With the rise in the demand of the global energy, the oil and the gas industry has a range of challenges and opportunities in the global market. It is known to be the biggest industry in the world, in terms of the value of dollar. The industry of oil and gas is the powerhouse of the world which provides employment to more than thousands of workers all over the world. It also generates more than billions of dollars all over the globe every year. The industry of oil and gas is mainly divided into three areas: Upstream, midstream and downstream. The upstream components mainly search for the underwater or the underground gas and oil fields and drilling of the wells (Yusuf et al. 2014). The downstream mainly refers to the filteration of the raw materials that are being obtained during the upstream process.
The use of natural gas and oil is having a long history over thousands of years. Industries of oil and gas have played a vital role history of the world. The cultures of the ancient days had used the crude oil as a substance to bind some materials or as a seal to reducing the leakage of various substances. Around 5000 years before, the Summerians had used asphalt for laying mosaics in making the walls or floors (Wan, Huang and Craig 2014). The Mesopotamians also used bitumen for lining the water canals, sealing the joints of the wooden boats and for building the roads. The Chinese people are the first who discovered that there are many underground deposits of oil in the salt wells. They made bamboo pipelines for drawing the oil and natural gas from the wells which are then used for lighting. The Romans uses the oil in the flaming containers which are then used as a weapon in the war. They also use the oil deposits for lighting the lamps. The using of oil and natural gas has a big importance which can be seen clearly when we look back into the history over thousands of years ago.
The structure of oil industry is divided mainly into three sections:
Upstream – The upstream part consist of searching of the underground raw petroleum and gas fields, well of oil, and accordingly work for boring those wells that recuperate and extract the raw gas and the crude petrol to the surface. A critical move was taken towards the bringing of the raw materials including eccentric gas by the help of the upstream segment, and describing the improvements in the handling Melted Petroleum Gas (LNG) and transportation (van Goor and Scholtens 2014).
Midstream – The area of the midstream includes the transport of the gas or oil through means of pipes carrying the oil, oil tanker, truck, rail or freight ship, stocking, and concession of the refined or the unrefined oil. Pipes and some of the other transportation can be used for moving the raw petroleum from the place of extraction to the refineries and passes different types of the refined items to the downstream sectors (Shuen, Feiler and Teece 2014).
Downstream – Downstream area is a part where the refining of the petroleum and the oil is done. The handling and decontaminating of the raw flammable gas, the advertising of the product and conveyance of the items extracted from raw the petroleum and gaseous petrol. The down-stream segment achieves purchasers through items, for example, gas or oil, lamp oil, stream fuel, diesel oil, warming oil, fuel oils, greases, waxes, black-top, flammable gas, and melted oil gas (LPG) and also several petrochemicals (Sadaghiani et al. 2015).
The different roles of: International Oil Companies; National Oil Companies; Government Sponsored Enterprises
The continuation with the rise of NOCs has revived the rise in the costs of oil and also adjusted the control over a vast segment of the earth’s hydrocarbon resources shift unequivocally to help the companies. Their ability for getting money, Human Resources and particular organizations direct from the oil fields, and for working according to the in-house aptitudes, empowers them in working openly of Investor Owned Companies in numerous events (Raut, Narkhede and Gardas 2017).
The request for NOCs continues progressing with the overall imperativeness scene to reflect assortments that are required, disclosure of new ultra-significant water oil stores, and national and geopolitical changes. NOCs, usually observed as the guardians of their country’s standard resources, have all things considered asserted and managed the aggregate National oil companies arrange from upstream are to the downstream area activities. By securing their basic structure, NOCs have been raised as a joint meander assistant with the IOCs and dynamically as their opponents, searching for worldwide upstream and downstream acquiring and asset targets (Saad, Mohamed and Hasnan 2014).
GSEs and the NOCs have extending power and effect in overall markets of oil. In a parallel way, the IOCs’ play a significant part in the oil markets and has been in rot as a result of the contracting specific aptitudes along with the ability, decreased the access to ease holds, and lowers the working incomes. Thusly, IOCs have the tendency to focus on all of the more troublesome and lesser productive territories, gas, oil, and significant operations of water. GSEs are been advancing the NOCs, other organizations and specific operations with high specific contribution along with the lesser cost than IOCs (Mitchell and Mitchell 2014). As these examples continue with, IOCs are most likely going to grasp another arrangement of activity that may require changes in group situated undertakings and accommodating associations. Teaming up with IOCs and GSEs is a better than average progress for NOCs that grasp a globalization approach. As a matter of fact, this is an important strategy for all social occasions, as it will engage GSEs in gaining access to NOCs’ advantages. Further, the IOCs and GSEs in association with NOCs must add to the budgetary progression of the countries where they work.
In relation to petroleum product and one natural gas product of your choice compare and contrast: the supply chains; Upstream; Midstream; Downstream
When raw petroleum is removed from the earlier stage, it must be transported first and then refined are into oil based commodities that are being appreciated. These items must be then transported to the customers or the retailers (like the organization or the fuel stations that conveys warming oil to your home, on the off chance that you have an oil heater) (Handfield, Primo and Oliveira 2015). The general well-to-shopper inventory network for oil based commodities is frequently depicted as being divided into three parts:
Upstream process includes investigation for unrefined petroleum stores and the process of generation of raw petroleum. Cases of the firms that can have some of the place in the upstream portion of the business integrate organizations that claim their rights for doing the boring of the oil well (e.g., ExxonMobil) and some of the organizations which offers help in managing the boring part of the business (e.g. Halliburton).
The midstream process includes the transfer of the raw petrol to the refiners; then the refining of the raw petroleum into the commercial items; and the circulation of the items in the hands of the retailers and wholesalers (Inkpen and Ramaswamy 2017). Instances of firms that would have a place in the midstream segment of the business join associations that vehicle oil by pipeline, truck or flatboat (e.g., Magellan Pipeline); and associations that refine crude oil (e.g., Tesoro).
The downstream process includes the selling offer of oil based commodities. Gas stations are the most important downstream organizations.
Seasonality is an important part that affects the rise in the costs of crude oil. Crude oil costs have a tendency to rise in August in because of the late spring season, which brings in the rise in the buying of the gas (Cameron 2016). The tropical storm causes dangers in the Gulf of Mexico are in like manner assessed in the midst of this period. Nevertheless, towards mid-September and October, crude oil costs tend to peak out. Crude oil costs tend to fall in the midst of early October on account of reduced demand in the winter. Esteem examination of crude oil wanders suggests that foul oil costs generally peak among September and October. By then costs start to make cut down highs among October and November. Finally, they hit the base by December. Regardless, appeared differently in relation to geopolitical strains, oil abundance, financial stoppage, or a cash related crisis, the normality factor could have a minor effect (Bentley, 2012).
Conclusion
Thus it can be concluded that the industry of oil and gas is the powerhouse of the world which provides employment to more than thousands of workers all over the world. Industries of oil and gas have played a vital role history of the world. The cultures of the ancient days had used the crude oil as a substance to bind some materials or as a seal to reducing the leakage of various substances. Seasonality assumes a key part in impacting raw petroleum costs. Unrefined petroleum costs tend to increase in August; which peaks out at the time of September and October; which finally lowers at the time of December.
References
Bentley, R.W., 2012. Global oil & gas depletion: an overview. Energy policy, 30(3), pp.189-205.
Cameron, P.D., 2016. Investment Cycles and the Rule of Law in the International Oil and Gas Industry: Some Reflections on Changing Investor-State Relationships. Hous. J. Int’l L., 38, p.755.
Handfield, R.B., Primo, M. and Oliveira, M.P.V.D., 2015. The role of effective relationship management in successful large oil and gas projects: Insights from procurement executives. Journal of Strategic Contracting and Negotiation, 1(1), pp.15-41.
Inkpen, A. and Ramaswamy, K., 2017. Breaking up Global Value Chains: Evidence from the Global Oil and Gas Industry. In Breaking up the Global Value Chain: Opportunities and Consequences (pp. 55-80). Emerald Publishing Limited.
Mitchell, J.V. and Mitchell, B., 2014. Structural crisis in the oil and gas industry. Energy Policy, 64, pp.36-42.
Raut, R.D., Narkhede, B. and Gardas, B.B., 2017. To identify the critical success factors of sustainable supply chain management practices in the context of oil and gas industries: ISM approach. Renewable and Sustainable Energy Reviews, 68, pp.33-47.
Saad, S., Mohamed Udin, Z. and Hasnan, N., 2014. Dynamic supply chain capabilities: A case study in oil and gas industry. International Journal of Supply Chain Management, 3(2).
Sadaghiani, S., Ahmad, K.W., Rezaei, J. and Tavasszy, L., 2015, April. Evaluation of external forces affecting supply chain sustainability in oil and gas industry using Best Worst Method. In Gas and Oil Conference (MedGO), 2015 International Mediterranean (pp. 1-4). IEEE.
Shuen, A., Feiler, P.F. and Teece, D.J., 2014. Dynamic capabilities in the upstream oil and gas sector: Managing next generation competition. Energy Strategy Reviews, 3, pp.5-13.
van Goor, H. and Scholtens, B., 2014. Modeling natural gas price volatility: The case of the UK gas market. Energy, 72, pp.126-134.
Wan, Z., Huang, T. and Craig, B., 2014. Barriers to the development of China’s shale gas industry. Journal of cleaner production, 84, pp.818-823.
Yusuf, Y.Y., Gunasekaran, A., Musa, A., Dauda, M., El-Berishy, N.M. and Cang, S., 2014. A relational study of supply chain agility, competitiveness and business performance in the oil and gas industry. International Journal of Production Economics, 147, pp.531-543.
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