Petroleum Industry:An Overview
New Challenges and Opportunities
Author: Dravya Malik
Petroleum is a fossil fuel which is formed when large quantities of organic matter are deposited as sediments. Petroleum is refined into various types of fuels which comprise the Petroleum Industry or the Oil and Gas Industry. Petroleum contains the following elements: carbon (93% – 97%), hydrogen (10% - 14%), nitrogen (0.1% - 2%), oxygen (01.% - 1.5%) and sulphur (0.5% - 6%) with a few trace metals. Hydrocarbons present in petroleum are mainly alkanes, alkenes and aromatic hydrocarbons. The petroleum industry is vast and its activities extend over all regions of the world.
Every task we perform uses energy in one way or the other. The petroleum industry is one of the biggest contributors to the energy industry, making it the most important industry in the world. The oil and gas industry generated an estimated $3.3 trillion in revenue in 2019. Petroleum is also known as “black gold” due to extreme monetary value of oil and its products. Petroleum in its unrefined form has been used by humans for the past 5000 years which makes the industry involved to be one of the oldest industries in the whole world.
What are the different oil and gas sectors?
The Petroleum industry is divided into 3 key areas:
Upstream sector, also known as the exploration sector, involves all the process from finding and extracting crude oil and natural gas from potential sources. Exploration sites are found using local geology and the presence of a nearby petroleum deposit. The goal of the exploration phase is to exactly locate and estimate whether the location will provide a hefty return in terms of petroleum, for all the transactions involved in different processes. Geophysical and geochemical analysis is done using techniques including induced polarization (IP) surveys, drilling and assaying, electrical currents, and so on. If an area shows potential to host a resource, exploratory wells are drilled to test the resource
Midstream sector involves transportation and storage of crude oil and natural gas. Midstream sector is an integrating part of the petroleum industry and acts as a bridge between upstream and downstream sectors. After the extraction of crude oil and natural gas, they have to be transported to different refineries and plants for turning them into useful products. Transportation can include anything from tanker ships to pipelines and trucking fleets. Midstream sector is considered to be a low-risk sector in the Petroleum industry.
Downstream sector involves filtering and processing of raw materials such as crude oil and gas to convert them into finished products. The main processes include refining of crude oil and purifying of natural gas. After processing, the final products are transported to different retail centres like petrol pumps and other industries which use these products. Some of these products include liquefied natural gas, gasoline, heating oil, synthetic rubber, plastics, lubricants, antifreeze, fertilizers, and pesticides.
Opportunities and Challenges in the Petroleum Industry
Being a vast industry, there are many areas which face challenges but there are other areas also which provide scope for future endeavours.
• Risks and development of Safety Industry: There are many risks in the Petroleum Industry, from fires to gas leaks and many more. Due to the highly flammable nature of fossil fuels, safety in the Petroleum Industry is important. This also gives rise to the Safety Industry, which helps in making the processes involved in the Petroleum Industry less risky.
• Lowering the cost of production: Keeping the cost of production of crude oil and refined products at a lower price is a necessity to stay competitive in the market. This can be only done by increasing the efficiency of the system of production at operational sites and environmental utilities.
• Sustaining to the needs of the world: To continue the supply of crude oil and natural gas. Oil companies need to increase the life of mature sites and look for new sources of oil and gas. The cost for the extraction, transporting, etc. of new sources is very high. The consequences of not adhering to the norms may result in shutting down plants.
• Keeping up with Environment Issues: Petroleum Industry is one of the major consumers of energy and water resources and in the process of utilizing them, it exploits and pollutes them in many ways. Hence they are subjected to various environmental standards. To cope up with these standards, the Petroleum Industry needs to establish new ways of extraction, production and distribution.
• Expansion of Products of Petroleum Industry: The Petroleum Industry has versatile products which can be used in various sectors to increase the efficiency of the industry. The Petroleum Industry also provides opportunities for different other industries to come up with sustainable and renewable forms of energy.
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