Petroleum Industry

Topics: Petroleum, Peak oil, Natural gas Pages: 16 (5359 words) Published: September 21, 2009
PETROLEUM
I. HISTORY
The petroleum industry includes the global processes of exploration, extraction, refining, transporting (often by oil tankers and pipelines), and marketing petroleum products. Petroleum in an unrefined state has been utilized by humans for over 5000 years. Oil in general has been used since early human history to keep fires ablaze, and also for warfare. The largest volume products of the industry are fuel oil and gasoline (petrol). Petroleum is also the raw material for many chemical products, including pharmaceuticals, solvents, fertilizers, pesticides, and plastics. The industry is usually divided into three major components: upstream, midstream and downstream (http://en.wikipedia.org/wiki/Petroleum_industry). Petroleum is vital to many industries, and is of importance to the maintenance of industrialized civilization itself, and thus is a critical concern for many nations. Oil accounts for a large percentage of the world’s energy consumption, ranging from a low of 32 percent for Europe and Asia, up to a high of 53 percent for the Middle East. Other geographic regions consumption patterns are as follows: South and Central America 44percent, Africa 41 percent, and North America 40 percent. The world consumes 30 billion barrels of oil per year, with developed nations being the largest consumers. Taken as a whole; the production, distribution, refining, and retailing of petroleum represents the world's largest industry in terms of dollar value (http://en.wikipedia.org/wiki/Petroleum_industry). INDUSTRY SECTORS

The petroleum industry is divided into five different sectors that include all steps involved in finding, producing, processing, transporting and marketing oil and natural gas.
The first segment is exploration and production also referred to as the upstream segment. This segment involves the exploration and production of oil and natural gas, from cutting-edge geology to high-tech offshore drilling platforms. The U.S. is the world’s third-largest petroleum producer, with more than 500,000 producing wells and approximately 4,000 oil and natural gas platforms operating in U.S. waters (http://api-ec.api.org/aboutoilgas/sectors/).

Second, is the downstream segment also referred to as marketing and refining. This segment includes the nation's 144 oil refineries that process more than 17 million barrels of crude oil every day.  Additionally, the downstream segment includes the transporting of petroleum products by oil tankers from thousands of local terminals to approximately 167,500 service stations across the U.S. (http://api-ec.api.org/aboutoilgas/sectors/).

Next, pipeline is the segment that encompass the nation’s 165,000 miles of pipelines that move crude oil from wells on land and platforms in the oceans to refineries, and then to terminals where fuels are released to retail outlets (http://api-ec.api.org/aboutoilgas/sectors/). 

Marine is the segment that involves all aspects of transporting petroleum and petroleum products by water, including port operations, maritime firefighting and oil spill response. This segment consists primarily of oil tankers.

The final sector of the petroleum industry is service and supply. This segment is an integral part of the oil and natural gas industry. There are more than 10,000 U.S companies that provide equipment, services, supplies, and design and engineering support for exploration, drilling, refining and other operations. The majority of the firms are local, while others are global manufacturers selling products for operations around the world (http://api-ec.api.org/aboutoilgas/sectors/).

MAJOR FIRMS
In the petroleum industry oil companies are categorized as supermajors, majors, independents, or jobbers. The term “supermajors” illustrates the six largest, non state-owned energy companies (http://en.wikipedia.org/wiki/Supermajor). They are as follows: • ExxonMobil

• Royal Dutch Shell
• BP
• Chevron Corporation
•...

References: America’s Oil and Natural Gas Industry. (2009). Retrieved on June 21, 2009, from
http://api-ec.api.org/policy/upload/policy_primer.pdf
June 19, 2009, from MSNBC Web site: http:/​/​www.msnbc.msn.com/​id/​7549530/​page/​2/​
Change and Challenge in the Petroleum Industry
Earnings: Snapshot of Oil Industry Earning: An AP Fact Sheet. (2009). Retrieved June 17, 2009, from Energy API Web site: http:/​/​www.api.org/​statistics/​earnings/​index.cfm
Energy Information Administration
Gasoline Price Surge. (2009). Retrieved on June 6, 2009, from
http://fpc.state.gov/documents/organization/33168.pdf
Industry Profile: Petroleum Refining. (2009). Retrieved June 15, 2009, from First Research Web site: http:/​/​0-indwes.firstresearch-learn.com.oak.indwes.edu/​industry.aspx?pid=155&chapter=4
Industry Sectors
Keat, P. G., & Young, K. Y. (2009). Managerial Economics (6th ed.). Upper Saddle River, New
Jersey: Prentice Hall
Laws and Regulations. (2009). Retrieved on June 5, 2009, from
http://www.epa.gov/OEM/lawsregs.htm
Tax and Trade. (2009). Retrieved June 15, 2009, from Energy API Web site: http:/​/​www.api.org/​
policy/​tax/​index.cfm
Texas Industry. (2009). Retrieved on June 5, 2009, from
http://www.texasindustryprofiles.com/PDF/twcClusterReports/TexasPetroleumRefininga
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