Oil and Gas Supply Chain: Upstream, Midstream, and Downstream
For every time you visit a petrol station to fuel your tank or use the cooking gas in your home, you make up the final piece of a long supply chain. The oil and gas industry comprises of different components and each one compliments the other; just as the human body comprises of different members that work together.
This article will address the three major components of the oil and gas industry: Upstream, Midstream, and Downstream.
The upstream sector of the oil and gas industry covers the exploration, development, and production of crude oil and natural gas. This sector is often referred to as the “Exploration and Production” (E&P) section. Some of the activities involved in the upstream sector are: searching for areas underwater containing crude oil/natural gas, recovering them and storing them before bringing them to the surface. It also covers the drilling of exploratory wells. The upstream sector contains processes that are quite complex when you compare them to the other sectors. This is because they happen under hazardous conditions.
Another key point to the upstream oil and gas sector is that it is heavily regulated by the government. Regulations exist to prevent major disasters such as oil spills.
Now that the produced crude oil has been stored in tanks, it needs to be transported to refineries for further processing to produce even more valuable products. Some of these products include aviation fuel, kerosene, liquified petroleum gas, etc. that will be useful to the end user. The activities that happen between transporting the crude oil from upstream storage tanks to the refineries are lumped together as the midstream sector operations.
However, the reason why the midstream is not as popular as the upstream or downstream sectors is that some of the midstream activities can be added to either of the upstream or downstream. The major activities of the midstream sector are the transportation and marketing of wholesale products.
This sector covers the main business activities such as refining crude oil to producing valuable products. It also covers marketing and selling these products to commercial and end users. Some of the processes involved in the downstream sector are refinery planning, marketing, sales and billing plans, etc. Proper planning has to go into the supply process between when the refined products leave storage to the commercial and end users.
Marketing of the finished products is a big deal. It would require a team of dedicated workers who will be able to spread the word of the company’s goods.
The oil and gas industry is wide and complex hence the reason it is broken down into various smaller sectors. These sectors are further broken into sub-components. However, being a master in one sub-component is all you really need. You can then go on to become an industry expert in that field. For a list of some of the courses you can start with, visit www.globatskills.com/services or send us an email: firstname.lastname@example.org