The oil and gas industry is the largest in the world. It dominates many national economies, and nearly every government in the world keeps an eye on it to ensure that its people have energy. That means that anyone who wants to understand the world’s economy must study the basics of the oil and gas industry.
Understanding the Importance of Oil and Gas
The world consumes a massive amount of energy every day. People fuel to heat their homes, drive their cars, and power the industry that makes modern life possible. A huge amount of that energy comes from oil and natural gas, which also means that the industry generates a lot of revenue. Thousands of people earn a living from their work with oil and gas. Some nations rely on it as the foundation of their economy. The modern world simply wouldn’t exist without it.
The Industry’s Three Parts
The oil and gas industry is a broad grouping of many specialized businesses. Some of them extract raw materials, while others focus on refining them into useful products. Experts break those businesses up into three main groups.
Some of them are upstream businesses. They form the first part of the production pipeline. Some workers focus on exploring the world to find new oil fields, while others work to extract oil and gas from the ground.
Midstream organizations focus on storing and transporting raw oil and gas. They transport it from the point of extraction to a refinery, many of which are far away from the oil fields.
The downstream operations receive raw materials and turn them into useful products. Gasoline and fuel oil are the most important examples, but they produce a huge variety of other products as well. These businesses also make sure that their products can reach their consumers for use.
The industry’s outlook is good. While it has gone through some rough patches in the past, it has also gone through several years of recovery. Several developing nations are making efforts to expand their production, which is likely to encourage growth. While the oil and gas industry does face some competition from alternative energy, the demand for oil and gas products remains high, and many businesses are still expanding.