Oil & Gas Upstream - How did the industry start?

Crude oil is very old stuff, hundreds of millions of years in the making. What's new is the idea that it might be useful at commercial scale. For most of history, crude oil has just been a messy, natural quirk, something that seeps from the ground in certain spots. In 1859, two American investors changed everything. Their idea? Dig up crude oil and turn it into kerosene, an increasingly popular and valuable alternative to whale oil used for lighting. Where there was seepage, they figured, there must be storage. But they wanted to do it on the cheap. To lead the work, they hired someone with no relevant experience, Edwin Drake, a railroad conductor. His greatest asset was actually his unlimited rail pass. He could travel for free and save the venture a bit on expenses. Nonetheless, Drake was earnest and got to work, finding a spot to drill in Titusville, Pennsylvania. The project was mocked by locals as Drake's folly. Until it wasn't. Drake struck oil, using a simple steam-powered drill and steel pipes to line the well. The race was on. For the next few decades, commercial crude oil extraction was the hot new investment. High reward, but high risk. Only one in every ten wells ended up producing. There were simply few reliable ways to know where the oil was. Prospectors looked for any and all signs. Seeps, of course, geological formations, and even the time-honored approach of witching, walking around with a magical oil-detecting stick, the divining rod. Today, naturally, that picture has changed. Extraction is no longer so speculative. Thanks to modern geological knowledge and seismic surveying technology, we pretty much know where the hydrocarbons are, roughly speaking. Today's challenge is that the extraction itself has gotten more difficult. All the easy-to-reach oil is gone, and we're increasingly tapping hard-to-reach deposits. Early wells were as shallow as 10 meters in some cases. Today's wells range between one and a half to three kilometers deep, and sometimes more than ten. Far more sophisticated drilling and well technology is required. Rising to this challenge is one of the world's largest industries, oil and gas. In this primer, we will focus on the upstream segment, particularly the upstream operators, the companies that lead the three core steps of the Exploration, where crude oil and natural gas deposits are assessed, Development, where wells and infrastructure are prepared, and Production, where hydrocarbons are extracted and prepared for transport. These operators include the upstream business units of the international oil companies, IOCs, like Shell, Chevron, BP, and ExxonMobil, as well as the government-owned national oil companies, NOCs, like Saudi Aramco, Petrobras, and India Oil. We'll cover the various types of upstream projects, the activities undertaken across the project lifecycle, the ecosystem or participants, the economics, and the key trends.