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What is Downstream?

Downstream
4 minuteminutos readde lectura
ByPor Anelisse Chanakos

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To recap the stages of operations in the oil and gas industry, we know that they are divided into different phases—upstream, midstream, and downstream. Each one fulfills specific functions necessary for carrying out the entire process of extracting, transporting, and refining raw material.

In this article, we will look at the downstream sector and how technology can help the challenges within the sector. 

Downstream

Downstream is the last stage of the process where crude oil refining tasks are carried out, along with the processing and purification of natural gas. This stage is the closest to the chain of production and sale of products that are generated from oil and gas, so it is imperative that everything goes according to plan.

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Downstream Operations: Production

The operations carried out in the downstream stage are diverse and are also carried out according to the demand or request from customers. In most cases, crude oil and gas are processed to obtain different types of products such as liquefied natural gas, different industrial oils, gasoline, rubber, plastics, fertilizers, pesticides, lubricants, among others. 

Each type of product requires a different process that is adjusted to the required specifications and complies with the established protocols. Constant monitoring is necessary to ensure that all operations proceed without any mishaps, thereby achieving the expected product quality. These products directly influence different sectors outside the oil and gas industry, such as agriculture and medicine. As such, guaranteeing the highest quality of these processes is of utmost importance.

Downstream Operations: Distribution & Marketing

To facilitate the distribution of finalized oil and gas products, refineries are usually located in sectors close to where the population is concentrated. This prioritizes potential customers—whether large companies or local suppliers—based on distance, to assess the value that will be generated from sales while considering transportation costs. 

Petrol providers are one of the key players that make most of the sales, followed by the direct purchase of products by factories. In the case of gas stations, they must have a good marketing plan that allows them to stand out from the competition because the product, in most cases, is similar to the rest. That is why the oil industry is highly competitive and requires workers with great ingenuity to highlight the products they have for sale. 

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Using IT to help with Downstream Operations

In this technological age, industries of all varieties are using modern technology to navigate traditional industry problems. The use of apps and other software has allowed companies to tackle industry challenges to ensure they produce quality products efficiently. 

In this technological age, industries of all varieties are using modern technology to navigate traditional industry problems. The use of apps and other software has allowed companies to tackle industry challenges to ensure they produce quality products efficiently. 

Downstream is one of the processes that defines the final use of extracted oil and gas. The raw material goes from being an element to a final product that adapts to the needs and demands of different sectors and is also an essential resource for many. To take advantage, companies will have to highlight the qualities of their specific products to position themselves in the market correctly.

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