What Makes Up the Oil and Gas Industry?

Oil and Gas Industry

As the demand for energy continues to increase in the world, with industrialization and urbanization still prominent forces in the world, the oil and gas industry continues to remain one of the world’s largest and most important. Despite the calls for a shift towards more renewable energy, oil and gas are still needed to keep up with demand. Furthermore, the economies of many countries and states, such as Oklahoma, are highly dependent on the industry.

Such is the magnitude of the industry that various companies, such as Downhole Products, can build their business simply by supplying a few products to oil companies. In fact, the oil and gas industry itself is made up of various sub-industries that are all large operations on their own.

Here is a breakdown of what makes up the oil and gas industry:

Exploration and production companies

Exploration and production companies are primarily responsible for finding reservoirs of hydrocarbon, which is the naturally occurring form of crude oil and natural gas. Once they have identified sites where hydrocarbon reserves are located, they establish an oil drilling site in order to extract the natural resources from the Earth.

As a result, exploration and production companies are primarily valued by their amounts of oil and gas reserves, even if these have not yet been tapped. Once they are able to extract the oil and gas from the ground, they then sell these unrefined products to refineries that will turn these into gasoline and other energy sources. Hence, the value of exploration and production companies are highly dependent on the amount of oil and gas they can extract from their reserve sites.

Oil and Gas Industry

Drilling companies

Although exploration and production companies are the ones who own the site of the hydrocarbon reserves, they are not responsible for the actual processes of extracting oil and gas from the Earth. Instead, this job falls to drilling companies, who own their own equipment and employ their own drilling rig staff.

Drilling companies are contracted by exploration and production companies to perform the drilling. As a result, unlike exploration and production companies, their earning ability is not influenced by the amount of oil and gas in reserve. Instead, drilling companies are paid by exploration and production companies for their services and charge based on the number of hours they work.

Well servicing companies

Once the hydrocarbon reserve site has been discovered and a drilling site has been set up, there is still a need to maintain the site in order to make sure that oil production can remain at consistent levels. This is where well-servicing companies come in. Well, servicing companies are in charge of the various activities that are involved in maintaining a drilling site.

Some of the activities that are well-servicing companies include logging, cementing, casing, fracturing, and perforating. Given the number of activities that are well servicing involves, this is the reason why it is a completely separate business from oil and gas drilling and production.

Given the sheer magnitude and scope of the oil and gas industry, it is no surprise that a number of services are required to keep it running at its current scale. By bringing in such a large amount of business and jobs wherever it goes, it is clear to see why the oil and gas industry continues to be so influential today.

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