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Oil and natural gas are major industries in the energy market and play an influential role in
the global economy as the world's primary fuel sources. The processes and systems involved
in producing and distributing oil and gas are highly complex, capital-intensive, and require
state-of-the-art technology. Historically, natural gas has been linked to oil, mainly because
of the production process or upstream side of the business. Oil and gas sector comprise
three main activities - upstream (exploration and production), midstream (transportation
and processing) and downstream (distribution and sale to end users/consumers).
The upstream segment of the oil and gas industry contains exploration activities, which
include creating geological surveys and obtaining land rights, and production activities,
which include onshore and offshore drilling.
Crude oil is categorized using two qualities: Density and sulfur content.
Density is measured by API gravity, and ranges from light (high API gravity/low density) to
heavy (low API gravity/high density).
Sulfur content ranges from sweet (low sulfur content) to sour (high sulfur content).
Light and sweet crude oil is usually priced higher, and therefore more sought-after, because
it is easier to refine to make gasoline than heavy and sour crude oil.1 Oil volume is
measured in barrels (bbl), which equals 42 gallons.
There are five phases to the life cycle of upstream oil and gas industry:
1. Explore
2. Appraisal
3. Develop
4. Produce
5. Close