Going With the Flow

going with the flowThe oil and gas industry is broken down into five distinct sections:

• Upstream companies
• Midstream companies
• Downstream companies
• Oil field services
• Integrated majors

All segments work together in the operation of discovering oil and gas and creating useful materials such as automobile gasoline and jet fuel. Understanding the finer points of how each segment works is critical to understanding the role and purpose it plays in the overall process.

The upstream companies are also known as exploration and production (E&P). These companies find and extract minerals and resources from the ground.

Midstream companies transport oil and gas to companies that will sell them. This is usually done through pipelines which can carry oil and gas over great distances.

Downstream companies are also known as refine and market companies. They turn the minerals into a useful product such as automobile gasoline and then sell this to customers.

Oil field services provide services to companies that find, transport, and sell oil and gas. Oil field service companies can maintain oil fields, provide technology and analysis or even give security for the workers.

Finally, there are companies that are part of the integrated majors section. These are typically larger companies such as Shell and Exxon Mobil. They can do everything in the other sections but typically focus on upstream and downstream.

Source: M&I