Outlining The Components Of The Petroleum Industry

The crude oil industry includes the planetary procedures of geographic expedition, extraction, refinement, transporting ( frequently by oil oilers and grapevines ) , and marketing crude oil merchandises.

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The largest volume merchandises of the industry are fuel oil and gasolene ( gasoline ) . Petroleum is besides the natural stuff for many chemical merchandises, including pharmaceuticals, dissolvers, fertilisers, pesticides, and plastics.

The industry is normally divided into three major constituents: upstream, midstream and downstream. Midstream operations are normally included in the downstream class.

Petroleum is critical to many industries, and is of importance to the care of industrialised civilisation itself, and therefore is a critical concern for many states.

Oil histories for a big per centum of the universe ‘s energy ingestion, runing from a depression of 32 % for Europe and Asia, up to a high of 53 % for the Middle East. Other geographic parts ‘ ingestion forms are as follows: South and Central America ( 44 % ) , Africa ( 41 % ) , and North America ( 40 % ) .

The universe consumes 30 billion barrels ( 4.8 kmA? ) of oil per twelvemonth, with developed states being the largest consumers. The United States consumed 25 % of the oil produced in 2007. The production, distribution, refinement, and retailing of crude oil taken as a whole represents the universe ‘s largest industry in footings of dollar value.

Petroleum is the individual largest beginning of energy used in the United States. The state uses two times more crude oil than either coal or natural gas and four times more than atomic power or renewable energy beginnings.

Before crude oil can be used it is sent to a refinery where it is physically, thermally, and chemically separated into fractions and so converted into finished merchandises.

About 90 per centum of these merchandises are fuels such as gasolene, air power fuels, distillation and residuary oil, liquefied crude oil gas ( LPG ) , coke, and kerosine. Refineries besides produce non-fuel merchandises, including petrochemicals, asphalt, route oil, lubricators, dissolvers, and wax.

Petrochemicals ( ethene, propene, benzine, and others ) are shipped to chemical workss, where they are used to fabricate chemicals and plastics.

The United States is the largest manufacturer of refined crude oil merchandises in the universe, with 25 per centum of planetary production and 163 operating refineries.

In 1997 refineries supplied more than 6 billion barrels of finished merchandises and employed about 65,000 people.

U.S. refineries are besides the largest energy consumers in fabrication and pass $ 5- $ 6 billion yearly in pollution suspension.

The wide Standard Industrial Classification ( SIC ) for refinement is SIC 29 ; oil and gas geographic expedition falls under SIC 13.

Oil & A ; Gas Industry in India

The beginning of oil & A ; gas industry in India can be traced back to 1867 when oil was struck at Makum near Margherita in Assam. At the clip of Independence in 1947, the Oil & A ; Gas industry was controlled by international companies.

India ‘s domestic oil production was merely 250,000 metric tons per annum and the full production was from one province – Assam.

The foundation of the Oil & A ; Gas Industry in India was laid by the Industrial Policy Resolution, 1954, when the authorities announced that crude oil would be the nucleus sector industry.

In pursuit of the Industrial Policy Resolution, 1954, Government-owned National Oil Companies ONGC ( Oil & A ; Natural Gas Commission ) , IOC ( Indian Oil Corporation ) , and OIL ( Oil India Ltd. ) were formed.

ONGC was formed as a Directorate in 1955, and became a Commission in 1956. In 1958, Indian Refineries Ltd, a authorities company was set up. In 1959, for selling of crude oil merchandises, the authorities set up another company called Indian Refineries Ltd. In 1964, Indian Refineries Ltd was merged with Indian Oil Company Ltd. to organize Indian Oil Corporation Ltd.

During 1960s, a figure of oil and gas-bearing constructions were discovered by ONGC in Gujarat and Assam. Discovery of oil in important measures in Bombay High in February, 1974 opened up new avenues of oil geographic expedition in seaward countries.

During 1970s and till mid 1980s exploratory attempts by ONGC and OIL India yielded finds of oil and gas in a figure of constructions in Bassein, Tapti, Krishna-Godavari-Cauvery basins, Cachar ( Assam ) , Nagaland, and Tripura. In 1984-85, India achieved a self-sufficiency degree of 70 % in crude oil merchandises.

In 1984, Gas Authority of India Ltd. ( GAIL ) was set up to look after transit, processing and selling of natural gas and natural gas liquids.

GAIL has been instrumental in the laying of a 1700 km-long gas grapevine ( HBJ grapevine ) from Hazira in Gujarat to Jagdishpur in Uttar Pradesh, go throughing through Rajasthan and Madhya Pradesh.

After Independence, India besides made important add-ons to its refinement capacity. In the first decennary after independency, three coastal refineries were established by transnational oil companies runing in India at that clip.

These included refineries by Burma Shell, and Esso Stanvac at Mumbai, and by Caltex at Visakhapatnam. Today, there are a sum of 18 refineries in the state consisting 17 in the Public Sector, one in the private sector.

The 17 Public sector refineries are located at Guwahati, Barauni, Koyali, Haldia, Mathura, Digboi, Panipat, Vishakapatnam, Chennai, Nagapatinam, Kochi, Bongaigaon, Numaligarh, Mangalore, Tatipaka, and two refineries in Mumbai. The private sector refinery built by Reliance Petroleum Ltd is in Jamnagar. It is the biggest oil refinery in Asia.

By the terminal of 1980s, the crude oil sector was in the stagnation. Oil production had begun to worsen whereas there was a steady addition in ingestion and domestic oil production was able to run into merely approximately 35 % of the domestic demand. The state of affairs was farther compounded by the resource crunch in early 1990s.

The Government had no money for the development of some of the so freshly discovered Fieldss ( Gandhar, Heera Phase-II and III, Neelam, Ravva, Panna, Mukta, Tapti, Lakwa Phase-II, Geleki, Bombay High Final Development schemes etc. This forced the Government to travel for the crude oil sector reforms which had become inevitable if India had to pull financess and engineering from abroad into the crude oil sector.

The authorities in order to increase geographic expedition activity, approved the New Exploration Licensing Policy ( NELP ) in March 1997 to guarantee flat playing field in the upstream sector between private and public sector companies in all financial, fiscal and contractual affairs. This ensured there was no compulsory province engagement through ONGC/OIL nor there was any carried involvement of the authorities.

To run into its turning crude oil demand, India is puting to a great extent in oil Fieldss abroad. India ‘s state-owned oil houses already have bets in oil and gas Fieldss in Russia, Sudan, Iraq, Libya, Egypt, Qatar, Ivory Coast, Australia, Vietnam and Myanmar. Oil and Gas Industry has a critical function to play in India ‘s energy security and if India has to prolong its high economic growing rate.

Oil Exploitation

Oil geographic expedition in India began in 1867.when oil was struck at mecum, Margherita in Assam. However, geographic expedition and production ( E & A ; P ) started in a systematic manner merely in 1899, after the Assam oil company ( AOC ) was formed. At the clip of independency, India ‘s domestic oil production was merely 250,000 metric tons per annum, under its industrial policy declaration of 1954, the authorities announced that crude oil would be considered as a nucleus sector in the country.The geological study of India, carried out extended reconnaissance studies and functions, to turn up construction suited for geographic expedition of oil and crude oil, However, crude oil geographic expedition in the state received the existent push merely after the puting up of oil and crude oil committee in 1955.

INDIAN PETROLEUM INDUSTRY

The India Petroleum Industry is a instance in point for exhibiting the elephantine leapsIndia has taken after its independency towards its March to achieve a autonomous economic system.

During the Independence epoch of 1947, theIndia Petroleum Industry was controlled by foreign companies andIndia ‘s ain expertness in this sector was limited. Now, after 60 old ages, theIndia Petroleum Industry has become an of import populace sector set abouting with legion skilled forces and updated engineering that is comparable to the best in the universe. The energy and the accomplishment during these old ages is the growing of productiveness in crude oil and petroleum-based merchandises. Even the ingestion has multiplied itself about 30 times in the post-independence epoch.

An of import promotion in the crude oil industry came with the Industrial Policy Resolution, 1956 which signified the publicity of growing of industries. The ONGC, originally set up as a Directorate in 1955, was transformed into a Commission in 1956. In 1958, theIndian Refineries Ltd. , a authorities project, came into being. TheIndian Oil Company ( IOC ) , besides a authorities project, was set up in 1959 with the intent of marketing petroleum-related products.Indian Oil Corporation Ltd. was formed in 1964 with the amalgamation of theIndian Refineries Ltd. and theIndian Oil Company Ltd. Presently, 17 refineries operate under theIndia Petroleum Industry.

Growth of theA India Petroleum Industry:

In the post-independence epoch, India grew enormously in footings of substructure in the crude oil industry, which in bend helped increase the production of crude oil and petroleum-related merchandises.

During 1947-57, 3 refineries were set up in Mumbai and Visakhapatnam by multinational oil corporations making concern inIndianA

During 1957-67, another 3 refineries were established in Guwahati, Barauni, and Koyali byIndian Refineries Ltd.A

During 1967-77. 2 more were set up in Chennai by Persian companies and in Haldia byIndian Oil Ltd.A

During 1977-87, 2 more refineries were commissioned. The 1 at Bongaigaon was the first to hold an amalgamated crude oil refinery-cum-petrochemicals unit. The other was established at Mathura.A

During 1987-97, 2 more were set up at Nagapattinam and Mangalore.

During 1998-2007, refineries at Panipat and Numaligarh were set up.

Major Oil Companies of the World

The prima oil companies of the universe are:

aˆ? The Exxon Mobil Corporation: This American oil and gas corporation is the offspring of John D. Rockefeller ‘s Standard Oil Company, formed by the amalgamation of Exxon and Mobil on November 30, 1999. The universe ‘s biggest publically traded company has its central office in Irving, Texas. Its militias at the terminal of 2007 were about 72 billion barrels of oil-equivalents ( BBOE ) , which are expected to last for the following 14 old ages.

aˆ? Royal Dutch Shell plc: It was formed in 1907 when Royal Dutch Petroleum Company merged with Shell Transport and Trading Company Ltd, UK. The initial constitution included 60 % Dutch and 40 % British portions.

aˆ? BP plc: Having its central offices in London, this company was discovered by William Knox D’Arcy in May 1908 in the Middle East. It was called the Anglo-Iranian Oil Company ( AIOC ) before it became the British Petroleum in 1954. In 1998, it became BP Amoco after unifying with Amoco of Indiana. In 2000, it was renamed BP and adopted the tagline “ Beyond Petroleum. ”

aˆ? Chevron/Texaco Corporation: It was formed after the split of John D. Rockefeller ‘s Standard Oil Company in 1911 and named SoCal. It was one of the Seven Sisters that dominated the universe oil industry in the early twentieth century.

aˆ? Conoco Phillips Corporation: Based in Houston, Texas, it was formed by the amalgamation of Conoco Inc and Phillips Petroleum Company on August 30, 2002. Its fuel Stationss are named Phillips 66, Conoco and 76. It is the second-largest refiner in the US and the fifth-largest in the universe, with a processing capacity of 2,208,000 and 2,901,000 bbl/day.

The Seven Sisters ( the major oil companies of the West that divided universe oil among themselves after WW-II ) now control a minor proportion of universe militias. State monopolies and emerging partially-privatized oil companies hold the major portion.

Petroleum POLITICS

Petroleum political relations have been an progressively of import facet of international diplomatic negotiations since the rise of the oil industry in the Middle East in the early twentieth century.

As competition grows for an progressively scarce but critical resource, the strategic computations of major and minor states likewise place more outstanding accent on the pumping, refinement, conveyance and usage of crude oil merchandises.

Pipeline diplomatic negotiations in Caucasus

The Baku-Tbilisi-Ceyhan grapevine was built to transport rough oil and the Baku-Tbilisi-Erzurum grapevine was built to transport natural gas from the western side ( Azerbaijani sector ) of the Caspian Sea to the Mediterranean Sea short-circuiting Russian grapevines and therefore Russian control. Following the building of the grapevines, the United States and the European Union proposed widening them by agencies of the proposed Trans-Caspian Oil Pipeline and the Trans-Caspian Gas Pipeline under the Caspian Sea to oil and gas Fieldss on the eastern side ( Kazakhstan and Turkmenistan sectors ) of the Caspian Sea. In 2007, Russia signed understandings with Turkmenistan and Kazakhstan to link their oil and gas Fieldss to the Russian grapevine system efficaciously killing the submarine path.

China has completed the Kazakhstan-China oil grapevine from the Kazakhstan oil Fieldss to the Chinese Alashankou-Dushanzi Crude Oil Pipeline in China. China is besides working on the Kazakhstan-China gas grapevine from the Kazakhstan gas Fieldss to the Chinese West-East Gas Pipeline in China.

Politicss of Oil Nationalization

The political relations of oil nationalisation has involved Western authoritiess utilizing putschs and covert actions to forestall foreign governments from taking control of Western run oil companies in these several states. Enrique Mosconi, the manager of the Argentine province owned oil company Yacimientos Petroliferos Fiscales ( YPF, which was the first province owned oil company in the universe, predating the Gallic Compagnie francaise diethylstilbestrols petroles ( CFP, Gallic Company of Petroleums ) , created in 1924 by the conservative Raymond Poincare ) , advocated oil nationalisation in the late twentiess among Latin American states.

The latter was achieved in Mexico during Lazaro Cardenas ‘s regulation, with the Expropiacion petrolera.

Iran and Venezuela are two of import illustrations of foreign intercessions to upset nationalisation undertakings.

In 1953, Iran ‘s Premier Mohammed Mossadegh was overthrown by a CIA/MI6 covert action known as Operation Ajax. The end was to forestall Mossadegh from nationalising the Anglo-Iranian oil company which subsequently became British Petroleum.

Similarly in Venezuela, Hugo Chavez attempted to nationalise Venezuela ‘s oil during the early old ages of his presidential term. Hugo Chavez quickly reversed policy after a 2002 failed putsch following a work stoppage and heavy protests refering his policies towards PDVSA. This putsch was backed by the authoritiess of the United States and Spain, as is documented in Tariq Ali ‘s book, Pirates of the Caribbean.

Politicss of alternate fuels

Vinod Khosla ( a good known investor in IT houses and alternate energy ) argues [ 20 ] that the political involvements of environmental advocators, agricultural concerns, energy security advocators ( such as ex-CIA manager James Woolsey ) and car manufacturers, are all aligned for the increased production of ethyl alcohol.

He pointed out that from 2003 to 2006, ethanol fuel in Brazil has replaced 40 % of its gasolene ingestion while flex fuel vehicles went from 3 % of auto gross revenues to 70 % . Brazilian ethyl alcohol, which is produced utilizing sugar cane, reduces green house gases by 60-80 % ( 20 % for maize produced ethyl alcohol ) .

Khosla besides says that ethyl alcohol is about 10 % cheaper per given distance. There are presently ethanol subsidies in the United States but they are all liquidizer ‘s credits, intending the oil refineries receive the subsidies instead than the husbandmans.

There are indirect subsidies due to subsidizing husbandmans to bring forth maize. Vinod says after one of his presentations in Davos, a Senior Saudi oil functionary came up to him and threatened: “ If biofuels start to take off we will drop the monetary value of oil. ” Since so, Vinod has come up with a new recommendation that oil should be taxed if it drops below $ 40.00/barrel in order to counter monetary value use.

Ex-CIA manager James Woolsey and U.S. Senator Richard Lugar are besides vocal advocates of ethyl alcohol.

In 2005, Sweden announced programs to stop its dependance on fossil fuels by the twelvemonth 2020.

OPEC

The Organization of the Petroleum Exporting Countries ( OPEC ; pronounced /oES.pE›k/ , oh-pek ) is a trust of 12 states made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.

OPEC has maintained its central offices in Vienna since 1965, and hosts regular meetings among the oil curates of its Member Countries. Indonesia withdrew its rank in OPEC in 2008 after it became a net importer of oil, but stated it would probably return if it became a net exporter in the universe once more.

Harmonizing to its legislative acts, one of the chief ends is the finding of the best agencies for safeguarding the trust ‘s involvements, separately and jointly. It besides pursues ways and agencies of guaranting the stabilisation of monetary values in international oil markets with a position to extinguishing harmful and unneeded fluctuations ; giving due respect at all times to the involvements of the bring forthing states and to the necessity of procuring a steady income to the bring forthing states ; an efficient and regular supply of crude oil to devouring states, and a just return on their capital to those puting in the crude oil industry.

OPEC ‘s influence on the market has been widely criticized, since it became effectual in finding production and monetary values. Arab members of OPEC alarmed the developed universe when they used the “ oil arm ” during the Yom Kippur War by implementing oil trade stoppages and originating the 1973 oil crisis.

Although mostly political accounts for the timing and extent of the OPEC monetary value additions are besides valid, from OPEC ‘s point of position, these alterations were triggered mostly by old one-sided alterations in the universe fiscal system and the ensuing period of high rising prices in both the developed and developing universe.

This account encompasses OPEC actions both before and after the eruption of belligerencies in October 1973, and concludes that “ OPEC states were merely “ remaining even ” by dramatically raising the dollar monetary value of oil. ”

OPEC ‘s ability to command the monetary value of oil has diminished slightly since so, due to the subsequent find and development of big oil militias in Alaska, the North Sea, Canada, the Gulf of Mexico, the opening up of Russia, and market modernisation. OPEC states still account for two-thirds of the universe ‘s oil militias, and, as of April 2009, 33.3 % of the universe ‘s oil production, affording them considerable control over the planetary market.

The following largest group of manufacturers, members of the OECD and the Post-Soviet provinces produced merely 23.8 % and 14.8 % , severally, of the universe ‘s entire oil production. Equally early as 2003, concerns that OPEC members had small extra pumping capacity sparked guess that their influence on petroleum oil monetary values would get down to steal.

Current members

OPEC has twelve member states: six in the Middle East, four in Africa, and two in South America.

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