oil

Oil exploration represents the very first piece of the long petroleum value chain that ultimately brings gasoline to the gas station at which you fill your Ford Explorer. Exploration and production are often referred to as the "upstream" pieces of the value chain, as compared to refining, distribution, and marketing, which are typically considered downstream activities. The process of oil exploration looks a lot like the stylized example above. A company identifies a potentially attractive area to drill, either onshore (i.e., on land) or offshore (i.e., in the ocean). This area could be attractive because its near another major discovery, or because it used to be an operating well that has now dried up, or because government has released some data that suggest the presence of hydrocarbons (i.e., gas and oil).