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Categories of Oil & Gas Industries

2/6/2013 8:47:04 AM | by Anonymous

Oil & Gas Industries

Also known as petroleum industry, oil & gas industries are booming because of worldwide demand for energy. Petroleum plays a significant role in shaping the economy of a nation and maintenance of industrial civilization. Oil & gas industries are responsible for performing all the processes from locating to marketing of petroleum products which include fuel oil and gasoline. Petroleum products came from raw materials that are extracted and processed into useful substances that are marketable to consumers. The raw materials or hydrocarbons are said to have formed from remains of ancient plankton that became rich in carbon after several million years of exposure to heat and pressure from being buried under the ground. As the remains lay on the surface, it gets covered burying it deeper into the Earth’s crust preserving the decayed residue within pressured and hot layers forming oil reservoirs. Oil reservoirs are scattered all over the world usually on remote areas such as desert and the bottom of the ocean floor.


Oil & gas industry includes different activities before the production of petroleum products; extraction, refining and transportation. The process of oil & gas industry starts at exploring where hydrocarbons are located as they may be resting from various parts of the world. Once they are discovered, they will be extracted which can either be on land or at sea and the span of operation may take months or even years. The refining step includes converting of raw materials into important diesel and gasoline fuels that power automobiles and production of chemical products. Some chemical products include fertilizers, pesticides, pharmaceutical, solvents and plastics to name a few. In 1850, the first modern refineries were built. The extraction and refining processes are relatively new as they only started in the 19th century which first occurred in the United States and in Russia. Transportation in oil & gas industry include moving raw material to refining facilities and petroleum products to consumers and industries through ships, oil tankers, pipelines and other means. The first oil tanker used for transporting raw material was in 1878.


Oil & gas industry is divided into three main categories namely upstream, midstream and downstream. Since midstream operations are usually incorporated to downstream operations, only two are considered as the industry’s main categories. Upstream operations, or also referred to as Exploration and Production (E&P), include discovering for new hydrocarbon deposits, finding a way down to the reserves by drilling and unearthing them to the surface. The cost for these processes has to be considered as the oil to be extracted may not be sufficient to gain the expected profit from the operation. Once the oil reserves are extracted, the industry will separate out crude oil from natural gas. However, some recovery operations are not designed to capture as the natural gas is burnt off or injected back into the earth during drilling operations. The main downstream operations of the oil & gas industry comprise of processing and transportation. The oil extracted from the sea is transported overland through pipelines and large tanker ships. The processing component includes refining of crude oil into various products that are deemed useful for various purposes. Processing of crude oil is primarily done through fractional distillation though other refining can be employed to achieve specific kinds of hydrocarbons.

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