Assessment of oil refinery performance: Application of data envelopment analysis-discriminant analysis

Refineries are vital not only in the oil and gas industry but also in many other industries. Refinery products are essential for many industrial sectors and end-users. However, the market for refinery products has witnessed a significant transformation due to changes made in products to meet market demand and environmental regulations. This study examines refineries' operational efficiency and conducts an efficiency-based rank assessment using an unbalanced panel dataset comprised of oil and gas refineries in four global regions (U.S. and Canada; Europe; Asia-Pacific; Africa and the Middle East) covering 2008 to 2017. This study applies a combination of data envelopment analysis and data envelopment analysis-discriminant analysis to examine the efficiency-based rank for oil and gas refineries. A Kruskal-Wallis rank sum test is conducted to examine whether the average efficiency-based ranks measures change over time and whether they differ among the four regions. Moreover, a Wilcoxon rank sum test is utilized to investigate whether the adjusted efficiency averages differ between any two of the regions under study over the 10 years between 2008 and 2017. The results indicate that the U.S. and Canada display superior performance among the four regions, likely because that region contains major companies and complex refineries that use highly advanced technology.