One of the most crucial parts of the oil and gas industry, upstream operations are vital to maintaining the health of the industry and the world’s energy supply. To help you get a better idea of how these operations work, here’s a rundown of their main features and how they fit into the industry’s overall structure. Keep reading to learn more about upstream oil and gas operations!
Learn more about upstream oil and gas operations!
Oil & Gas Production
Upstream oil and gas production refers to exploration, drilling, field development, and extraction. While some of these activities are performed by oil companies themselves, many are subcontracted out to specialized service companies. The upstream segment also includes basic exploration: collecting information about potential oil or natural-gas deposits based on a variety of data sources (seismic surveys, well log analysis, etc.). This information is then used to determine how much a deposit might be worth digging up. Once you’ve located an appealing reserve, it’s time to look at how much it will cost to develop.
Oil & Gas Exploration
Upstream refers to exploration and production (E&P) or oil and gas exploration and development. In other words, exploration is where new energy sources are found, while production involves extracting natural resources from locations already discovered. It is a complex process involving multiple parties to get funding and approval before drilling begins. The first step in E&P is geologic mapping, which involves identifying oil-and-gas-rich areas on land or beneath bodies of water. The next step is seismic testing, which uses sound waves to map underground formations. Once an area has been mapped out, it’s time for exploratory drilling.
Oil & Gas Development
Oil and gas engineering companies are first discovered in geological formations thousands of feet below ground. The reservoirs that contain these natural resources are often miles wide. Onshore oil & gas development may include a variety of activities, including exploration drilling (locating), well construction, hydraulic fracturing (fracking), production, pipeline installation, to name a few. The combination of these activities is typically referred to as upstream oil & gas operations. Though it depends on where you are geographically, there may be significant public debate associated with every aspect of energy development, including waste disposal (including water and air pollution), safety concerns during extraction/production, and potential effects on wildlife habitat surrounding a site.
Oil & Gas Drilling
The process of oil and gas drilling typically begins with an exploration phase using chemical processing equipment. Companies will attempt to ascertain whether there is oil or natural gas in a particular area. The information collected during the exploration can be used to determine how much effort is required to drill a well, as well as where it should be located. In most cases, exploratory wells will not produce enough oil or natural gas to make extracting them worthwhile; however, if new sources are found, extraction can begin. At that point, it’s time for the production phase to begin. Production involves drilling additional wells in order to extract more oil or natural gas from specific locations.
Upstream oil and gas production is a specialized area of operations management that focuses on extracting natural resources from underground reserves. Similar to water purification, petrochemical manufacturing, or mining, oil wells are an important part of any economy. Operators are tasked with overseeing each stage of production, from drilling through extraction. The well itself must be cleaned and maintained every day. Oil spills must be mitigated by operators who specialize in hazard control. They are also responsible for hiring teams that ensure safe transportation of products to market via pipelines or tankers, which must comply with environmental regulations across a variety of jurisdictions. Finally, operators must maintain proper communication with suppliers in order to select appropriate materials for their wells while maintaining positive relationships with local communities affected by operation output.
Design, planning, and engineering for oil and gas production facilities are nothing like what you’re used to in your daily life. This is one of those you know when you see its situation, but here are a few things to keep in mind: Design: The design of an oil or gas facility is one that’s not only efficient and effective for its intended use but also built with longevity in mind. This means thinking about how everything should fit together—there isn’t much flexibility once construction begins.