Oil and Gas - Energy Information Administration

The history of discovering oil 

The origin of the oil and gas industry is not of recent times. Petroleum, which is the current major influential factor in the fields of technology, society, economy and politics, has its origin in the early 7 th Century (Hirsch, Bezdek & Wendling, 2005). The major influence behind the discovery and rise of oil was the major invention of the internal combustion engine. Herodotus and Diodorus Siculus confirm that asphalt was used in the building of the walls and towers of Babylon four hundred years ago (Hirsch et al., 2005). There were oil pits located close to Ardericca. Great quantities of oil were also discovered in Greece at the Ionian Islands. Other huge quantities of oil were discovered along the banks of river Issus. Oil was also discovered around the same time in Dacia, a province in Roman. 

It is also important to note that the earliest oil wells in the world were drilled in China as early as 347 AD (Hirsch et al., 2005). These wells had depths of approximately 240 meters. The drilling process of these wells involved the use of bits attached to the bamboo poles. The oil was then burned to the point of evaporation in order to produce salt. Extensive bamboo oil pipelines connected oil wells to the salt springs in China by the 10 th Century (Hirsch et al., 2005). Records in China and Japan show traces of the use of gas in lighting as well as heating. In Japan, petroleum was referred to as the burning water during the 7 th Century. 

It is also important to note that oil and gas also discovered in the Middle East, where the first streets, like in Baghdad, were paved using tar. This tar was caught from the petroleum, which was accessible from the natural gas fields within the region. Moreover, oil fields were discovered and exploited in the region near the modern Baku in Azerbaijan during the 9 th Century. These oil and gas fields discovered in Baku, Azerbaijan were explained by an Arab geographer called Abu Al-Hassan in the 10 th Century (Hirsch et al., 2005). Moreover, Marco Polo was able to give a further description of the oil exploitation in Baku in the 13 th Century. Marco Polo mentioned that there was an output of wells as many shiploads. The distillation of petroleum was then explained by a Persian alchemist known as Muhammad Zakariya. The Persian chemists also did distillation of crude oil to make flammable products for military use. In America, oil was first discovered in the year 1595 at the Trinidad Pitch Lake. 

There is also the history of the modern petroleum industry. The modern petroleum started in the 19 th Century with the refining of crude oil to make paraffin. In the year 1847, a Scottish chemist called James Young discovered natural petroleum seepage within the Riddings colliery at Alfreto, Derbyshire (Krichene, 2002). From this seepage, Young was able to distill light and thin oil, which could be used as lamp oil (Hirsch et al., 2005). He also simultaneously obtained thicker oil substance that would be used to lubricate machinery. Young later set up a small business that refined and sold oil products. From this discovery, the basis for the growth and development of the petroleum and gas industry was established. The idea started spreading and commercial oil wells were set up with companies for the refining the crude oil being produced were established. 

The main oil companies 

The seven sisters made up the largest oil companies in the world. The seven sisters dominated the global oil and gas industry in the 1940s to the 1970s (Helman, 2015) . The seven sisters included: 

Anglo-Persian Oil Company 

Gulf Oil 

Standard Oil of California 

Texaco 

Royal Dutch 

Standard Oil of New Jersey 

Standard Oil Company of New York 

However, most of the seven sisters are no longer there currently because a lot them changed their names while3 others merged or were acquired. Currently, the main oil and gas companies are ranked by the size of revenue. 

Sinopec 

Sinopec is ranked as the largest oil and gas company in the world currently. Its revenue level is currently over $450 billion (Helman, 2015) . The country of origin for Sinopec company is China and it was founded in the year 2000. Its number of employees is 358,571. Sinopec is also referred to as the China Petroleum and Chemical Corporation LTD. This company is a subsidiary of the China Petrochemical Corporation. In the whole of Asia, Sinopec is the largest annual oil refiner, despite the fact that it produces only a quarter of the total crude oil production of PetroChina ( Arango and Krauss, 2013) . Its strategy has largely been based on acquiring and partnering with a number of other petroleum and gas companies across the world. 

PetroChina 

China National Petroleum Corporation is the second largest company in the world. Its revenue is currently at $432 billion (Helman, 2015) . This company was founded in the year 1988 and has a total of 1,636,532 employees. This company is owned by the government of China. It operates in four oil and gas business segments, which include: 

Exploration and production 

Refining and chemicals 

Marketing and natural gas 

Pipeline 

Royal Dutch Shell 

The current total revenue level of Royal Dutch Shell is $421.1 billion (Helman, 2015) . This company has been in the industry for a very long time since it was established in the year 1907. It has 94,000 employees and is based in Netherlands. There was a time this company wasd the leading in the world. 

ExxonMobil 

There is also ExxonMobil, which has a revenue level of $411.94 billion (Helman, 2015) . This company is based in the United States of America and has 75,300 employees. It was established in the year 1999. This company is the result of the merger that happened between the two Standard Oil Companies of New York and New Jersey. This is the largest company in the U.S corporate history. 

There are many other players in the petroleum and gas industry, which include: 

Saudi Arabian Oil Company 

British Petroleum Company 

Total S.A 

Kuwait Petroleum Corporation 

Types of oil, quality indicators and the big producing countries 

Types of oil 

There are four main types of oil, which include: 

The Very Light Oils / Light Distillates: Examples are jet fuel, gasoline, kerosene, petroleum ether and petroleum spirit. They are highly volatile and do evaporate very fast 

Middle Distillates: These are the grade 1 and 2 fuel oils as well as diesel. They are moderately volatile. 

Medium Oils: They are less volatile. 

Heavy Fuel Oils: This type includes the heavy crude oils and the grade 3, 4, 5 and 6 fuel oils. They have very slow and minimal evaporation hence highly toxic. 

Quality indicators 

The indicators of the quality of oil include its heaviness and volatility. Heavy and less volatile oil is quite toxic, especially if it spills to the ocean. High quality oil is the one that is very volatile and light. This means it is less toxic. Moreover, such oil is highly flammable hence quite useful. 

Big oil producing countries 

Currently, the United States of America tops the list of the big oil producing nations with 11,973,000 bbl per day followed by Saudi Arabia at 11,624,000 bbl per day (Helman, 2015). Other big oil producing countries include Russia and China. 

References 

Arango, T., & Krauss, C. (2013). China is reaping biggest benefits of Iraq oil Boom . New York Times,  2. 

Helman, C. (2015). The World's Biggest Oil and Gas Companies-2015. Forbes. 

Hirsch, R. L., Bezdek, R., & Wendling, R. (2005, May). Peaking of world oil production. In  Proceedings of the IV International Workshop on Oil and Gas Depletion  (pp. 19-20). 

Krichene, N. (2002). World crude oil and natural gas: a demand and supply model.  Energy economics ,  24 (6), 557-576.