to normalcy once again.

-end-

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COVER STORY

The Person: Bong Fadullon

P

hoenix Petroleum is the fastest-growing and leading independent oil company in the Philippines, quicker to grow than many existing leaders in the oil and gas industry. This is due in part to a great team, the support of management, and the leadership of Henry Albert “Bong” Ricafort Fadullon.

Now the company’s Chief Operating Officer, Fadullon is a born and bred product of Manila with humble origins in engineering. Fadullon is an industrial engineering graduate with a minor course in mechanical engineering from De La Salle University.

Having worked immediately after his graduation, Fadullon’s credentials led to a 10-month stint in a local shipping company. Stepping forth into unknown territories landed Fadullon in a multinational company. They assigned him to Mindanao, where he worked for almost 25 years. Thereafter, he was brought back to his hometown for a marketing role to reintroduce unleaded fuels, which he rebranded. This marketing strategy sparked the “brand segmentation” evolution within the Philippines’ oil & gas retail industry.

From then on, Fadullon had nowhere to got by up. He honed his skills in marketing to better know people management and he wanted to get frontline supervisory experience. After shining in the eyes of his superiors, he was tasked with the responsibility of managing sales in Luzon. Fadullon was given his first overseas assignment in Malaysia, followed by another overseas posting in Oman. He then moved back to the Philippines to take on a couple of local roles, the first one was for a regional B2B role overseeing four countries in South East Asia including the Philippines, and eventually moved to run the entire retail business in the country and the Pacific Islands. His last long-term posting abroad was in London for a seniorlevel general manager position that allowed him to oversee operational excellence in markets globally where Shell had retail presence. After his entrance and exits in each country, the businesses did not only thrive but overwhelmingly flourished.

From the UK, where he was tasked with one of the global retail marketing functions with responsibility over countries that Shell had retail presence globally, he went back to the Philippines and took on another global role by serving Shell Shared Services (Asia) B.V. as General Manager (Offer To Cash) for Global Businesses. Evident all throughout Fadullon’s career history was the theme of turning around low sales and bad businesses and giving them a brighter tomorrow.

As expected of a man with countless leadership hats and proofs of concept to his skills, he was assigned his biggest position yet: the COO of Phoenix Petroleum when he joinied the company in 2017. This position was assigned to him by none other than the company’s owner, Mr. Dennis Uy.

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“Technology is a key element of Phoenix’s strategy because as you move from oil and gas to a more consumer company — which is the future of Phoenix — technology is going to play a big part in having a fortified relationship with clients and customers.”

Bong Fadullon COO Phoenix Petroleum

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Top 10 Accomplishments & Breakthrough Projects We asked Phoenix Petroleum about their latest disruption, accomplishments or breakthrough projects. Here are some of the most notable achievements.

1. The first independent oil company to be listed to the Philippine Stock Exchange after the passage of the Oil Deregulation Law 2. In the past three years, Phoenix Petroleum has expanded its business offerings and services to include LPG, convenience store retailing, asphalt, car care and maintenance services, and digital transactions 3. Forged partnerships with Malaysian, Japanese, Thai, and Chinese companies 4. Overseas ventures in Singapore, Vietnam, and Brunei 5. Over 650 stations in retail network reached, an average of 40 new stations per year 6. Grew market share to 7.09% — the fastest-growing oil company in the Philippines 7. Introduced world-class innovative programs such as the fuel additive Phoenix PULSE Technology, the German-made SRG regulator for its LPG, and the biggest stand-alone FamilyMart store in the world 8. Largest network of into-plane services in the Philippines, servicing 18 domestic airports in the country 9. A record-high net income of Php 2.77 billion in 2018, an 82% increase from the previous year 10. Phoenix was also hailed “Marketing Company of the Year” at the 40th Agora Awards 118

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The Company: Phoenix Petroleum Phoenix Petroleum is an ever-thriving company with endless potential and products that give its competitors a run for their money.

Phoenix Petroleum was founded in Davao in the year 2002. A thriving nationwide network of retail and commercial channels, Phoenix Petroleum is thoroughly armed with a manifold product line that serves both individual and industrial clients. The company has been experiencing an average of 17% year-on-year growth in a flat market.

Phoenix Petroleum prides itself in its expertise on refined petroleum products and lubricants for retail and commercial channels, and bitumen used in asphalt; operation of oil depots, storage, and transport services; integrated logistics services including hauling and into-plane services of Jet A-1 fuels for airports and airlines; FamilyMart convenience stores in the Philippines; Phoenix SUPER LPG (formerly Gas Petronas); and PNX Petroleum Singapore Pte. Ltd for business trading in Southeast Asia and the rest of the world.

Phoenix’s foray into different businesses allowed it to bag numerous awards, including the prestigious Agora Award for Outstanding Achievement in Entrepreneurship-Large Scale in 2013. The award recognized Phoenix for “growing a provincial-based business into a nationally successful brand, for embodying the Filipino’s enterprising spirit, for persevering despite the odds, and for being an indispensable partner of the Filipino.”

This oil and gas giant has also been publiclylisted on the Philippine Stock Exchange since July 2007 as the first oil company to do so after the Oil Deregulation Law of 1998. Committed to environmental causes and social responsibility, Phoenix Petroleum supports various initiatives that give back to multiple Philippine communities.

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UDENNA Tower at Bonifacio Global City is currently the corporate head office of Phoenix Petroleum.

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“The oil and gas Phoenix of the past is no longer the oil-andgas Phoenix of the future or the present,” said Fadullon. “Thanks to technology, Phoenix is able to bring its business together and improve its relationship with customers”.

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Phoenix Petroleum’s speedy growth as a star player in the oil and gas industry from the Philippines is due to its strong leadership and reliability as a credible provider of topnotch, high-quality fuels. With their new Phoenix PULSE Technology at the ready, their already-innovative fuel products experienced an elevation in quality. This resulted in the improved performance of the fuels and the contentment of their large and loyal pool of customers throughout the country. Its fullyequipped stations, buttressed by strong locator partners, service a steady flow of motorists and travelers who rely on their quality fuels and endless list of services.

Truly, Phoenix Petroleum’s commitment to delivering world-class service, empowering people, and revving up every Filipino’s entrepreneurial spirit burns bright enough for all to see.

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As a homegrown company expanding internationally, Phoenix Petroleum is confident in its Board of Directors and Management Team, among them is Mr. Fadullon himself.

These figureheads streamline their decisions, making the decision-making process nimble yet well-thought-of.

Like Fadullon, Phoenix Petroleum’s products are top-notch, effective, efficient, and heighten the quality of the machine it fuels.

Phoenix Petroleum treats motorists of different vehicles to a wide array of petroleum products that meets Euro 4 specifications for cleaner fuel. High-quality fuels, including Biodiesel, Super Regular 91 Gasoline, Premium 95 Gasoline, and the flagship high-performance Premium 98 Gasoline––all with Phoenix PULSE Technology––cater to any and all the motorists’ needs.

First in the list is Phoenix Premium 98, which gives a lot of bang for a buck with its standardbeating, higher octane rating. Users enjoy the benefits of increased acceleration, reduced engine friction, protection against corrosion, cleaner gasoline deposit,and prevention of further deposit buildup. Phoenix PULSE Technology is a fuel additive with advanced cleaning and protection properties for enhanced power and acceleration.

On top of fuels, Phoenix Petroleum also has a high-standard product line of lubricants for automotive and industrial use at their disposal. These products enhance engine protection, speed, and power. Lubricants are sold to businesses and are available in several Phoenix fuel stations nationwide, in partner auto and bike supply and repair shops, and in hardware and retail stores. These lubricants are used in the fields of agriculture, construction, manufacturing, marine, mining, motorcycle, power, passenger cars, jeepneys, trucks, and buses. Armed with engine oils, axle and transmission oils, coolant brake and clutch fluids, greases, and hydraulic fluid for any machine in any industry, Phoenix Petroleum is ready for a wide range of oil and gas requirements.

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Phoenix has embedded financial technology or fintech in its 650 retail stations, Family Mart stores, 4,000 LPG hubs, and 17,000 retail touchpoints. The fintech system records 500,000 customer visits per day and features an electronic payment gateway through Posible.

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COVER STORY

Lastly, Phoenix Petroleum is also present in the business of liquid petroleum gas (LPG) and Autogas, a clean-burning, high-octane, environment-friendly alternative fuel for vehicles.

For homecooks, Phoenix’s LPG business includes Phoenix SUPER LPG cylinders for household and commercial use (in bulk for industrial use). These flammable mixtures of hydrocarbon gases are used as fuel in heating appliances, cooking equipment, and vehicles.

Phoenix Petroleum turns the dial up to eleven with their Phoenix SUPER LPG. A credible and efficient green alternative fuel for home cooking, Phoenix SUPER LPG lets chefs and

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homecooks discover the joys of cooking and gives modern Pinoys the freedom to rule and master their kitchen.

For the motorists on the road looking to create a greener tomorrow, Phoenix Petroleum offers Autogas: a green fuel due to its slow emission characteristic, health-friendly properties, and is perhaps the perfect alternative fuel for vehicles today.

In 2019, Phoenix Petroleum opened its 650th station on the corner of Alabang-Zapote Road and Filinvest Avenue, Muntinlupa. This is just the latest in Phoenix Petroleum’s plans to expand to other locations in the country and,

in the near future, more parts of the globe.

Some Phoenix stations are equipped with locators, such as convenience stores, restaurants, and car care repair shop to offer more value to customers.

Mr. Fadullon himself experienced many hardships like any other big name, but his response to these challenges are worthy of applause––to face them head-on, prepared, analytical, and passionate. Nothing but hard work and determination, peppered generously with his amazing leadership skills and desire to manage people well, was and will forever be his key to success. And, much like its current COO, Phoenix Petroleum is steadily on the rise, facing and challenging many oil and gas giants along the way.

Note: Date of interview 21st January 2020 at Udenna Tower

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With a 17% year-on-year growth since 2016, Phoenix is very much capable of going outside Asia. Its ability to grow its businesses to exponential levels helped it gain an environmental, economic, and strategic impact that isn’t easily copied by its contemporaries.

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Phoenix Petroleum Philippines, Inc. is the fastest-growing and leading independent oil company in the Philippines. It was established by Davao businessman Dennis Uy in 2002 and has been publicly listed on the Philippine Stock Exchange since July 2007.

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Subsidiaries under Phoenix Petroluem Phoenix Petroleum Philippines, Inc. is a conglomerate composed of related and complementary subsidiary companies that were acquired or established over the past years.

Phoenix LPG Philippines, Inc. is engaged in selling and marketing of the Phoenix SUPER LPG brand and other gas products. It was previously known as Petronas Energy Philippines, Inc., a subsidiary of Petronas Dagangan Berhad of Malaysia, before it was acquired by Phoenix Petroleum in 2017.

PNX Petroleum Singapore Pte. Ltd. Is the

first overseas company of Phoenix Petroleum.

It focuses on trading and supply and serves the fuel requirement of the Phoenix group and of other companies.

Phoenix Asphalt Philippines, Inc. is a joint venture by Phoenix Petroleum, Thailand’s TIPCO Asphalt, and PhilAsphalt. The company is involved in the operation, marketing, and distribution of bitumen and bitumen-related products in the Philippines.

Philippine FamilyMart CVS, Inc. is the local franchise of Japan’s FamilyMart convenience store chain. It was acquired by Phoenix Petroleum in 2018.

Posible is a digital transactions provider

acquired by Phoenix Petroleum. It offers bills payment, money remittance, bank deposit, phone load, e-pins and gaming pins, and other digital transactions through a portable machine.

Phoenix Vietnam Pte. Ltd. is the second overseas venture of Phoenix Petroleum and is a joint venture with Cong Ty Tnhh Cong Nghiep, a Vietnamese company. PVPL is engaged in the marketing and distribution of LPG products in Vietnam.

-end-

VIETNAM

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J U LY

2020

NEWS

Unit Corporation Oil & Gas Files Bankruptcy

42

Shell Catalysts & Technologies and Wood announce an Exclusive Agreement

46

Axalta Completes Acquisition of UAEBased Capital Paints

50

A

few months have passed since the initial coronavirus outbreak spread across the world and caused the countries to implement extreme albeit completely valid rulesets such as community quarantines, nationwide lockdowns, mass testing operations, and medical frontline endeavors, among other methods to buttress the coronavirus’ spread. Many industries as well are reeling from the adverse effects of the virus, doing everything in their power to remain working in a slowly collapsing economy.

One such industry that faced multiple consequences thanks to COVID-19 is the oil and gas industry. After the months that have passed, one question still remains: is this post-coronavirus season a new age of reckoning or opportunity?

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C O V E R

S T O R Y

The oil and gas industry is currently experiencing its third price collapse in 12 years. After the first two disruptions, the industry managed to bound back, some might even say better than before. However, this time is different.

The current context combines a supply shock with an unparalleled demand drop and a global crisis. In addition, the sector’s financial and structural health has never been worse. Shale and excessive supply, among others have all contributed to poor returns. Now, with prices at an all time low executives sense that change is inevitable. The COVID-19 crisis accelerates what was already shaping up to be one of the industry’s most transformative moments.

While the actual depth and duration of this crisis are unbeknownst to us, research suggests that without fundamental change, it will be difficult to return to the prior days of the coronavirus, when an attractive industry performance for the industry has historically prevailed.

Due to COVID-19, there have been challenges that require the utmost attention. The combination of the pandemic demand disruption and the supply glut has generated an industry crisis.

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There have been short-term scenarios for supply, demand, and prices. Under the best-case of these, oil prices could recover in 1-2 years. Price differences in this period are also likely to be seen as both challenges and opportunities. Demand for refined products has plunged by at least 20 percent and research suggests that it will be at least two years before demand recovers.

There are also long-term challenges for the industry. It is expected that growth in demand for hydrocarbons, specifically oil, will peak in the 2030s before declining once more. Juxtaposed to that, the upstream cost curve will likely stay flat. Needless to say, geopolitical risks will continue to be a major factor in affecting supply and demand. The resilient albeit battered shale oil and gas subsector will persist to provide supply that can be rapidly brought onstream.

Today, governments are laser-focused on managing the COVID-19 pandemic and mitigating the effects on economies, which is deflecting attention away from the energy transition, which is a persisting challenge in

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Today, governments are laserfocused on managing the COVID-19 pandemic and mitigating the effects on economies, which is deflecting attention away from the energy transition, which is a persisting challenge in and of itself.

Innovations that have cut costs for wind, solar, and batteries will continue and the decarbonization will remain a paramount objective for the industry.

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The oil and gas industry is currently experiencing its third price collapse in 12 years. After the first two disruptions, the industry managed to bound back, some might even say better than before. However, this time is different.

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and of itself. Innovations that have cut costs for wind, solar, and batteries will continue and the decarbonization will remain a paramount objective for the industry.

So, how does the oil and gas industry win in the “new normal�?

A handful of companies whose business models or asset bases are already distinctive can thrive in the new normal. But for most companies, a change in strategy, and potentially business model, is an obvious need. The oil and gas industry can learn from other companies and industries. It is instructive to seek inspiration from other industries that experienced sector-wide change, and how the leaders within these industries emerged as value creators.

Mittal Steel Company built a model around acquiring assets with structural advantage and then cut costs and improved operations.

Additionally, they initiated significant industry 156

consolidation as well. Nucor Corporation combined industry-leading operational capabilities with a first-mover status in electric-arc furnace technology. Others concentrated on scale and technology in profitable niches like seamless pipe.

There is also merit for the oil and gas industry to take bold action during the crisis to secure resilience and accelerated positioning. They must reshape their portfolio and radically reallocate capital to the highest-return opportunities, take bold mergers and acquisitions moves, unlock a step-change in performance and cost competitiveness by re-imagining the operating movel, and ensure supply-chain resilience by redefining the strategic partnership approaches.

This will indubitably create an oil and gas industry of the future in both talent and structure––one that is ready to face the new normal.

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As revealed by the Occupational Safety and Health Act of the US Department of Labor, there should be guidelines in place in the workplace now that the COVID-19 pandemic is happening. It is essential that employers remain aware of the changes in the outbreak conditions, including the spread of the virus and the testing availability in the locality, to better assess the risks and properly impose the guidelines set by the OSHA. For the oil and gas industry, low risk exposure tasks include oil and gas drilling, servicing, production, distribution, and/or processing tasks that do not require frequent close contact with other coworkers, contractors, customers, or the public.

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C O V E R

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S T O R Y

Performing duties in non-public areas of oil and gas production and/or processing facilities, away from other workers or the public, is also considered low risk.

The medium risk tasks involve oil and gas drilling, servicing, production, distribution, and/ or processing tasks that require frequent close contact (within 6 feet) with coworkers, contractors, customers, or the general public. Traveling within facilities or between facilities, such as control rooms, trailers, and dog houses, and sharing vehicles are also labeled as medium risk tasks. Fortunately, there are no high nor very high-risk tasks involved in the oil and gas industry.

Engineering Controls The latest information regarding the asymptomatic spread of SARS-CoV-2 reveals that there is a need for social distancing and other protective measures in the oil and gas workplace. To combat this spread, changes in production practices should be in place to keep workers within appropriate distance from each other.

This includes configuring communal work environments (such as control rooms, jobsite trailers and/or dog houses) in a way that workers are at least six feet apart. If feasible, the alignment of workstations, including the control panels/boards, should be modified, too, to space workers within at least feet from one another and not facing each other. Ideally, markings and signs should be placed around the workplace to remind employees of physical distancing even during break hours.

Use impermeable physical barriers between workstations, but make sure that these do not pose additional hazard to the workers (e.g. reduced visibility around equipment). The ventilation around the facility is important, as well. One way of doing this is to keep windows open and minimize the use of fans blowing air from one worker to another.

Consider consulting an HVAC engineer, if possible, to provide the adequate ventilation systems.

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Performing duties in non-public areas of oil and gas production and/or processing facilities, away from other workers or the public, is also considered low risk.

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Practice proper hand hygiene for those who will carpool and provide hand sanitizers with at least 60% alcohol.

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S T O R Y

Administrative Controls Apart from introducing the engineering controls, the administration should also take steps to reduce the contact of workers. Set different arrival and departure times, so as not to congest common areas like the parking lot, shower rooms, and control rooms. This should also be done to break times and if possible, numerous temporary break areas should be set up.

Encourage workers to move in a single file throughout the facility with six feet spaces in between. Appoint a specific worker who will monitor and facilitate social distancing in the facility.

Limiting the number of personnel assigned to the common operating rooms is also encouraged. Take advantage of video conferencing apps to hold meetings and avoid congestion of people within a room.

Carpooling to work and job sites should be discouraged. If company

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shuttles are to be used, make sure to limit the number of people inside each vehicle and increase the frequency of trips and the number of shuttles to accommodate all of the workers. Group workers together in small numbers to keep the exposure cluster as little as possible.

Practice proper hand hygiene for those who will carpool and provide hand sanitizers with at least 60% alcohol, so they can sanitize their hands before and after using the vehicle. Each vehicle used should also be cleaned and disinfected after every trip, making sure that commonly touched surfaces, like handles and seat belts are disinfected thoroughly. In addition, coughing and sneezing etiquette must be observed within the vehicle.

The administration is encouraged to set up a system for workers to easily notify their superiors if they ever learn that they come in contact with a suspected COVID-19 positive or whenever they show any symptoms of the disease. Develop back-up staffing plans should this happen, as well.

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Oil refining has typically balanced the decline in oil prices in the crude market, as volumes grow with the decrease of crude prices. However, the pandemic has severely interrupted this dynamic.

Today, crude oil prices are declining because of the oversupply brought about by the rapid drop in demand across the globe. With the pandemic shattering the economy of the majority of the countries, most businesses and personal travel have drastically slowed down in the past months, especially commuting by car. As some analysts suggest, gasoline demand is likely to plummet by 50% during the months which are greatly hit by the COVID-19 outbreak.

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This low demand in oil is currently damaging the inventory not only at oil refineries but also in the distribution network. This, in turn, produced drastic declines in the crack spread (the overall difference between the price of a barrel of crude oil and the prices of petroleum products refined from this). A majority of the market has already reported negative crack spreads, with the US Energy Information Administration (EIA) daily prices report for April 13, 2020 showing the crack spread at -0.084.

With the current state of negative crack spreads and increased inventories across both the oil retail and distribution network, refineries are more likely to require shut-ins and export their outputs. One silver lining, though, is the robustness of the diesel market during these times. Its market experiences less severe declines in demand, with only a drop of close to 20%. This can be attributed to the fact that supply chains and businesses in this sector remain open to provide essential services to retail and industrial businesses which are less affected by the pandemic.

As companies in the oil industry search for ways to combat these difficulties and reduce the negative impact of the outbreak, they need to consider a few steps to keep their firms afloat. • Taking care of their resources (both human and assets). It can be challenging to continue operations under the restrictive rules of the pandemic. But it is a must to develop and implement proper COVID-19 protocols, contingency plans, and schedules in a bid to ensure the integrity of assets and the protection of employees. • Supporting customers. Despite the current situation, customers stand at a priority for oil companies. It is best to communicate and compromise with customers now to retain them. A variety of measures to achieve this could be pricing flexibility, delayed payment terms, and putand-call options, to name a few. • Assessing and managing storage positions and inventories closely and quickly. Check the controllable value chain for trouble spots. Identify where you want inventory to go to and how you can manage price exposure and levels.

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As companies in the oil industry search for ways to combat these difficulties and reduce the negative impact of the outbreak, they need to consider a few steps to keep their firms afloat.

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Companies should expect to face additional challenges and opportunities once the COVID-19 pandemic subsides and the global economy begins to bounce back

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• Searching for global market outlets. Look for markets outside that are less affected by the pandemic and can potentially take product cargoes in the short term.

• Considering the shutdown of refinery. While not ideal, firms need to review the profitability and the market options for the plants. It is best to prioritize production in refineries with the most profitable operations and higher flexibility for moving volumes.

• Preparing for recovery. If shutdowns or shut-ins are deemed necessary, use the extra time for maintenance and turnaround activities to keep things smooth once the initial recovery starts.

• Revisiting capital projects portfolio. For plants that have to shutin or shut-back, consider deferring or cancelling projects in order to preserve the capital. See which projects can be accelerated or bundled, as well.

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In the long run, companies should expect to face additional challenges and opportunities once the COVID-19 pandemic subsides and the global economy begins to bounce back. The moment this happens, it is an advantage to have a strategy and plan to keep the company as unaffected as possible. An effective strategy should consider the following: • Management of the resumption of demand • Exploration and establishment of a broader and flexible markets • Optimization of commercial opportunities • Enhancement of emergency protocols • Continuation of customer relationship building As the globe and the oil industry emerge from the COVID-19 outbreak and the damaging collapse of oil prices, today is the ideal time for oil firms to look into downstream landscape and strategize on ways for the industry to emerge victorious.

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T

he past few months have seen a drastic change in almost all business function as they respond to the COVID-19 pandemic.

Among those businesses that has proven to be resilient in the face of crisis and is dubbed as essential, as well, are the convenience stores and gas stations.

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S T O R Y

Tons of the convenience stores and gas stations, which have become vital businesses in the neighborhoods they are in, have applied changes to keep up with the tough times. Although some of the changes made may be temporary, others are more likely to become a permanent thing in the future, ultimately changing the business practices in both industries.

Convenience Stores and Gas Stations as Essential Businesses amidst the COVID-19 Pandemic Before the outbreak hit the globe earlier this year, studies have revealed that about 40% of fuel customers rarely visit the actual convenience store at their gas stations. However, this has changed just recently as these stations became the local food and grocery option when the lockdowns began. Since these small shops are typically only a 10-minute walk or drive from a person’s home, it is but logical to grab necessities there. In fact, in rural areas, 8 out of 10 Americans often pick up their groceries whenever they are at their local convenience store.

When the pandemic hit, the US government dubbed convenience stores as an essential business, and a survey in April 2020 revealed that over 50% of convenience stores reported an increase in grocery sales during the outbreak. Sales in the food service, however, have significantly declined, mainly due to the change in menus and services, including the shutdown of seating and self-serve areas to minimize the risk of potential contamination.

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Sales in the food service,have significantly declined, mainly due to the change in menus and services, including the shutdown of seating and self-serve areas to minimize the risk of potential contamination.

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To meet the increasing needs of their customers, a handful of gas stations have begun stocking extra staple items, including bread, milk, and toilet paper.

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Changing Convenience Stores and Gas Stations to Satisfy Customer Needs To meet the increasing needs of their customers, a handful of gas stations have begun stocking extra staple items, including bread, milk, and toilet paper. Others who already have mobile apps and online ordering options have added curb-side pickups to their features, as well, while some have partnered with online delivery services like Door Dash and Uber Eats.

They have also added plexiglass shields at the checkout counters and increased the cleaning and sanitization policies to protect both the customers and employees. Some stores decided to shorten their business hours to give way to more thorough cleaning and restocking activities, while others implemented new payment methods, such as Point of Sale mobile payments for curb-side option and EBT food (SNAP) payments. This comes as an improvement after the McKinsey Global Payments Report reveal that 75% of transactions are done through cash. Now, electronic payment technologies are expected to grow in popularity, including mobile wallets (Alipay, PayPal, WeChat Pay, and even QR codes and barcodes), credit and debit cards (whose users have dramatically doubled in the past five years), and even augmented reality tools where gas station attendants can simply scan payment codes on customers’ smartphones and finish the transaction within 30 seconds.

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Convenience Stores Updating their Customers on New Changes Since the beginning of the lockdown periods, many customers rely on convenience stores and gas stations for their daily essentials. This meant that business owners should prioritize getting the word out to their customers regarding their expanded staple item options and the new delivery and payment systems they have put up to deliver services and products safely. This can easily be done through various signage across in the store and sending out mailers to their local regular customers to raise awareness on the changes.

The Future for Convenience Stores and Gas Stations Although it remains uncertain how the outbreak will affect these businesses for the rest of the year and further into 2021, the impact will likely be smaller as conveniently located shops in neighborhoods will continue to become an essential business. However, several factors, such as government regulations, stay-at-home measures, and temporary store closures, will result in both short and long-term economic effects. This meant that it is but necessary for all businesses across many industries to adapt to the changes in the environment and their customers’ needs, especially since changes in the gas station industry are already in motion. Keeping up with the technological solution is an advantage.

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