Oil and gas companies operate in the pumping, transporting, and producing or processing of crude oil and natural gas. In the United States, this amounts to roughly 18.12 million barrels of oil and 91.4 billion cubic feet of natural gas per day.
To simplify this, we need to know what constitutes a barrel of crude oil or a cubic foot of natural gas. One barrel of crude oil amounts to 42 gallons, while one cubic foot refers to the volume of gas contained in that cubic foot. A cubic foot amounts to roughly 28.3 liters. You are able to do an online search of companies reviewed for their production capacities.
There are 3 stages of operation in the oil and gas industry, namely Upstream, Midstream, and Downstream.
Upstream:
Upstream refers to companies who find the reservoirs and drill the oil and gas wells. These include geologists and geophysicists to conduct exploration exercises to find the gas or oil well, service rig operators, both on and offshore, engineering firms and drilling contractors to do the actual drilling of the oil or gas well. Upstream companies, also called exploration and production companies, make their profits by selling oil and gas for market value. They are much more susceptible to change as the price of oil drops, which results in a loss in earnings. These companies are high risk companies, due to the nature of the work they do.
Midstream:
Midstream refers to companies responsible for transporting the oil and gas to refineries. They provide transportation and storage services of oil and gas using pipelines and gathering systems. Midstream companies have high regulations they need to adhere to in terms of safety, transportation and storage of natural gases that could be potentially harmful. There is a low risk of loss of capital or investment. Midstream companies are the link between upstream companies and downstream companies, which are defined below.
Downstream:
Downstream refers to companies responsible for the refining and production of crude oil and natural gas into products like petroleum and chemicals, as well as the sale of these products to manufacturing industries and retail outlets. Downstream companies include oil refineries, natural gas distributors, petrochemical and petroleum plants, and even retail outlets. These companies are involved in all levels of the production process, and make their profits on the monetary difference in what they pay to buy raw materials such as crude oil, and the price they sell their higher valued product such as petroleum.
The majority of products that we use everyday come from downstream companies, such as diesel, natural gas, gasoline and motor oil, lubricant products, pesticides, pharmaceuticals and even oils used for space heating. Diesel can be used in diesel-powered generators, which act as an energy source for homes, schools and hospitals in the event of a power failure or blackout. Some products that can be made from petroleum include nail polish, rubbing alcohol, recreational equipment such as life jackets and bicycle tires, and aesthetic items like candles.