• How Does The Oil And Gas Industry Work?


    The recovery happened due to several factors. One of them is the success of the production restraint agreement between OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC countries, which is in force since the beginning of first half of 2017. Other factors that influenced the recovery of the oil and gas markets are the less oil coming to the market from challenged producers and the ongoing global demand growth estimated by the EIA.

    EIA stands for Energy Information Administration, and the global demand growth for 2018 was estimated at 1.6 million b/d.

    Oil and Gas Industry in 2019

    In the latest Deloitte annual survey, they asked oil, gas and chemicals executives the following question:

    The questions resulted with a confidence in recovery, which results with high expectations for increased economic growth, commodity prices and investments overall. This is supported by the increase in energy demand above the average levels, as the US and global economy continue to display strong growth rate.

    Below we can elaborate in more details the top 10 trends in the Oil and Gas Industry, presented by GlobalData researchers.

    Oil and Gas Industry Trends in 2019

    The top oil and gas Stegron Inc industry trends of 2019, were identified by GlobalData researchers, and in their research they use data on online engagement, the number of mentions on Twitter, and different expert analysis.

    The main trend in the Oil and Gas Industry to watch for in 2019, is the Oil and Gas supply. There are several problems that will influence the Oil and Gas supply such as, the problems with Venezuela and Iran, as well as Qatar’s exit from OPEC.

    How Does The Oil And Gas Industry Work?

    The second trend to watch for is the Energy Outlook. In the past couple of years, the input of gas influencers online, industry whitepapers and journalism give a better and more realistic, expert overview of what is happening and future expectations in this sector.

    Energy policies are the third trend listed in the GlobalData research, which includes the decisions, from the US Department of Energy and by other organizations as well. What will influence the oil production in 2019, is the rise of the federal oversight regarding the methane and wastewater, and the return of more autonomy to Oil-production parts in the United States. What can make the situation unpredictable, are the changes to the ranks of OPEC, especially in the part of how the countries manage their energy policies, as well as the political situation in the UK that can affect the policies related with the North Sea oil exploration and nuclear energy in Scotland.

    Many are anticipating the Natural Gas supply to be at the forefront and expecting that in 2019, the global LNG (Liquefied Natural Gas) supply will outstrip demand, for few reasons. One is the development in China, of their own Natural Gas Infrastructure and the investments in LNG imports.

    Next comes, the output of OPEC as a trend. As it has been stated in the beginning of this article, the OPEC has committed to pulling oil from the market. The reduction in oil production, still doesn’t scare many experts in the industry.

    Other identified top trends are related with the Oil Price, Fracking, Oil Demand and inventories of oil, natural gas and goal. You can read more for these trends on the link.

    Oil and Gas Supply Chain

    The oil and gas global supply-chain includes activities such as domestic and international transportation, ordering and inventory visibility and control, materials handling, import/export facilitation and information technology.

    Every Supply Chain in large industries involves configuration, management and continuous improvement of sequential set of operations that includes multiple parties. The goal in Supply Chain Management (SCM) is to deliver maximum service to the customer at the lowest cost possible.

    The Oil and Gas Supply Chain can be analyzed through three different industry sectors:

    • Upstream
    • Midstream
    • Downstream

    Upstream vs Midstream vs Downstream sector

    When somebody wants to describe where a company or a service is in the Oil and Gas Supply chain, they usually use the generic business terms “Upstream” and “Downstream”. As companies or services get closer to servicing the end user, the more downstream they are located in the supply chain.

    Each of these sectors have their own characteristics which will be elaborated in more details, further on in this article.

    The upstream sector is also known as the E&P (Exploration and Production) sector. It is consisted of processes and operations that involve searching for potential underground or underwater crude oil and natural gas fields, drilling of exploratory wells, and subsequently drilling and operating the wells that recover and bring the crude oil and/or raw natural gas to the surface. In recent years, there is an evident shift towards the inclusion of unconventional gas as part of the Upstream sector. This also affects the developments in processing and transporting Liquefied Natural Gas (LNG).

    The midstream sector is usually combined in the literature with the downstream sector. This segment in the supply chain, involves the transportation, storage and marketing of various oil and gas products. Transportation options can vary from small connector pipelines to massive cargo ships making trans-ocean crossings, depending on the commodity and distance covered.

    How Does The Oil And Gas Industry Work?

    When we are discussing the transportation of oil and natural gas, most oil can be transported in the current state, while the natural gas must be liquefied or compressed.

    When it comes to the downstream sector, it encompasses the refining, processing, distillation and purification before turning it into usable, sell-able and consumable products e.g. fuels, raw chemicals and finished products etc. All the afore-mentioned services transform crude oil into usable products such as gasoline, fuel oils, and petroleum-based products. Retail marketing activities help move the finished products from energy companies to retailers or end users.

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