Oil and gas industry is a global powerhouse in terms of the huge revenue that it generates and the number of jobs it creates in the world. In terms of value, it is by far the biggest sector in the world. The oil and gas companies are the major driving force behind any country. Their impact on the gross domestic product or GDP of any country is very vital in terms of growth.Read More
Categorization of oil and gas industry
The oil and gas industry can be divided into three segments.
- Upstream : This segment or stage involves exploration and production of oil and gas. In this segment, the search of oil and gas fields and the drilling of wells is conducted. Oil and gas companies explore and research the potential target areas with the help of state of the art technology. Once they successfully identify and quantify the oil and gas reserves, then they can start drilling the oil and gas wells for the production purpose. This whole operation is conducted by very sophisticated machines with the help of the latest upstream oil and gas software. Any mishandling can cause a major fire accident.
- Midstream : This segment covers the transportation, storage and the processing of the raw oil and gas produced from the reserves. Once you obtain the natural resources from the field, then this raw oil and gas needs to be transported to the refineries. These refineries can be located in entirely different geographical locations, therefore the transportation can be done by various methods. This includes the oil tanker ships, trucking fleet and the direct pipelines from the oil and gas reserve. These refineries store and process the raw material.
- Downstream : This is the filtering stage of the natural resources unearthed from the oil and gas reserve. In this phase, the refining of crude oil and purifying of natural gas takes place. The crude oil and natural gas are refined into various petroleum products, these are natural gas, fuel oil (diesel), gasoline (petrol), lubricants, kerosine, LPG and various other petrochemical products.
By refining the crude oil and gas from the reserve we get many very useful products and byproducts. These products have a very important role in our daily life. Every person in the world uses at least one of the products obtained from the refinery.
Fuel oil (diesel) : Diesel is the primary source of energy to trucks and heavy machinery. This is also used to power our electric generators. There are many cars running on diesel engines these days.
Gasoline (petrol) : Gasoline is another high volume product refined from crude oil. This is the main source to power all our motor vehicles. Most of our cars and bikes use petrol as a primary fuel.
Natural gas : After purifying the raw natural gas, we get the natural gas for our household use. By compressing it, we get the compressed natural gas, which is a type of fuel for certain vehicles also. We also get the LPG or liquified petroleum gas, as a fuel source for our house.
Various other petrochemical products : Beside these above mentioned products, we also get lubricants, kerosine, asphalt, jet fuel and heating oil etc. Our crude oil is also the primary source for the multiple chemical products including pharmaceutical, agriculture fertilisers and many types of solvents and plastic.
“Success usually comes to those who are too busy to be looking for it.” – Henry David Thoreau
Most of the global economies and their infrastructures rely on the oil and gas accounting software, oil and gas industry and their petroleum based products. Even though the level of the oil and gas reserve is falling day by day, it still has a major influence over global economics and politics. This industry provides so many jobs to the people. It is the single most driving force that can have both positive and negative effects on the GDP of a country. The oil producing countries are a major benefactor in this business.
Video Credit – The Institute for Oil and Gas Sector-IOGS
Most countries that don’t possess the mega oil reserves and rely heavily on the import of petroleum products have to spend a high part of their GDP on the import. This has a very significant impact on the development of that country.
Whether a country is producing crude oil and gas or importing it from other producing countries, the oil and gas industry has a huge effect on them. This is the single industry that can affect every single person in the world by the price fluctuations. While we enjoy the low prices sometimes, on a given day it can drain your pockets very quickly.