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The Economic Situation of the Oil & Gas Industry

The oil and gas industry, including exploration and production, consists of about 7,000 companies who pull in a combined, estimated revenue of around £450 billion. However, the production and associated revenue are fragmented; around 10% of companies generate approximately 60% of this figure. Demand for oil and gas is caused by economic activity, population growth and the need for energy for residential, industrial and transportation uses. The growth of an individual company is determined by the success rate of new finds, as well as the ability to continue to produce from existing sites.

Larger companies have the upper hand, having greater access to capital and the capacity to buy smaller companies or propagate amalgamations. Smaller companies rely on their abilities to focus on and develop expertise in a few geographical areas. In addition, oil and gas competes with other fuel-types, such as coal, nuclear power and hydro-electricity. In addition, other sources of energy are emerging, such as ethanol and bio-diesel and there are other forms of application arriving on the market, such as the new generation of hybrid-electric car.

Oil and gas are found in huge, underground basins that meet certain geological criteria. As well as creating three-dimensional maps of underground structures and using seismic waves to ascertain a site’s potential, exploratory drilling is still a major factor in finding oil and gas. Last year, the number of exploratory drillings that took place exceeded 53,500. Once an area has been designated as having promise, the area is cleared and a drilling rig and crew are brought in to begin the process of extracting the resources that have been found.

Oil and gas jobs generally fall in to one of two categories: upstream and downstream. Upstream jobs are found in the process of obtaining oil and gas from natural resources: drilling jobs are upstream jobs. Other jobs are likely to include those in construction and those involved in production facilities. Not all upstream jobs take place on land; for many, part of the attraction of this industry is its variety. Gas and oil fields are also developed below sea level, such as in the North Sea and the sub-sea sites recently discovered in West Africa. These require specialists to find and extract the resources available.

Downstream jobs involve the transportation of oil and gas in their basic forms, the liquefaction of those substances and their processing. While upstream jobs tend to be comparatively more transitory, being based on exploration and ultimate extraction, it is in the downstream category that gas and oil careers are made; while oil rig jobs, for example, will only last as long as the resource is there, marketing jobs can become life-long opportunities as the team packages the combined products across the globe.

The oil and gas industries are two of the world’s biggest and most profitable enterprises. They employ huge numbers of staff that work in an incredible range of department, from those on the ‘front-line’ to those who design advertising campaigns to those who put it in our vehicles.

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