Simulation modeling is the process of creating computer models that represent the actual production and important logistics processes in the oil industry. The process not only considers the viability of the designed project but it is useful in the prediction of uncertainty such as weather in the oil industry. The aspect of uncertainty is incorporated into the models as random variable, these variables represents uncertain events such as equipment breakdown and destructive weather condition. The system depends on statistical distribution to determine frequency and patterns that determine the occurrence of uncertain events. Using simulation enables the players of the oil industry to work with proven methodologies that reduce or eliminate possible risks (Lanner, 2008).
Like most models simulation depend heavily on the use of symbols and animation to represent key factors in the production and logistic sector of the industry. The models therefore use these symbols and animation to represent movements of ships between ports and stations. The models also have appropriate symbols that represent the variation of inventory according to demand and production. Most simulation screens have unique icons that represent facilities, equipments, and products. With the current improvements in technology, simulation applies the latest simulation software and graphical technology to enhance accuracy through the projection of 3D images. These images provide a good representation of real equipments and facilities that promote communication the concerned (Górski, 2006).
Simulation is not only important in the design and decision-making but its application results in massive benefits. The first application of simulation model that is of great significance to the industry is the validation of new receiving and shipping terminals. The models are also