Segment of Oil Business

SUBJECT: UPSTREAM, MIDSTREAM AND DOWNSTREAM SEGMENTS OF OIL BUSINESS VALUE CHAIN.

DORUK UÇARER S004974-SEC 301-B

• Upstream segment of oil  business covers all activities related to Research & Development and Production  such as  searches for underground crude oil  and natural gas fields ; leases & permission from the land owners ; drilling  and operating the  oil&gas wells  and processing the the gas and oil. This section is  risky and complex because  companies have to deal with  very complex government polices and regulations. Therefore  companies usually prefer  to do the  upstream projects  in partnership structure like a production sharing agreement.

• Midstream segment of oil business covers  the activities of storing, trading&marketing , and transporting petroleum  crude oil and natural gas. The producers of  natural gas and crude oil sell and transport  their products  to refineries via pipelines; ships and barges  which  are used as the most common transportation platforms and also via railroads and  tank trucks which are  used  in some parts of the world.  

• Downstream segment of oil business covers  the activities of Oil Refining and Marketing.  This sector involves  the refinning  of crude oil  into products such as  gasoline, diesel ,LPG, jet  fuel, diesel oil, plastics etc. as well as  marketing &selling or distribution   of  those derived products of crude oil and the processed natural gas.  Therefore,   downstream  segment includes  oil refineries; petrochemical plants; distribution companies; retail outlets; gas stations etc.