Introduction to the Oil and Gas Industry
The oil and gas industry is the industry which deals in business of exploring, extracting, refining, and selling petroleum and natural gas products. On one hand we have Petroleum products which include fuel for transportation (gasoline and diesel fuel), heating and electricity generation, and raw materials for the petrochemical industry. On the other hand, we have Natural gas which is often used for electricity generation and as a raw material in the chemical industry.
People looking to switch to this industry are very likely to get baffled by the technical terms. Therefore we will understand the fundamentals first.
How Does the Oil and Gas Industry Work?
There are three major sectors of the Oil & Gas Industry – Upstream, Midstream, and Downstream.
Companies in the Oil sector that operate in the upstream sector are also called E&P companies as they explore the world for oil reserves and produce oil & gas. Upstream activities include exploration and production of oil and gas.
Once a resource is discovered, it is stored and transported to a refinery by midstream companies.
Refineries, which belong to the downstream segment, turn it into a finished product and sell it to the final consumer. Activities in Downstream sector include refining, marketing, and distribution of petroleum products.
Importance of the Oil and Gas Industry
India’s economic growth is largely dependent on its energy demand. In 2022, Oil & Gas industry’s growth went up to $5 trillion and India retained its position as 3rd world-largest consumer of Oil in the world.
Current Trends in the Oil and Gas Industry
- The industry is expected to attract $22 billion in domestic and foreign investment.
- India is planning to double its refining capacity to 450-500 million tonne by 2030.
- Oil demand in India is projected to register a 2x growth to reach 11 million barrels by 2045.
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