The oil and gas industry offers a plethora of highly lucrative investment opportunities to qualified investors, but creating a robust portfolio is easier said than done, especially if you are just getting started. While you can always count on the investment consultants at Main Oak Capital to help you create an effective oil and gas investment strategy, as an investor, you too should be well aware of the basics. That is the reason why in this blog post, we’ll provide a brief overview of the various segments in the oil and gas industry, starting with some basics. Read on
The oil and gas companies can be broadly categorized into three segments, namely upstream, midstream, and downstream, each differing in terms of purpose as well as operations. Let’s take a closer look at each, to understand the differences.
Upstream oil and gas companies are basically exploration and production companies focused on discovering underground hydrocarbons and identifying viable fields. These companies then take care of all further activities, such as drilling, well development, extract processing, and eventually restoring the sites to their natural states. Upstream companies can be further divided into two categories, namely land and offshore, which differ in terms of the drilling location and the equipment needed for the project.
Midstream companies, despite being generally smaller in size than upstream companies, play an important support function in the oil and gas production process. These companies generally undertake activities, such as transporting and storing the crude oil drilled by the upstream companies, which helps in streamlining the entire process. Midstream companies take the onus of transporting the crude oil to processing facilities, within the stipulated timelines, that too while ensuring compliance with multiple transportation directives.
The downstream oil and gas companies are mainly focused on three tasks – refining petroleum crude oil, processing and purifying raw natural gas, and lastly, marketing and distributing the products manufactured from the energy resources. The revenue of downstream companies relies on the sale of processed products, such as gas, diesel, jet fuel, fuel oils, kerosene, lubricants, waxes, heating oil, asphalt, LPG, and natural gas.
Though it goes without saying that oil and gas investment projects hold the potential to deliver exceptionally high returns, it is important for investors to partner with a trusted and knowledgeable energy investment specialist. A partner such as Main Oak Capital. Talk to us to learn more about how we can help strengthen your oil and gas investment strategy, and the various oil and gas investment opportunities in Texas we can add to your portfolio. Simply call (972) 544-1645 or fill out our contact form and we’ll take it from there.