1. Integrated vs service oil companies.


Have you ever considered a career in the oil and gas industry? For the next couple of weeks, YoungPetro will be releasing series of articles related to the oil and gas industry. The purpose of these articles is to generate general understanding and present you basic technical aspects in terms that everyone can understand. This will be a great resource for gaining knowledge. Stay posted!

We live in times when there are so many sources of energy available for us, but indeed oil and gas are still on the top. Due to its high calorific value, easy transportability, and abundance, oil has been the world’s leading source of energy since the mid-1950s. Oil is the product of prehistoric organic material, compressed over geological time. Once produced, crude oil undergoes refining to create such widely-used products as gasoline, diesel, and heating oil. Without a doubt, oil’s transformation into these useful products brought incredible advancements in world’s energy and bring demand for oil companies.

Today we are going to concentrate about the types of oil companies: integrated oil companies and service companies, and differences between them. Integrated oil companies are the large ones which names may sound familiar to you (for example: Chevron, Shell, BP). They engages in exploration, production, refinement and distribution area. Given the high entry cost relating to many operations, they are world’s largest oil and gas companies. Generally, integrated companies divide their operations into 3 categories: upstream which includes all exploration and production efforts, midstream which is based on storing and transporting and downstream which is confined to refinement and marketing actions. Also, there many different non-integrated, smaller companies that focus on exploration and/or production and then sell their results or unrefined product to companies that specialize in refining or to the integrated companies. Most of integrated companies focus on upstream and downstream and leave refining to other special, smaller companies that deal only with midstream sector.
In conclusion, integrated oil&gas company participates in every aspect of the oil and gas business, which includes discovering, producing, refining and distributing oil and gas (or engages another company for certain aspects). An integrated company organizes its tasks and operations into categories: upstream, midstream and downstream.

Image source

Oil service companies don’t look for, transport or sell oil and gas, but provide services to companies that do these operations. They might upgrade technology, drill wells, do evaluation, completion, sell devices, provide software or even ensure security for workers. First and second place in World’s Top 10 biggest oilfield services list belongs to Schlumberger and Halliburton.
Once again, oil service companies are those ones that provide services to the petroleum exploration and production industry but do not typically produce petroleum themselves.
Now as you know who can you work for, the next article will discuss the major sectors of industry, describe oil and gas reservoir, explain the difference between conventional and unconventional resources.

Sources: investopedia.com, oilandgasiq.com, instituteforenergyresearch.org
Main image source: valuewalk.com

About author

Agata Gruszczak

Editor in YoungPetro, fourth year student of Mining and Geology at the Faculty of Drilling, Oil and Gas at AGH University of Science and Technology, member of AGH UST Student Chapter. Interested in enhanced oil recovery and unconventional resources. Keen on Scandinavian culture, reading fantastic literature.

View all posts by Agata Gruszczak