EMC Working Papers

Decarbonising Steam: A Strategic Imperative for the Oil Refining Sector

Steam is the lifeblood of petroleum refineries, powering turbines, heating, and driving critical processes—yet generating it consumes up to 30% of a refinery's energy and accounts for roughly a third of its greenhouse gas emissions. Conventional steam production, reliant on fossil-fuelled boilers, is challenging to decarbonise without significant capital expenditures, and rarely yields meaningful emission reductions. With such a sizable environmental footprint, the pressing challenge is clear: how can refineries sustainably produce steam at scale? This article explores a compelling answer—concentrated solar thermal (CST)—and evaluates its potential to transform Colombia’s refinery sector, making efficiency and sustainability not just aspirational goals, but achievable realities.

The major premises of the resource-based view of the firm (RBV) are that firms are bundles of idiosyncratic resources and capabilities and that firms with valuable, rare, inimitable and nonsubstitutable resources and capabilities outperform in their industries (Barney, 2001; Dierickx and Cool, 1989; Wernerfelt, 1984, 1995). Drawing on Barney (1991), Miller and Shamsie (1996) define property-based resources as appropriable resources controlled by the corporation through property rights, and in contrast, knowledge-based resources are those "protected from imitation not by property rights but by knowledge barriers", and often include technical, creative or collaborative skills (1996: 522).

This paper uses the resource-based view framework to conduct a comparative analysis of the major European oil and gas companies. This study will look at six companies namely BP, Eni, Repsol, Shell, Statoil, and Total, and identify which resources are drivers and determinants of their competitive advantage and financial performance. Drawing on the framework of property-based and knowledge-based resources, the paper will analyse six resource categories of oil and gas companies namely annual capital expenditure, annual changes in liquids and gas reserves, annual replacement ratios, refinery distillation capacity and number of service stations, number of employees and net income per employee, and annual levels of drilling activity in exploration and development with a disaggregation of successful and unsuccessful wells drilled.

The ACEGES (Agent-based Computational Economics of the Global Energy System) 1.0 model is an agent-based model of conventional oil production for 93 countries. The model accounts for four key uncertainties, namely Estimated Ultimate Recovery (EUR), estimated growth in oil demand, estimated growth in oil production and assumed peak/decline point. This documentation provides an overview of the ACEGES model capabilities and an example of how it can be used for long-term (discrete and continuous) scenarios of conventional oil production.

Keywords:

Oil production, ACEGES, agent-based model, energy scenarios, oil forecasting