Definition of Crude Oil and Natural Gas:
Crude oil is a natural liquid chemical formed through the decomposition process of fossils buried deep within the earth's crust over millions of years. Crude oil is extracted from deep layers beneath the earth's surface and undergoes refining processes to produce familiar products such as gasoline, diesel, and lubricating oil. The significance of crude oil extends beyond its use as a raw material for fueling transportation vehicles; it is also a crucial ingredient in many industrial and manufacturing sectors.
On the other hand, natural gas is a mixture primarily composed of methane (CH4). Natural gas, similarly to crude oil, is formed through natural processes within the earth's crust and is extracted from natural gas fields. Natural gas is recognized as a clean and environmentally friendly energy source, widely used as a fuel in power plants, households, and industrial production areas. Additionally, this gas mixture is applied in various industries for producing products such as fertilizers, plastics, and chemicals.
Both crude oil and natural gas play essential roles in providing energy for daily production activities. However, the use of these two resources requires careful management to ensure sustainability and minimize negative environmental impacts.
Figure 1. First Vietnamese offshore drilling platform
Exploring and Exploiting Oil and Gas in Vietnam:
Vietnam's oil and gas resources are diverse and abundant, spreading across the country. Here are some prominent oil field:
Cuulong Basin:
- Bach Ho Field: Crude oil - Daily production: 10,500 tons (approximately 79,000 barrels)
- Black Lion, Golden Lion, White Lion, and Brown Lion Fields: Crude oil and Natural gas - Daily production: 75,000 barrels of oil and 75 million cubic meters of gas sold
- White Rhino Field: Crude oil - Daily production: 34,000 barrels of oil
Nam Con Son Basin:
- Lan Tay – Lan Do Field: Natural gas - Daily production: ~9.5 million cubic meters of gas exported to shore
- Double Dragon – Western Double Dragon Field: Natural gas - Daily production: ~3.4 million cubic meters of gas exported to shore
- Hai Thach – Moc Tinh Field: Natural gas - Daily production: ~5 million cubic meters of gas exported to shore
Malay – Tho Chu Basin:
- PM3-CAA & 46CN Fields: Natural gas - Daily production: ~5.6 million cubic meters of gas exported to shore
O&G corporation classification:
Upstream: Upstream oil and gas enterprises play a crucial role in the global energy industry. Upstream, also known as the exploration and production sector, refers to the stages of operations in the oil and gas industry encompassing all activities of exploration, drilling, and extraction. The ultimate goal of upstream activities is to discover and bring oil and gas into production. Therefore, upstream companies are responsible for the extraction, exploitation and production of oil and gas products from upstream sources, where natural oil and gas exist in deep layers of the earth. Examples include PVS, PVD, etc.
These enterprises often face complex technical, environmental difficulties. Exploration and exploitation oil and gas resources in challenging geographical areas require significant investments in technology and resources. Additionaly, they must also adhere to strict regulations regarding environmental protection and occupational safety, which made upstream market become one of the most stringent sector in terms of standards.
Figure 2. Procedure of processing crude oil from upstream to downstream
Midstream: Midstream oil and gas enterprises play a vital role in the process of transforming and distributing crude oil and natural gas from extraction facilities to processing manufactory and then to end consumers and industrial businesses. Their activities include transportation, storage, and processing of oil and gas products before they are distributed to various customer entities, including both consumers and industrial enterprises. Examples include PVT, etc.
The mission of midstream oil and gas enterprises involves not only moving products from point A to point B but also managing storage, preserving quality, and ensuring safety during transportation and processing. They must utilize modern transportation vehicles and systems while adhering to industry regulations and standards.
Downstream: In the oil and gas industry, the concept of a downstream company typically refers to a business involved in the processing, refining, and distribution of petroleum products. Unlike upstream activities, which focus on exploration and exploitation, downstream activities occur after crude oil and natural gas have been extracted. Downstream companies play a crucial role in converting raw materials into a variety of end products for consumer and industrial use. Examples include GAS, etc.
These companies operate refineries where crude oil is processed into various products such as gasoline, diesel, aviation fuel, and other petroleum derivatives. Additionally, downstream companies are responsible for distributing these processed products to end consumers through agents and retail outlets such as gas stations.
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(*) Disclaimer: This report is intended to provide information for investors to reference. The views, forecasts, and estimates in this report represent the opinions of the author at the time of publication and are subject to change without notice. Investors should form their own independent assessments based on the information in this report.
