Oil and Gas Industry for Beginners (Ultimate Guide)

oil and gas industry for beginners

One of the key things in your life today is energy. You are using energy in many areas or facets of your life. If you are like me, you would be keen to know or understand where the fuel you use comes from. This resource is meant an introduction to oil and gas industry for beginners. It is meant to help you understand the sector and role the industry plays in global economy.

It is one of the biggest industries in the world in terms of the value it generates. The sector is estimated to generate about $3.3 trillion in revenues on an annual basis.

You should be aware that oil and gas are crucial to the global economy as you know it today. It is possible the clothes or some of the things you are using in your house today are part of the oil and gas products.

Oil and gas industry is very interesting when it comes to global economic politics.

The major oil producing nations, members of OPEC and other non-OPEC oil and gas producers are always involved in discussion about the oil and gas prices.

What is Oil and Gas?

Oil and gas are hydrocarbon resources, formed from decaying materials and extracted from the ground.

It is a chain of carbon and hydrogen atoms.

What type of industry is Oil and Gas?

You might be wondering what kind of an industry this is, and what kind of activities takes place in the sector.

Oil and gas industry, also known as petroleum industry is a sector that involves global processes of exploration, extraction, refining, transportation and marketing of petroleum products.

Some of the largest volume products of the oil and gas industry are fuel oil and petrol or gasoline.

What are the Three Sectors of Oil and Gas Industry

The oil and gas industry is divided into three sectors, namely;

  1. Upstream oil and gas sector
  2. Midstream oil and gas sector.
  3. Downstream oil and gas sector.

All activities in the oil and gas industry fall into these three segments.

While as a consumer you might not need to really get into the depth of what takes places within each sector, it could help if you understood the sector.

For professionals working in the oil and gas sector, or investors seeking to get into the sector, knowing the three sectors of oil and gas industry is very important.

It will help you to make the right investment decision.

What is Upstream Oil and Gas Industry?

Upstream oil and gas industry is that segment of the industry that deals with exploration, development and extraction of the oil or gas resources from the ground.

You can say it deals mainly with the raw material within the oil and gas industry.

When an oil and gas company raises investment money for oil exploration, this is the segment of the oil and gas industry they get involved in.

A lot of work and activities takes place in upstream oil and gas sector. It is a risky business, but also very lucrative.

Upstream Oil and Gas Process

If you have been keen on the upstream oil and gas sector, then you would be interested in how the process works.

This is one sector I have really enjoyed since I joined the upstream oil and gas industry in 2010.

Understanding how upstream oil and gas process works is something I wish everyone in the planet knew.

However, I know your interests and mine might not be the same. The fact that you are reading this indicates you might be keen to understand upstream oil and gas industry process.

Oilfield Services (OFS) Industry in Oil and Gas Sector.

When it comes to upstream oil and gas sector, there is always another sub-sector that is critical to the success of upstream activities.

That is the oilfield services sector.

It is actually a very huge sub-sector of the upstream oil and gas industry. In fact, some of the oilfield services companies like Schlumberger and Baker Hughes are big with huge turnovers.

What basically happens is that oil and gas exploration companies outsource most of the work to other specialist firms. This is what forms the crux of oilfield services.

Oilfield services companies are firms that provide support services to the oil and gas exploration firms.

The oilfield services are varied and include;

  • Drilling services.
  • Cementing
  • Logistics
  • Material handling.
  • Security services.
  • Seismic acquisition services.
  • Data storage and interpretation services.

Oilfield services sector contributes heavily to the success of the oil and gas sector as a whole.

How Upstream Oil and Gas Companies Make Money.

When you start or get into a business, your objective as an investor or entrepreneur is to earn a return from the product or services you are providing to the market.

It is a return on your investment for the value you add or create in the market.

There are many ways in which an upstream oil and gas company can make money.

What is Downstream Oil and Gas Sector?

Downstream oil and gas sector is the segment of the petroleum industry that deals with marketing of the final products to the consumer.

You can say it the customer-facing part of the oil and gas industry. This sector is equally huge and has a wide value chain within it.

Midstream Oil and Gas Sector.

I know you might ask, what is midstream oil and gas sector?

It can be confusing, but it really is simple.

As I mentioned above, the oil and gas industry has three key sub-sectors, and midstream is one of them.

Midstream oil and gas sector deals with the transportation of crude oil, refining and processing into consumer products.

In this segment, you find such things as crude oil pipelines, refineries and the associated infrastructure.

Is Oil and Gas a Dying Industry?

This is one of the common questions these days. There is a lot of talk of alternative sources of energy in the world, and this is making some people ask this question.

It is also common for the oil and gas industry to rise, and also fall.

This has been the case throughout the history of the industry. It is punctuated with booms and bursts.

You will the price of crude oil rising and this will lead to an increasing activities in the industry.

The reverse is also true. When the prices of crude oil fall or collapse like we witnessed in 2020, it leads to reduced industry activities.

In fact, fall of oil prices can lead to bankruptcies and loss of jobs across the industry.

Is Oil and Gas Industry Growing?

Now, this is an interesting question. You should be able to look at the available data and figure out whether the oil and gas industry is growing or dying.

Global oil demand is projected to rise by 38 million barrels a day to 115 mb/d by 2025 — annual average growth of 1.6 mb/d, or 1.7 per cent, over the years 2002–25.

At the global level, the transportation sector accounts for about 60 per cent of the rise in demand in 2000–25.

If there is a rise in demand and a recovery of the global economic activities, then this is going to grow the demand for the oil and gas products.

In my opinion, the oil and gas is growing and will continue to grow as long as there is a growing global demand.

What is the Future of Oil and Gas Industry?

With the above conversation, let us now turn our focus to the future of the oil and gas industry.

There are a lot of ideas and theories out there on how the industry will move into the future.

Given what has taken place over the last 24 months or so, the oil and gas industry is going to adapt and pivot to new technologies.

The concept of working from home or remote working is going to a constant feature going forward.

It is also possible that you will see an increased mechanization of rigs and also advanced usage of technology in oil or gas production.

Oil and Gas Jobs

Are you trying to secure a job in the oil and gas industry? If yes, then you need to meet certain conditions especially for the technical jobs in the sector.

It is also possible to get an oil and gas job without experience. To succeed in this, you need to know how to go about it.

Oil and Gas Training

When it comes to knowledge and skills, it is important to consider oil and gas training as part of your development in the industry.

As a professional, you need to keep improving yourself through training and up-skilling.

Which Course is Best for Oil and Gas?

There are many oil and gas courses in the market, and you are spoilt for choice. It depends on what you want and the objective of the course you would like to enroll in.

In this regard, you should think of some of the following courses. Best 11 courses in the oil and gas industry

Top 10 Oil and Gas Companies in the World

The top 10 oil and gas companies are;

  1. China Petroleum and Chemical Corporation.
  2. PetroChina Company Limited
  3. Saudi Aramco
  4. Shell
  5. BP
  6. ExxonMobil
  7. Total Energies
  8. Chevron
  9. Marathon Petroleum
  10. Lukoil

Oil and Gas Trading

As an investor, oil and gas trading is a skill you should have. It is an interesting part of the oil and gas business.

There are companies whose main business is actually oil and gas trading, and they make huge profits from the activity.

Crude oil trading is a very lucrative investment. However, you should only use experienced traders to be able to trade in oil and gas.

While the returns on your investments might be very attractive, the risk for loss is also very high and real. As an oil and gas industry for beginners resource, you should research and understand more about how oil trading works.

You can use several crude oil trading strategies to make a profit from your trading activities.

Oil and Gas Books for Beginners

One of the common questions I get is from people who want to know or understand the oil and gas industry is which books they should read.

In most cases, I recommend the following 19 oil and gas books for beginners, which forms a good starting point.

You can find some of the best oil and gas books to read from this resource.

Oil and Gas Industry Awards

In order to celebrate professionals and organizations, there are awards programs focused on the oil and gas industry.

They are aimed at promoting performance, reward employees or promote a certain cause within the industry.

While there are many oil and gas awards, the one am familiar with is the upstream oil and gas award, simply because I organize and host the awards.


In conclusion, petroleum industry is very important to how the world works. This resource is created as a guide to oil and gas industry for beginners, and you can use it to understand about the industry dynamics.

It is also important to note that many of the products we use on a daily basis are derived from oil and gas resources.

As the world discusses and thinks of reducing carbon emission and thus reduce consumption of hydrocarbons, you should be aware of the many benefits of oil and gas.

The energy transition is a hot topic today. However, I think the world still needs and shall continue to use fossil fuels.