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What Is the Oil and Gas Industry?

The oil and gas industry, also known as the energy sector, relates to the process of exploration, development and refinement of both crude oil and natural gas. It is one of the largest sectors in the world estimated at 5 trillion USD and represents a significant part of the global economy.

The biggest companies in this sector referred to as “Big Oil” include ExxonMobil, Chevron, Shell, BP, Eni and TotalEnergies. All six of these companies are vertically integrated within the industry and operate upstream, midstream, and downstream.

The crude oil and natural gas industry impacts just about everything in society from transportation to heating and production to manufacturing. The end products are just about endless, ranging from ink, bike tires, soap and paint to cloths, shower curtains and even toothbrushes.

The top gas producers and top petroleum exporting countries to date are the United States followed by Saudi Arabia, Russia, and Canada.Per Deloitte, the O&G industry earned record profits in 2022 but the companies recognize geopolitical and macroeconomic uncertainty ahead.

The Oil and Gas Industry Includes Three Major Sectors


This category refers to the exploration and production stage in both offshore and onshore operations. The search for oil and gas reserves uses very sophisticated equipment and technology. Typically, this process starts with seismic activity. After desktop analysis and field geology is conducted, an anomaly in the work (geology) could be found that may present an exploration opportunity for the oil company.

This may start with a Seismic survey that gives geologists an idea of what is underground.  Simply stated, it defines the shapes and sizes of the earth’s subsurface. Energy produced by instruments such as a seismic vibrator (on land) or an airgun (in water) releases seismic waves that go through the earth’s layers and bounce-back from different rock layers. This can be 2D, 3D and even 4D imaging.

Next, typically comes exploration drilling if the geology and survey are favorable. This activity can occur anywhere, from the side of a mountain range like the Rockies (Utah – Colorado) to the remote desert of the Sahara or offshore such as in the Gulf of Mexico.

Advances in technologies used for well drilling and completion have enabled the energy industry to reach new sources of oil and natural gas to meet rising demand around the world. These types of drilling and completion technologies have also enabled the recent growth in production from shale (a type of rock formed from mud) and other unconventional oil and gas reservoirs in many parts of the world, using a combination of hydraulic fracturing and horizontal, extended reach drilling.


If you were watching a TV program and stopped it part way, you refer to this pause as midstream. In the Energy sector, midstream companies act in the middle part of the value chain. Basically, it is the safe transportation of crude or refined petroleum products.

This transportation is usually via a pipeline, oil tanker, truck, or rail. With the growing demand for liquefied natural gas (LNG), specialty vessels called LNG Carriers are used to transport this product globally. For this marine transport, natural gas must first be cooled to a liquid to significantly reduce its volume. The LNG requires 600 times less space while kept at -160°C and near atmospheric pressure for efficient transport over long distances.

Midstream operations also treat the product such as to remove water or waste products, compress it and get it ready for various markets downstream. The final destination may be a refining facility, while storage and also be part of the midstream stage.


This is the final stage and refers to the refining, processing, and purifying of the petroleum products.

The sector also encompasses any efforts that are made to market and distribute crude oil and natural gas related products. This includes products such as petrol, gasoline, diesel, oil, jet fuel, heating oil, lubricants, asphalt, waxes, and a plethora of different petrochemicals.

Refineries are the downstream phase of the oil and gas industry. They process the raw crude oil into their end petroleum products. They also sell and distribute natural gas and the products that are derived from crude oil. At this stage, the revenue of all the efforts is finally made by oil and gas companies.

While the three stages are quite different, each plays a critical role in the overall petroleum harvesting process. Together, they create an incredibly valuable fossil fuel which is used to power the world as we know it.

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