<a href="http://youngpetro.org/2013/03/06/how-is-it-possible-to-produce-oil-from-sand/"><b>How is it possible to produce oil from sand?</b></a> <a href="http://youngpetro.org/2011/10/09/people-engineers-and-spe-members/"><b>People, Engineers and SPE Members</b></a> <a href="http://youngpetro.org/2012/12/19/if-i-were-a-prime-minister/"><b>If I Were a Prime Minister…</b></a> <a href="http://youngpetro.org/2012/12/26/polish-shales-delayed/"><b>Polish shales delayed?</b></a> <a href="http://youngpetro.org/2013/01/11/russia-continues-the-policy-of-states-companies-monopoly/"><b>Russia continues the policy of state companies’ monopoly</b></a>
 

Update on current situation in Oil&Gas Industry and Careers

Update on current situation in Oil&Gas Industry and Careers

Many workers were laid-off from powerful companies such as Halliburton or Schlumberger because of low crude price. Halliburton reported $3.2 billion loss in the second quarter due to breakup fee it paid rival, Baker Hughes. In the second quarter another 5,000 jobs were cut, bringing the total workforce to just more than 50,000 people. Over 35,000 jobs were eliminated in two years which is roughly 40 percent of its total jobs. Chairman and CEO Dave Lesar said that no new job cuts were announced and they are expecting to see a modest uptick in rig count. Schlumberger reported a huge loss and announced the elimination of over 8,000 jobs in the first quarter and about 10,000 jobs in fourth quarter of 2015. More job cuts are possible in July.

Such downturns forced especially mechanics and roustabouts to find new jobs. Fortunately, workers’ flair helped them to find jobs in construction, retail, engineering consulting or chemicals. Some got jobs in agriculture, technology or financial services. Surveys show that many laid-off would not take a job in the oil patch again. Nonetheless, in case oil price goes up many new potential employees will be engaged in massive projects.

 However, those seeking for an opportunity in the North Sea might be a bit problematic as an effect of the uncertain investment environment created by Brexit. One cannot marvel on it, referendum showed that majority is not pleased with England belonging to European Union. It is obvious that a fair amount of money England donated for other countries does not pay off and tosh deputies are concerned about is irrelevant. England does not need an approval from European Parliament to simply decide about Britain’s economy and things such as letting cheap workforce come to their country.

To sum up, current situation in Oil&Gas Industry is not good. Oil market requires a bit of time to retrieve its best. $45 crude price level is already stable and some experts claim that it may rise up to $60/bbl in coming months.

Sources:

Fuelfix.com

Houstonenergyinsider.com

Big money at play and new workplaces in the Beaufort Sea?

Big money at play and new workplaces in the Beaufort Sea?

The Inuvialuit Regional Corporation, organization established by the agreement between the Government of Canada and the InuvialuitInuit of Canada’s Western Arctic people, says that Beaufort Sea Oil and Gas Licences shouldn’t be held foreverLocal institute believes that the federal government should allow corporations to extract hydrocarbon reservoir discovered in this region over 50 years ago! They are consider that it could change the lives of the local population. 

The problem is that the companies want to change contract that their nine-year licences to explore for oil in the deep waters of the Beaufort Sea can be extended to 16 years. Corporations also explain themselves that they have too little time to complete the necessary documents and to work out optimal for this region extraction technology. Companies know that there is a lot of money because of that Imperial Oil and BP gave the government security deposits about $445 millions. Federal goverment agreed with it provided that there will be drilling in otherwise a part of this amount is lost

However, the situation in this area is much more complicated. The facts are that companies currently hold the rights to 48 significant discoveries covering almost 200,000 hectares in the Beaufort Sea, but there is no oil production.

Where is the real problem? Maybe, according to the Northern Oil and Gas Report, some discoveries may not be immediately economic to produce because of the lack of optimal technology? Perhaps the reason is the lack of agreement between federal government and comapnies? We have no answers to these questions. Undoubtedly oil production in the Beaufort Sea would help the oil industry in the fight against the crisis and for the ‘Young Petro People’ means new workplaces which is very positive information. 

Sources: www.cbc.ca

              www.oilandgaspeople.com

Image: www.news.utoronto.ca

Gas Condensate Banking Effects

Gas Condensate Banking Effects

Gas condensate reservoirs have been classified between volatile oil and wet gas reservoirs. It means that the reservoir temperature is between the critical temperature and the cricondentherm (maximum temperature at which gas-liquid phases can coexist). Gas condensate reservoirs exhibit a complex behavior due to the existence of a two-fluid system (it is a single-phase fluid at original reservoir conditions) composed of reservoir gas and liquid condensate. When the pressure of the reservoir falls below dew point due to production, the original single-phase (gas phase) literally disappears because of the formation of condensates (liquid phase). The behaviours of such systems are complex and still not fully understood, especially in the near-wellbore region, where the largest pressure drops occur. It is important to mention that two kinds of gas condensate reservoirs exist: rich gas condensate reservoirs (e.g. Alen field – Equatorial Guinea) and lean gas condensate reservoirs (e.g. Arun field – Indonesia, Camisea field – Peru).

Gas Condensate Blockage

Condensate banking formation is a major problem when producing gas condensate fields. From the first day a gas condensate field is being produced, heavy components (valuable components) in the reservoir condense near the wellbore and continue growing over time. These condensate liquids are formed because the reservoir pressure falls below dew point (point where the first drop of liquid appears), and reduce the productivity over time. Productivity losses of around 50% (or even more) have been registered. Taking for example the case of the Arun field in Indonesia, where after 10 years of production a significant loss in well productivity occurred.

In technical literature, many authors proposed the existence of flow regions (from 2 to 4). Beyond the discussion of the existence of 2, 3 or even 4 flow regions in the reservoir, in this article we will focus only in the near wellbore region, where the principal phenomena occur due to condensate banking. Generally speaking there are two main factors that affect well deliverability when producing gas condensate reservoirs: Coupling and Forchheimer effects.

In the near wellbore region, where the gas flow rate is higher, an important effect called Forchheimer effect appears which produces higher pressure drawdown which results in major gas condensation that fills up the pore throats, and  consequently the gas relative permeability is reduced, decreasing the well deliverability. However, when condensation reaches a critical saturation, a “positive effect” occurs, which is called the coupling effect, that essentially explains the increment of the condensate relative permeability with increasing velocity and decreasing interfacial tension.

The evidence is overwhelming, it does not matter whether it is a rich or lean gas condensate reservoir, with production over time, the quantity of liquids in the near wellbore region will increase, affecting the well deliverability which is translated as a reduction in the production. Working to avoid a high pressure drawdown in retrograde gas condensate reservoirs has become an important topic today.

An Essential Skill Many Graduates Lack

An Essential Skill Many Graduates Lack

What comes to mind when we talk about skills future employers want to see in recent graduates is; communication, problem solving, leadership, creativity, and adaptability skills. While such skills are undoubtedly in demand, an essential skill many employers want graduates to have which you might not even have thought about is called quantitative reasoning skill. You are probably wondering what quantitative reasoning skill is all about? To give you a little bit of understanding, consider the following example:

You are given a calculation based question to solve, and you are asked to take a decision based on the result you get from your calculation. The decision might be to either invest in a new business opportunity or not, or to choose a product based on the product’s price and quality and the list goes down. The skill required to take such decisions is called quantitative reasoning.

What is quantitative reasoning skill?

Quantitative reasoning skill ( QR ) is the ability to understand and use quantitative information to come to a solid conclusion. It involves the application of basic mathematical, and critical thinking skills to draw justified conclusions from facts and evidence available at hand. QR is considered among the most important intellectual skills such as communication fluency, information literacy, and analytical thinking that all university graduates should acquire.

Why QR is so important?

The importance of QR skill comes from the fact that it is a real world skill that future employers want you to have. Whether you are taking engineering, science, or even arts major, quantitative reasoning is a skill everyone need these days. There is no major I can think of that does not need a quantitative understanding. Whether you are still student, recent graduate or even having a career right now, cultivating this skill is a crucial factor that will determine how successful you will be.

But, do all graduates have this important skill?

As a recent graduate, I can tell you the answer. Not all students who graduate have this skill. And even those graduates who have QR skill, it may not be as strong as required by employers. The issue comes down to few reasons. First of all, students are often not informed by the academia about the importance of this skill in their career readiness and life in general. Therefore, they can not develop something they do not know its benefits for them or why they need it in their career.

The second reason is the misconception that QR skill is already thought in math classes. The truth is, there is a huge difference between QR and math. It is true that QR utilizes the basic mathematical skills in getting the calculation result, however it is more about the meaning of the calculation results rather than how to perform the calculation itself. As a result, academic subjects are more into recalling math procedures rather than encouraging students to think critically about problems in real-life contexts.

How do you cultivate and develop QR skills?

For you to have the ability to understand and use statistical data to make informed decisions, you must first have a sense of numbers, measurements and what they really represent. This is due to the fact that your accurate sense of numbers and measurements backed by a strong mathematical knowledge base is what will enable you to make accurate conclusions.

Once that put in place, the next step is to practice quantitative reasoning in diverse settings. Find problems that require you to think critically, analyze data, interpret numbers to reach decisions based on those results you get from solving such problems. A better way is to practice solving problems in real-life contest. That means taking problems from current real-life events. This will surely motivates you to go beyond recalling procedures and solving mathematical problems to think critically about the result you get and relate what you learn to the real life.

As a student or recent graduate or even having an entry level career, you need QR skills more than any other skills in your daily life and your career readiness. Strong quantitative reasoning skills will allow you to make sense of complex situations in your everyday life and enable you to make informed choices and decisions. It is never too late to learn something new, if you have that skill, make it better, and if you do not have it, go and cultivate it.

The O&G Industry Downturn: What It Means For Recent Grads? And How To Survive It?

The O&G Industry Downturn: What It Means For Recent Grads? And How To Survive It?

It was June 2014 when the oil and gas industry started to experience a downward market. Oil prices fell sharply to around $70 per barrel by November 2014, and this marked an end to a four-year period of price stability above $100 per barrel. Besides the geopolitical and economic factors responsible for the drastic change in oil prices, the prominent factor for the crash of oil prices was the unbalance between supply and demand.

According to the December 2014 monthly update of the United States Energy Information Administration ( EIA ), there was an increase in supply of liquid fuels by 1.8 million B/D to 92 million B/ in 2014, whereas demand did not keep pace. The global demand was low due to high oil prices for too long and low economic activities. On the other hand, supply was up because of U.S. shale oil boom, and the return of Libya’s production. Decreased demand and increased supply directly leads to low oil prices.

It was expected that the Organization of the Petroleum Exporting Countries would play its conventional role of protecting the oil prices by reducing its quota to balance the supply and demand as it always did. However, what OPEC did was totally the opposite. OPEC decided to not cut production in a new strategy to protect its market-share. Consequently, the O&G industry was dealt a crushing blow. The crash in oil prices has led to many layoffs, spending cut backs, project deferrals, service price deflation, renegotiation and significant delays at major projects and this officially announces that the O&G industry is in a downturn.

What The Downturn Means For Recent Grads?

The crash in oil prices especially after November 2014 -when OPEC decided to stick to its market-share strategy- has led to many layoffs from both operating and service companies along with a slowdown in the hiring activities or completely putting a freeze on hiring. As a consequence, many O&G professionals have lost their jobs and fresh graduates are finding it extremely hard to secure a job in an industry they spent four years earning an entry ticket to.

The increase in the number of people seeking jobs -both due to the current layoffs that left many professionals unemployed and recent graduates- accompanied with few or no job postings from O&G companies has undoubtedly made 2014 a pivotal point where a transition in the market type from “candidate-driven market” to a “client-driven market” took place.

In a client-driven market where demand for jobs is much higher than what is being offered, the competition is extremely high and the possibilities of securing a job is much lower especially for recent graduates. Job applicants with experiences and job training are more preferred than recent graduates in such a market. This is due to the fact that the value they add to the company comes much faster than what fresh graduates do, and this is due to the longer time required to train fresh graduates.

Even in the case of fresh graduates job openings; in a client-driven market, O&G companies are at an advantage of having a chance to choose the best candidates with even less salary. This is due to the fact that in a client-driven market, many applicants compete over few job openings unlike in a candidate-driven market where prospective candidates are currently working, and there is a need for new workforce which gives an advantage for any applicant to get the job with less competition.

Low oil prices and its consequences on the hiring activities has also driven many petroleum related courses’ graduates to either divert into different industries -sometimes not even related to their field of study- or spend their time at home doing nothing other than killing time waiting for the market to recover. It is true that fresh graduates and professionals who lost their jobs due to the crash in oil prices are experiencing a bad time, but this is the price to keep the industry going and guarantee an even-keeled revenue stream and business sustainability.

How Can Recent Grads Survive The Downturn?

It is important to keep in mind that the oil and gas business is boom and bust by nature, this is not the first price bust in the O&G industry and definitely will not be the last. A similar downturn occurred in the late 1980s through the 1990s and the most recent downturn occurred in 2008. Downturns are harsh realities that can not be avoided as it is the nature of this business. What you can do as a recent graduate who is passionate about this industry is to navigate the industry during the downturn in the following ways:

1- Keep in mind that it will get worse before it gets better as the current events in 2015 are indicating signs of no price recovery such as the continuous increase in production from Iraq, Iran and Libya and few other countries, China’s dramatic slowdown, refining maintenance season which is about to begin soon, Greek crisis and lifting sanctions from Iran. Knowing that things will get worse will ignite the fire within you to take the following advice seriously and work hard.

2- Get informed about the current events in the oil and gas industry. Know where layoffs happened, which sectors are more affected and which are still having employment activities and apply for them. Besides, knowing where new projects are taking place will help you to increase your possibilities of getting a job by applying for jobs in response to the need.

3- Diversify. This means keeping your petroleum engineering skills broad. It doesn’t matter what your focus is or what your final year project was, you should learn about other engineering disciplines, and read more. It also means cultivating new skills that will surely set you apart from the rest of your peers.

4- Widen your connections. This is a very crucial point not only for getting a job, but also for your career development and success. Create a LinkedIn profile if you do not have one, make it professional, start adding people and network with them. Attend conferences and events related to your industry. All those will help you widen your network, which comes with an advantage of increasing opportunities.

5- Volunteering. Volunteering during a downturn has career benefits. Apart from enhancing your industry network which surely can help you get a job, it develops your leadership skills, provides a résumé boost, and it gives you access to technical information. Never underestimate the outcomes of any volunteer activity even if it is not related to your field of study. Just go for it, and learn. Chances are, it will pay you back later.

6- Get a job that will help you be independent and support you to make a living. It does not matter where as long as you work, and make money. And if you can afford to further your education, do so. This adds value and helps increase your chances of getting a job later especially if you further your study in business administration, finance and so on.

The downturn is going nowhere at least for the end of 2015, and it is your decision how to react to that. If the O&G industry is your passion, I trust you will fight and win the battle. But before that happens, a lot must be done, so start now.

Corrosion and it’s remedy

Corrosion and it’s remedy

In simple words corrosion is defined as ruination of material because of its reaction with environment. It should be made clear here that for corrosion material does not have to be metal only and this vast term is not restricted to metals alone. On the other hand ruination of wood, rubber and paint due to exposure to sunlight is also considered to be corrosion.
Stress Corrosion Cracking (S.C.C) happens when mechanical stresses occur in the presence of corrosive environment and this phenomenon can cause serious problems. It is common observation that corrosion is always detrimental but interesting fact is that in some cases corrosion is beneficial and desirable like while anodizing of aluminum used to obtain a protective corrosion product on the surface and uniform appearance.
Chemical machining is widely used in aircraft’s industry. In this process unmasked areas are subjected to acid treatment and excess metal is dissolved. This process is adopted in situations where parts are hard and difficult to machine. Analysis of corrosion in Oil & Gas industry is of prime importance because of two main reasons:
1. To maintain continued and extended production to avoid loss of revenue.
2. To avoid catastrophic failures of facilities and avoid irreparable loss of life.
To control corrosion many industries are spending several billion dollars so one can realize the devastation caused by this phenomenon. Corrosion can be classified as either Sour or Sweet depending upon environments. Usually sour corrosion is caused due to the presence of high sulphur contents and its compounds in oil and gas industry.
Most common corrodents are:
1. Acid gases
2. Brine
3. Aggressive soils
4. Anaerobic bacteria
To control corrosion following corrosion measures may be taken:
1. Chemical Inhibition
2. Chemical Control (removal of dissolved gas)
3. PH control
4. Oxygen Scavenging
5. Cathodic Protection
6. Thickness measurement (Ultrasonic thickness meter)
7. Control of physical factors (Shocks etc)
It is important to calculate cost effectiveness of any of corrosion control measures before applying it and this can be calculated only in case of proper monitoring, the effectiveness of corrosion control program can be judged only in case of its proper monitoring.
At the end in Oil and gas industry it is difficult to total elimination of corrosion one can feel comfortably satisfied if the rate of corrosion is retarded up to safe extend.

 

References:

http://www.npl.co.uk/upload/pdf/beginners_guide_to_corrosion.pdf

http://www.npl.co.uk/upload/pdf/basics_of_corrosion_control.pdf

http://www.ce.berkeley.edu/~paulmont/241/Corrosion.pdf

2. Defining oil reservoir: Oil lake under the surface or a sponge made of rock filled with oil?

2. Defining oil reservoir: Oil lake under the surface or a sponge made of rock filled with oil?

After reading last article you should have a good understanding of the types of companies in the industry. As it was mentioned there, petroleum industry is commonly divided into three sectors: upstream, midstream and downstream.
The upstream sector (better known as E&P sector – Exploration and Production) contains all tasks and operations which deal with bringing oil and gas to the surface. It includes searching for the potential underground crude oil or natural gas fields, drilling exploratory wells and then drilling wells that bring oil.
The midstream sector deals with marketing of the unrefined products: storing in tanks, terminals, salt caverns, creating intermediate products and sending them to refineries through pipelines, long-distance transporting, delivering refined products to distributors.
The downstream sector (also known as refining) deals with all processing hydrocarbons, distribution of commercial products received from oil and gas.

We can now properly describe oil life in 6 points.
1. Oil reservoir.
2. Extraction.
3. Long-distance transport.
4. Refinery.
5. Delivery of refined products.
6. Fuel stations.

Concentrating on the first point, what actually is oil and gas reservoir? Most of you, like me first imagined it as a big lake filled with oil, hidden somewhere under the ground. Wrong? Looking to the dictionary you will find that it is “a subsurface pool of hydrocarbons contained in porous or fractured rock formation”, so the world “pool” can bring the image that petroleum is hidden in “pools” or “lakes” in the caverns under the ground. In fact it more reminds a rock sponge, but since we can’t physically see what is under the ground, drilling companies take core samples of the reservoir to measure rock properties such as porosity and permeability. Core samples are cylindrical sections of rock which are inspected and analyzed by geologists and petrophysicists in specialized labs. As we observe part of the rock carefully, we will see that a reservoir rock has spaces which can be filled with fluids, property which describes number and size of the paces (pores) is named porosity. However, to let petroleum flow, the rock must also have appropriate permeability. Permeability is really an expression about how the pores are connected.


Image source

As temperature and pressure are changed during production, fluids in pores decompress and flow into the well. It is fundamental to understand more advanced topics we are going to go through.


Image source

Unconventional reservoirs has less permeability than conventional ones. Unconventional gas reservoir is an accumulation of the same natural gas as we use in gas stoves for years. Natural gas is a mixture of hydrocarbons (mostly methane – about 90%) and sometimes a small amount of hydrogen sulfide, carbon dioxide and other components.
There are 3 types of unconventional gas reservoirs:
• Shale gas
• Tight gas
• Coalbed methane (Link here you can read more about coalbed methane)

Unconventional oil haven’t been yet strictly defined, but according to definition it is “a type of petroleum that is produced or obtained through techniques other than traditional oil well extraction. Unconventional oil production is commonly seen as more costly than conventional oil production, less efficient, and is likely to cause more environmental damage.” More about the types we are going to discuss later.

In the next article we will try to find out how is petroleum and natural gas formed and name basic drilling string components.

Sources: wikipedia, investopedia
Main Image source: dleng.info

1.Integrated vs service oil companies here you can read 1st part.

Life of the oil field

Life of the oil field

Today, I am going to describe a life of the oil field. Probably the topic is obvious and well known but the basic knowledge is worth to be repeated. Oil field is a region with a large number of boreholes extracting petroleum. Oil fields typically occupy large areas up to several hundred kilometers in width, so the total utilization of the deposit is possible only thanks to location many boreholes around the area.

Before starting exploitation of the deposit, firstly of course we have to discover it, and make inventory of resources. Promising geological formations are examined by analyzing the propagation of the artificially generated seismic waves in the earth’s crust. Test drilling are performed, and then we can start extraction. At the beginning crude oil is readily available and it is easy to increase production. Later, it is more complicated: we have to pump it, squeeze out of the ground by introducing water and gas into the reservoir – production will be stabilized and then will be decreased.

Advanced mining and drilling techniques allow very efficient exploitation of the deposit of oil. Several decades ago it was normal to extract approximately 20% of the deposit. But today we can exploit even more than 50%. The specific value depends on the type of oil layer, the deposit and other factors like porosity, permeability, etc. Regardless of the type and the efficiency of the mining methods, there remains less and less crude oil in the deposit. In the extracted crude oil is also more water. When the amount of water becomes too large (eg. 99%), we should abandon wellbore. Gradually we will turn off the exploitation of the oil wells. The typical lifetime of an oil field is a several / a few dozen years and depends largely on intensity of exploitation. Deposits which are intensively exploited (particularly with the use of horizontal wells enabling rapid pumping of oil) reach “end” much faster. Also decrease of production of such a deposit is characterized by a rate of over a dozen percent per year, in contrast to several percent per annum for deposits exploited using “classical” methods.

The world is full of old, abandoned oil sites. Once there were lively places, giving employment to thousands of people, providing energy throughout the countries. Today – there are only abandoned, decaying remains of old wells, pumps and destroyed infrastructure.

And what’s more? Any questions? I urge you to search on!

INiG3

Sources: anz.theoildrum.com, oilfield.com

The Story of Oil Sand

The Story of Oil Sand

Is it possible to produce Oil from Sand? Yes!
Canada has 3rd largest Oil reserves in the World and 97% of Oil reserves are tapped in sand called “Oil Sand”. Out of “173 Billion Barrels” of oil reserves “167 Billion Barrels” are present in the Oil Sands.
So here Question comes what are Oil Sands?
Basically Oil Sands are naturally occurring mixture of “sand, clay, water and bitumen” lies in the category of Unconventional Petroleum deposits. According to National Energy Board of Canada Bitumen main component of oil sands which can be refined into diesel fuel is defined as “A highly viscous mixture of hydrocarbons heavier than pentanes which, in its natural state, is not usually recoverable at a commercial rate through a well because it is too thick to flow”.
Canada’s oil sands have drawn attention for more than 200 years. Historical background date back as far as 1715, when “James Knight”, wrote in his journal about “gum or pitch that flows out of the banks of a river” (The Athabasca). Efforts to exploit the oil sands resource began in the early 20th century.
Oil sands are recovered using two main technical methods:
1. Open Pit Mining
Large shovels scoop the oil sands into huge trucks which transfer it to crusher.
Large pieces of clay are broken down at crusher units.
Oil sand is then mixed with water & transported to plant via pipeline.
Bitumen is separated from other compounds.
Recovery rate through this process is 90% —— useful & cost-effective.
20% Oil sands are present close to earth’s surface.
2. In-Situ Drilling
In situ drilling accounts for 80% of oil sands reserves because mostly these reserves are located below 200ft from surface.
Advanced technology (Directional Drilling) is utilized to inject steam, combustion or other sources of heat into the reservoir which warms the bitumen so it can be pumped to the surface through recovery wells.
Majority of in situ operations are performed through steam-assisted gravity drainage, or SAGD.
Steam is pumped underground through a horizontal well to liquefy the bitumen, which is then pumped to the surface through a second recovery well.
Recovery rate is 50—65%
Another method is Cyclic Steam Stimulation in which steam is pumped down through a vertical well to liquefy the bitumen, which is then pumped to the surface through the same well.
Recovery rate is 30—-40%.
Crude oil which is derived from the oil sands is usually sent to refineries across North America to make gasoline, diesel, aviation fuel and other consumer products and then utilized commercially.

http://www.oilsandstoday.ca/whatareoilsands/Pages/RecoveringtheOil.aspx
http://www.oilsandstoday.ca/whatareoilsands/Pages/History.aspx
http://www.oilsandstoday.ca/whatareoilsands/Pages/QuickFacts.aspx
http://www.oilsandstoday.ca/whatareoilsands/Uses/Pages/default.aspx
http://www.canadiangeographic.ca/magazine/jun08/feature_tar_sands.asp
Image Source Oilandgasiq.com

1. Integrated vs service oil companies.

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.


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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