It takes a lot of planning and processing to bring crude oil or natural gas to the marketplace. Oil, in general, is composed of the remains of dead organisms, such as plants and plankton, deep underneath sedimentary layers of soil. It’s how these organisms are affected by heat and pressure that turns them into crude oil or natural gas. Light pressure and heat make crude oil, while high pressure and intense heat produce natural gas. In general, there are three sectors of the oil and gas industry.
The Upstream Sector
The first sector of oil production, known as the upstream sector, involves locating below ground crude oil deposits and oil fields. This stage takes a great deal of patience and effort and often requires the help of geologists. Vibrations are sometimes sent into the ground, in areas where deposits are believed to exist, to test for the presence of crude oil. Once these have been discovered or located, oil rigs are built in these areas to explore the nature and quality of the subterranean deposits. If all goes well and the deposits appear to be of the lucrative variety, drilling can begin to bring the crude up to the surface.
The Midstream Sector
The midstream sector of oil production involves the shipment of crude oil from the oil rigs to refining operations or to storage facilities where it’s held until it can be processed. Other times, it might be stored to sell to other oil manufacturers, who then become responsible for processing it. Crude oil is transported via underground pipelines, oil trucks, oil barges and oil trains through specific railways. Crude deposits are often found in the most remote parts of the world, so delivering and using the heavy machinery to these locations is expensive and time-consuming.
The Downstream Sector
The downstream sector of oil production has to do with the refining of petroleum crude oil as well as the processing and purification of natural gas. It also involves the production of petroleum-based goods as well as fuel to power vehicles. Petroleum-based products like petroleum jelly, plastics, waxes, lubricating oils, diesel fuel, heating oil and many more are produced within the downstream sector. The marketing and distribution of these products is a fundamental factor within this sector.