Upstream and downstream in oil and gas from A to Z

Upstream and downstream in oil and gas from A to Z

Dec 7, 2019

You may know enough details about the upstream, but there is less knowledge when it comes to the downstream segment of the petroleum industry.

Every industry has its own sections and manufacturing system.

When it comes to a huge industry like oilfields, every single detail about its sectors whether its small or big mat.

So before answering the most frequently asked questions about these two sectors, let us first know the definitions, the history, and the very first beginning of each sector.

The Upstream segment

Before getting into the actual upstream segment, let us define the word upstream itself.

The word upstream means the opposite direction where a stream comes up near to the source.

This is the definition of the word, but we are going to define the expression itself which is that every sector in any industry is being set up according to the business’s structure and the organized functions.

The upstream sector is one of the three main sectors in the oil and gas industry which are the upstream, midstream and downstream.

When it comes to business, the upstream sector is known as the sector of exploration and production.

The upstream stage is all around the wells and where you can locate them, how far and how deep you need to drill for them, and it is also about how to design and manage them.

The history of the upstream stage

The early start of this stage was in 1860 in Italy, when it was the drilling for the first oil well.

In Milan, Europe’s biggest gas field was found and marked the starting point of the oil and gas industry in Italy and the whole of Europe.

The stages of the upstream

Every sector requires some organized and well-studied stages and movements for the process.

The upstream sector requires three stages to perform its role.

They are exploration, drilling, and production.

Exploration

This is where it all starts.

The explorations search for the wells trying to locate them.

They also determined to figure out the best ways to have access to those wells.

This stage also involves deciding the drilling would be onshore or offshore.

Drilling

What is drilling?

Actually, this is one of the most common and frequently asked questions when it comes to this industry.

Drilling is a tool or a specific machine that is specially designed with rotating cutting parts in order to make wells.

In other words, drilling is a sort of an activity in which a hole is being bored using the rotating cutting machine in order to facilitate the access to the geologic sources in which the oil and gas are sorted in them.

And as it was mentioned that there are two kinds of drilling,

the onshore and the offshore drilling.

Onshore drilling: means drilling holes under the earth’s surface.

Offshore drilling: means drilling holes under the water.

The Production

Understanding this stage is the main key to your business’s success.

In this stage, you must focus on creating the real product, by extracting oil and gas from the liquid.

What is the upstream pressure design?

If you are an expert then the answer to this question must have been similar to you.

But for someone who is new to this field, you have to know that the pressure in the upstream in the oil and gas sector includes those main processing lines, those vapor spaces found in the tanks, and last but not least those lines which supports fuel.

Handling this mission of managing and controlling the pressure of upstream is a huge part of the strategy of the industry itself.

The downstream segment

After knowing the definition of the upstream, it becomes so much easier to figure what does the downstream means.

As a definition, in general, it means the same way or the same direction the stream comes up.

But if we are going to mention the expression itself in this field, then it means the size of the petroleum industry which is responsible for the refining and distribution of the products.

The downstream industry supports producing so many products such as gasoline, diesel, plastic, and etc.

Like the upstream sector, the downstream industry has sections and stages to complete its process too.

They are the distribution, the selling outlets, and production plants.

The distribution in the downstream

Distribution means getting the products from the company and transfer it to the consumers through the selling outlets.

By 2019 you must ask yourself a very important question which is, will technology help in this stage?

You can easily predict the answer which is going to be absolutely yes.

Technology can make you easily know the exhaustion at customers’ places.

What is the value chain in upstream and downstream?

The upstream

In order to grow in this industry, you have to know the value of every sector in it.

The upstream value is all about your suppliers and their products.

And it also gives due care about environmental performance.

The downstream

This is all about what happens after the products leave your company.

Yes, the actual work ends at this moment, but your social work starts.

Every business faces some challenges at any stage of the process, but the most important challenge and risk that you have to avoid or find a solution for it is the greenwash.

How upstream and downstream affect the environment?

It is a well-known fact that the oil and gas industry has a major impact on the environment.

This industry affects the environment in several aspects and that is what we are going to discuss.

1- The Air impact

In the stages of exploration and production which are included in the upstream stages, the air would be deeply affected because of the drilling and the equipment which are being used to prepare the land.

Some of the vapors generated by the drilling operations are reacting with the atmosphere producing acid rain which is very dangerous to human health.

2- Water pollution

Upstream and downstream in oil and gas also affect the water quality.

This happens in many unpredictable ways.

Like the mud which was a result of the drilling operation around the site could cause some pollution to the body water.

3- The social impact

This kind of affection is all about understanding the social and the job opportunities which can be easily get affected by the activities happening in this essential stage.

How to avoid environmental pollution?

Each problem and challenge has got the solutions which are designed especially for it.

Upstream and downstream oil and gas companies

The companies in this field are divided into three different categories which refer to the three sectors of the industry.

The upstream, the midstream, and the downstream.

Some companies tend to combine two kinds or maybe three of the sectors.

Marketing for upstream and downstream in the oil and gas industry

Like any other business, the upstream and downstream in oil and gas companies need to market their brand and the products.

Marketing for the oil and gas industry

Branding: your brand is the only way that makes you familiar to people.

The products’ quality: your products are what you offer to your consumers.

Marketing for upstream and downstream sectors

Yes, they are two different sectors with completely different activities, but they are equally important when it comes to marketing.

Upstream: simply, it is responsible for setting up plans and well-studied strategies to offer a long-term market for the company.

Downstream: it is all about the sales and the after-sales services.

The conclusion

Upstream and downstream are the main two sectors and the body of the oil and gas industry.