Petroleum is a naturally occurring liquid found in rock
formations. It consists of a complex mixture of hydrocarbons of various molecular
weights, plus other organic compounds. It is generally accepted that oil is formed
mostly from the carbon rich remains of ancient plankton after exposure to heat and
pressure in Earth's crust over hundreds of millions of years. Over time, the decayed
residue was covered by layers of mud and silt, sinking further down into Earth’s crust
and preserved there between hot and pressured layers, gradually transforming into oil
The petroleum industry includes the global processes of
exploration, extraction, refining, transporting (often by oil tankers and pipelines),
and marketing petroleum products. The largest volume products of the industry are fuel
oil and gasoline (petrol). Petroleum (oil) is also the raw material for many chemical
products, including pharmaceuticals, solvents, fertilizers, pesticides, and plastics.
The industry is usually divided into three major components i.e., upstream, midstream and
downstream. Midstream operations are usually included in the downstream category.
Petroleum is vital to many industries, and is of importance to
the maintenance of industrial civilization in its current configuration, and thus is a
critical concern for many nations. Oil accounts for a large percentage of the world's
energy consumption, ranging from a low of 32% for Europe and Asia, to a high of 53% for
the Middle East.
Other geographic regions consumption patterns are as follows
i.e., South and Central America (44%), Africa (41%), and North America (40%). The world
consumes 30 billion barrels (4.8 km) of oil per year, with developed nations being the
largest consumers. The United States consumed 25% of the oil produced in 2007. The
production, distribution, refining, and retailing of petroleum taken as a whole
represents the world's largest industry in terms of dollar value.
Governments such as the United States government provide a heavy
public subsidy to petroleum companies, with major tax breaks at virtually every stage of
oil exploration and extraction, including the costs of oil field leases and drilling