In The Oil Industry, What Does Upstream, Midstream And Downstream Mean?


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The oil industry is divided into three major sectors. The sectors are defined to categorize the operations within each. The sectors are: (1) Upstream, (2) Midstream and (3) Downstream. However, the trend is to include the midstream operations within the downstream category.
The upstream sector includes the operations involved in searching for underground or underwater oil and gas fields and drilling exploratory wells and at the same time, operating the wells that recover to re-direct the crude oil or raw natural gas to the surface. This sector is also referred to as the 'Exploration and production or E&P sector'.
The midstream sector processes and stores, markets and transports crude oil, natural gas and the various natural gas liquids like ethane, butane and propane.
The downstream sector includes all oils refineries and petrochemical plants, petroleum product distribution via the affiliated retail outlets and natural gas distribution companies, within the operations. The downstream industry markets products such as gasoline and diesel and jet fuel. It also makes available asphalt, lubricants, plastics fertilizers and antifreeze and even pharmaceuticals. This is also the sector responsible for the availability of natural gas and propane.
The importance of the oil based industry has recently been responsible for a number of political implications too and that clearly explains how essential it is to world economy.

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