Upstream, Midstream and Downstream Oil and Gas Industry - Meaning, Differences and Why They Overlap

Hello and welcome to the Energy Brief with Peter And as you might have guessed I'm Peter The First Principle Method says to understand any concept break things down to their mos fundamental concept: this is what you should do regarding your understanding of the petroleum industry in this video you will learn about the three major divisions of operations the petroleum industry upstream midstream and downstream operations—next this video will answer your question about why these phases sometimes overlap trust me this aspect of the industry is crucial for you as it forms the foundation for building your understanding of the industry —most importantly remember to hit the subscribe button below to get the latest insights from the energy sector and stay informed petroleum activities are divided into three major segments: upstream midstream and downstream—these divisions are key to understanding the understanding the complexities of the oil and gas industry and recognizing the different types of companies operating under each upstream segment is the first phase which involves locating and drilling for hydrocarbons o extract them from the earth it involves exploring for potential oil and gas fields drilling exploratory wells and operating those wells to recover and bring forth crude oil or natural gas gas reaching the surface upstream is also referred to as the exploration and production phase where engineers and geologists conduct geological and geophysical surveys at potential sites The production phase involves the drilling plugging and abandoning of oil wells operations that are highly risky and capital-intensive yet on the positive side they can also be extremely profitable companies that search for prospective oil and gas reserves and drill wells for exploration are known as upstream companies midstream operations are necessary for the storage and transportation of oil and natural gas prior to their refinement into finished products the midstream serves as the link between the oil production site which is the upstream sector and the downstream sector which includes retail distributors involves the movement and storage of hydrocarbons and encompasses gathering shipping transporting processing and storage These hydrocarbon companies involved in pipeline transportation crude oil shipping and natural gas processing are said to be engaged in midstream operations the downstream sector is the final stage that includes the refining processing storage sale marketing and transportation of refined oil and other finished products to final consumers some of these products include petrol jet fuel fertilizers plastics and sumo—other downstream segments we have include filling stations gas outlets retail outlets distribution terminals and oil tankers as explained earlier you may notice some similarities in their operations especially in the mainstream and downstream sectors where the upstream and downstream are often treated as separate divisions More than two separate divisions are involved because the mainstream sector can include certain downstream operations the first intersection we will examine is in their processing activities must be understood that natural gas must be condensed or liquefied by operators in the mainstream sector before transporting it to the downstream even though the downstream is ordinarily responsible for refining and processing there are certain midstream processing operations that have been requested to facilitate the transportation of oil and gas to downstream facilities the second overlapping operation involves transportation across both midstream and downstream stages engaging transportation activities however they define the sense that downstream transportation and storage concern finished petroleum products while midstream deals with the transportation of crude oil and raw materials Rockwood to the refineries via pipelines or tanks—now I'm sure you have a better perspective on how operations in the petroleum industry work just to recap upstream operations concerns identifying extraction and production of crude oil and gas midstream deals with transportation storage and processing of the extracted oil and gas downstream refers to finding the marketing sales and distribution of finished petroleum products such as kerosene diesel and petrol to final consumers—this is a growing YouTube channel kindly assist increasing its reach channel by hitting the subscribe and like button—like they say applause may be good for the moment but love is everlasting your addition to my view count is good for the moment but your subscription is forever—thank you for watching