Oil & Gas Operations: Overview

The oil and gas industry in the US, composed of oil and gas exploration and production, oil and gas refining, transportation and marketing and integrated oil and gas, grew to an estimated $1.1 trillion in 2004,

The US oil and gas-drilling sector was the industrys primary revenue source in 2003, worth an estimated $30 billion and accounting for around 61% of the sectors global value. Though the US government has been broadly supportive of the industry's campaign to allow further exploration and production investment in North America, pressure from the environmental lobby and strong state and regional governments has so far hindered approval of new projects, leaving the US with an almost non-existent spare capacity.

Ensuring the security of US energy supply remains a key strategic issue confronting the energy industry. While the recent spike in the price of crude oil has boosted the revenues of the US oil and gas majors, the wider volatility of oil prices means the oil and gas sector as a whole is going through a period of instability making long term planning increasingly fraught.

The oil and gas operations industry is dominated by companies classified under integrated oil and gas, including ExxonMobil, Royal Dutch/Shell Group, BP, ChevronTexaco and Total. In 2004, the industry has had to adapt to the dramatic rise in Chinese demand for oil as well as the impact of the US hurricanes, which severely damaged oil and gas installations in the Gulf of Mexico. ChevronTexaco has estimated that hurricane damage will cost it up to $175 million in the final quarter of 2004.

source:www.reuters.com