Stochastic analysis of crude oil procurement and processing under uncertain demand for bunker fuel oil

Bunker fuel oil (ifo), one of the products of petroleum refining, has a strong impact in the production process because it drives the availability of heavy residues that depend on the crude quality. A simplified stochastic model for the Administración Nacional de Combustibles Alcohol y Portland refinery, based on the uncertainty of the demand for ifo, is proposed for comparison with the current approach of deterministic demand. In this model, the benefits of the production process are maximized, taking decisions on the more suitable raw material, intermediate products and final blends in order to fulfill quality and demand requirements of final products. A specific case is analyzed where the maximum benefit is achieved when the most expensive crude quality is purchased, due to a lack of incentive to produce extra amounts of heavy fuel oil that must be exported at a non‐attractive price. Results are compared with the solution of a deterministic model with mean demand. In addition, the stochastic model solution depicts how the refinery should operate for each scenario of ifo demand.