Upstream vs. Downstream Oil & Gas Operations: What’s the Difference?

Upstream vs. Downstream Oil and Gas Production : An overview

The terms upstream and downstream oil and accelerator production refer to an oil or flatulence company ‘s location in the provide chain. Companies in the oil and natural gas industry are normally divided into one of three groups, upstream, downriver, and midstream. Some companies are considered to be “ integrated ” because they combine the functions of two or three of the groups .

Upstream oil and accelerator production is conducted by companies who identify, excerpt, or produce bleak materials. Downstream oil and gas production companies are close to the end user or consumer. here ‘s a count at upriver and downstream oil and boast production, their person functions, and what function they play in the broader supply chain.

Upstream Oil and Gas Production

Upstream oil and natural gas production and operations identify deposits, drill wells, and recover raw materials from underground. They are besides much called exploration and product companies. This sector besides includes associate services such as outfit operations, feasibility studies, machinery rental, and extraction of chemical add .

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Key Takeaways

  • Upstream and downstream oil and gas production refer to an oil or gas company’s location in the supply chain.
  • Upstream oil and gas production is conducted by companies who identify, extract, or produce raw materials.
  • Downstream oil and gas production engages in anything related to the post-production of crude oil and natural gas activities.
  • Midstream links upstream and downstream and includes transportation and storage services.

many of those employed in the upstream part of the industry include geologists, geophysicists, service rig operators, mastermind firms, scientists, and seismic and drill contractors. These people are able to locate and estimate reserves before any of the actual drill activity starts .

China National Offshore Oil Corporation and Schlumberger ( SLB ) are examples of large companies that focus on upriver services. many of the largest upstream operators are the major diversify anoint and accelerator firms, such as Exxon-Mobil ( XOM ) .

Downstream Oil and Gas Production

The closer an anoint and boast caller is to supplying consumers with petroleum products, the far downriver it is said to be in the industry. Downstream operations are oil and gas processes that occur after the production phase to the point of sale .

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Upstream And Downstream Oil And Gas Operations

This sector of the petroleum and flatulence industry—the final dance step in the product process—is represented by refiners of petroleum crude petroleum and natural flatulence processors, who bring available products to end users and consumers. They besides engage in the marketing and distribution of petroleum anoint and natural accelerator products. Simply put, the downstream petroleum and boast market is anything that has to do with the post-production of crude vegetable oil and natural boast activities .

many of the products that consumers use every day come directly from downriver production, including diesel, natural boast, gasoline, heating petroleum, lubricants, pesticides, pharmaceuticals, and propane .

Midstream operations link the upriver and downriver entities and largely include resource transportation and storage services for resources, such as pipelines and gathering systems. Companies engaged in the downriver serve include anoint refineries, petroleum product distributors, petrochemical plants, natural gas distributors, and retail outlets. many major downstream companies are besides diversify and engage in all levels of the production serve. Examples of downriver companies include leading U.S. refiners Marathon Petroleum ( MPC ) and Phillips 66 ( PSX ). Phillips 66 was initially character of rear company ConocoPhillips ( COP ) until the larger oil company opted to spin off the downriver commercial enterprise in 2012.

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