Oil and Gas Industry Overview

Oil and Gas Industry Overview

• The oil and gas industry is a large and impactful sector, generating an estimated $5.3 trillion in global revenue in 2024.
• Hydrocarbons are the fundamental component of the oil and gas industry, formed from the decomposition of organic matter over millions of years.
• The oil and gas industry is divided into three main segments: upstream, midstream, and downstream.

Upstream

• Companies in the upstream sector focus on exploring and extracting crude oil and natural gas.
• Upstream activities include searching for potential reservoirs, drilling wells, and producing hydrocarbons.

Midstream

• The midstream sector focuses on the transportation, storage, and processing of crude oil and natural gas.
• Midstream companies move hydrocarbons from production sites to refineries and distribution points.

Downstream

• The downstream sector focuses on refining crude oil into usable products like gasoline, diesel, and kerosene.
• Downstream companies also handle the distribution and marketing of petroleum products.

The History of Oil Exploration in Nigeria

• German company, Nigerian Bitumen Corporation, initiated oil exploration in Nigeria in 1908, but it was interrupted by World War I.
• Shell D'Arcy (predecessor to Shell Petroleum Development Company) resumed exploration in 1937, but this was interrupted by World War II.
• Exploration resumed in 1947, leading to the discovery of the first commercial oil well in Oloibiri, Bayelsa State, in 1956.
• Commercial production and exportation commenced in 1958 by Shell Petroleum Development Company (SPDC) at a rate of 5100 barrels per day.
• In 1959, the sole concession rights granted to SPDC were revised and extended.