KFG Resources in Search of the Wilcox Formation's Riches

High oil prices have a habit of creating winners and losers. It's a complex equation, to be sure, since price hikes are the result of multiple causes, including the fact that "easy" oil reserves are increasingly difficult to come by.

For oilmen with the correct experience and some faith in serendipity, high oil prices indicate the opening - or reopening - of giant swathes of land for drilling and production, and the potential for big profits.

I spoke with Bob Kadane, the president of KFG Resources (TSX.V:KFG) about how oil prices have had an effect on one formation in particular - the Wilcox Oil and Gas Formation - and learned a lot about the true story behind petroleum exploration in the US that every investor should know. It's a fascinating story.

First off, the stakes are huge. While proponents of the peak oil theory may be correct in stating that oil reserves worldwide are increasingly depleted, there is still room for substantial oil production from the Wilcox Formation.

For example, using a geology-based assessment methodology, the U.S. Geological Survey in 2007 estimated 110 million barrels of undiscovered oil, approximately 3 trillion cubic feet of gas and over 500 million barrels of natural gas liquids throughout the Wilcox Formation. Much of that would be contained in Mississippi and Louisiana, where KFG Resources is will soon be drilling.

The Wilcox Formation is located some 6,500 feet below sea level in Mississippi and Louisiana, inland from the Gulf of Mexico. It is just one of many strata of the earth buried underground by millions of years of erosion and land movement caused by wind, water and tectonic motion.

The last time the sand, silt and clay that comprise the Wilcox Formation were exposed to air was about 50 million years ago, during the early Eocene period, when the earth's poles were covered by forests and the shoreline of the Gulf of Mexico lay many kilometers inland from where it is found today.

Huge pockets of oil formed by decomposing plant matter from distant epochs populate the Wilcox Formation, which can be harder to find than other oil reserves due to the fact that the oils are not kept in place by thick shale beds or other rock that are relatively easy to spot using seismic. Instead, the formation is up to 2,500 feet thick, and mostly sand. As such, other, more traditional methods are used to find deposits in the oil rich formation.

Just how rich? Well, as mentioned earlier, USGS has reported more than 100 million barrels of oil plus gas and natural gas liquids geologically proven in the area. But what about the standard petroleum measure of "barrels per acre foot"?

According to Kadane, the standard oil reservoir in the Rocky Mountains might yield from 75 to 250 barrels of oil per acre foot - meaning that one foot of sand over one acre of land would yield between 75 and 250 barrels, depending on such factors as porosity and oil content.

I did my own homework, too: A search of other companies producing oil reveals a high of 400 barrels per acre foot in Nevada, 350 in Texas, 300 in Oklahoma and so on. The numbers vary, of course, and in oil rich areas such as Alberta and the Middle East, they are much higher.

But the Wilcox Formation yields an average of 600 barrels per acre foot, Kadane says.

"I have been associated with some reservoirs that have recovered in excess of 1,000 per acre foot - it's a high porosity sand," he noted.

Simply put, Kadane says, "It makes the Wilcox Formation - if you can find it - probably the most profitable return on your investment on shore in the United States. It's elusive but it makes a very lucrative target once you're able to pin it down and find it."

Kadane was born and raised in communities that lay on the earth above the Wilcox Formation. Starting in the 1940s, Kadane's father drilled the same formation to great success. Kadane recalls his father putting dynamite into a well to get the oil flowing in about 1942 - when he opened the valve, a huge geyser of oil shot some 150 feet into the sky. Kadane still has a 16-millimeter film of the event, he says.

The Wilcox Formation lost favor due to its low success ratio and the fact that modern technology, such as seismic, doesn't help much in finding its reserves. To find Wilcox oil and gas, oilmen like Kadane use traditional methods and wisdom gained through experience to improve chances of success. To profit from them, you have to know everyone working the Wilcox Formation, where they are drilling, and where they have succeeded and failed.

"The last Wilcox well we found that amounted to anything was 1989. We haven't done a lot there since then, and that field still produces and is part of our main reserve and is almost 20 years old. It's just three wells and it's produced about 1.3 million barrels, I think."

Now that peak oil has emerged to be a law rather than a theory, and with prices up and American supply diminished, the math is right again to make a success of the Wilcox Formation.

"In the Wilcox Formation, the success rate on wildcat drilling - which means no production within a mile or so, or virgin, undrilled land - is between 10 and 15 percent," explains Kadane. "The success rate of offset is in the 50 percent range in terms of success." That indicates that in many cases it will be most prudent to drill next to where other teams have already drilled, but failed to find the goods.

"With the price of oil and gas above $70 per barrel, suddenly new exploration companies are down in the Louisiana Salt Basin area. The higher price of oil makes the lower success rate more profitable.

"You see, when more players are in the field drilling, it helps to eliminate where oil is not, and tells you where it may be. Lot of people do one or two holes where there should be oil. Sometimes, if they come up dry, they give up. You go in there and drill a third or fourth hole, because you know it's there - and bingo, you hit paydirt. So the other guys have in essence done the work already.

"By going in and completing more holes you know your chances of hitting oil have improved without spending a dime."

The other players at KFG add the other essential ingredients to the brew that Kadane predicts will see success in 2008. President of Operations Stephen Guido owns a drilling rig good to below 10,000 feet. Geologist Dave Easom has 25 years experience in the area and has worked closely with seismologist Pitman Calhoun, who is said to be one of the best lower Tuscaloosa and Wilcox seismologists in that whole part of the country. Kadane says that Calhoun and Easom have completed three 3D seismology shoots in the Lower Tuscaloosa Formation in the region, all of them successful.

"I've got a network of guys who know what they're doing," he emphasizes. "They've been there and done that here since they were kids. They know every player on the scene and every dip in every field in the state of Louisiana."

Coming Up: In the next piece, I'll talk about how KFG Resources plans to use 3D seismic data with subsurface well log data to create a drilling plan to hit both the Wilcox Formation and the Lower Tuscaloosa - simultaneously.

This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.

About the Author

Resourcex Investor is an internationally distributed newsletter about emerging junior resource companies. Sign up for a free 1-month trial to our newsletter and get instant access to news and investing tips that have helped many of our readers make more money. http://www.resourcex.com

Exploring the world of Oil and Gas: Possible Careers

In today's society, news headlines are fixated on the price of oil and gas, as overseas negotiations and an ongoing battle in the Middle East continue to affect the perception of this vital commodity. However, behind the scenes - there are plenty of employees who make decisions, transport the oil, and facilitate business deals for the United States. When looking to learn more about the careers centered on oil and gas, consider the following employment possibilities:

Exploration Manager

Discovering vital oil and gas deposits is a valuable job in this day and age that will only continue to increase in importance as resources become scarcer. An exploration manager leads and operates the expeditions to discover more oil and gas. While evaluating the possibilities and value of a potential site, knowledge of federal, state, and local regulations is a must. A bachelor's degree (and preferably a master's degree) is required in this field. Those with eight to 10 years of experience are most likely chosen for this position. The average yearly salary for this career choice is between $157,665 and $208,954.

Oilwell Pumper

While you are quite familiar with the employee who may pump your gas at a service station, have you ever stopped to think how oil is manufactured? An oilwell pumper is responsible for the daily maintenance and care of oil wells. They operate the injection equipment and oversee oil production - making sure to keep in line with standard operating procedures. This kind of pumper will keep reports and make assessments of the volume and pressure of gas and oil contained inside of a well. A high school diploma or its equivalent is needed for consideration. Zero to two years of experience within the field is suggested, as you should display a familiarity regarding the concepts, practices, and procedures within this particular field. Usually, a supervisor or manager manages their progress and projects. The typical salary for this job is between $35,348 and $57,176.

Pipeline Engineer

A pipeline engineer may work with natural and/or liquid gases - heading projects; working with operations and marketing; selecting pipeline routes; reviewing construction sketches; conducting financial tracking and reporting; and provide technical training to other members of the staff. The ideal candidate for this type of position has five to 15 years of experience in transmission size pipeline engineering, and a bachelor's degree in engineering. Preference is usually given to those with a PE certification. The salary for this job varies. For instance, in Texas - you can expect to earn up to $105,000, which is usually contingent upon the amount of experience you possess.

Gas Supply Manager

As a gas supply manager, you are responsible for getting a hold of the required supplies of gas for various companies. Contract negotiation with acceptable sources become a major part of this job, as well as making sure that all conditions are fulfilled. You will oversee the appropriate transport and storage of these gas supplies. Over time, you will create a working relationship with suppliers. A bachelor's degree is required for this position - coupled with at least 10 years of experience in the field. Experience in a related area is also accepted. The average yearly salary for a gas supply manager is found between $89,001 and $136,754.

Rate Analyst

Energy operational costs are the focus of this particular job, which has employees analyzing the gathering and transporting rates for gas. Having knowledge of Federal Energy Regulatory Commission policies is a must with this career. Most often, an advanced degree within an area of specialty is expected. The majority of rate analysts have four to six years of experience in the field already under their belt. A variety of different tasks are expected of this job position, which typically earns between $61,482 and $78,854.

Electric and Gas Operations Superintendent

As an electric and gas operations superintendent, your responsibility is to oversee the work crews in charge of constructing, maintaining, and repairing systems associated with electricity and gas. A superintendent creates plans and watches over the process of their employees by managing crew supervisors. A bachelor's degree is sometimes required for this position, as well as at least eight years of experience within the field. The job also centers on a variety of various concepts, practices, and procedures. In this particular career path, extensive experience and judgment truly come in handy when planning and setting goals. Of course, a superintendent is expected to lead and guide the work of other employees. The earning potential for this job is between $71,607 and $106,982.

College Courses

To get an idea of the potential college courses associated with a career in oil and gas - you may face Oil & Gas Field Operations, Hydrocarbons, Oil Field Production, Oil Field Processing, intense labs, field experience, and testing on wastewater treatment, crude oil handling, artificial lift systems, and drilling techniques.

About the Author

Search and post jobs, resume, read job informations, government jobs, online jobs, federal jobs, hot jobs, usa jobs, canada jobs, at Seek4Jobs.net.

Palestine’s Natural Gas Confusion

alestinian officials secured a deal with British Gas in the late 1990s allowing the exploration and drilling for natural gas and oil reserves in the Mediterranean Sea. In September of 2000, President Yasser Arafat himself watched anxiously as their hopes were rewarded with a huge flame shooting into the sky from a British Gas well 22 miles off the coast of the Gaza Strip. Arafat called the impressive showing of anticipated wealth a “gift to God to us, to our people, to our children,” stating further that the reserves would “provide a solid foundation for our economy, for establishing an independent state with holy Jerusalem as its capital.” In the eight years since this discovery, political jockeying and grappling has much stymied the exportation efforts of Palestine, hindering their ability to truly maximize their reserves and boost economic growth.

In July 2005, Palestinian’s chief export hope, Israel, signed a deal to import natural gas not from its gas-rich neighbor, Palestine, but instead circumventing them to import their natural gas fuel needs from Egypt. Purely a move motivated by politics, Prime Minister Ariel Sharon opposed any financial agreement made with the Palestinian Authority fearing that any monies exchanged would be used to support terrorist operations against Israel. This Israeli deal squashed initial Palestinian hopes that the gas trade would motivate the formation of new jobs in Gaza and earn $40 million to $45 million in taxes annually to help assist in bolstering their government towards eventual statehood.

The Gaza Marine field promises a yield of approximately 1.2 trillion cubic feet of natural gas in its ample reserve. This large reserve of gas has the ability to provide much more than Palestine’s energy needs, which are minimal. British Gas entered into the last stages of talks, nearly reaching an agreement with Egypt as recently as 2006 to export a minimum of 1.5 billion cubic yards of natural gas annually for 50 years through a proposed Gaza-E Arish pipeline. This proposed deal was thrown a major road block by then British Prime Minister Tony Blair who decided that British Gas should give Israel one more chance at making the gas deal with Palestine, insisting that the gas could provide a large part of the energy needs of Israel’s rapidly growing economy. Though Israeli leaders recognized this growing need for gas, their opposition to trade with Palestine once again hobbled the hopeful bridging of gaps between the two. This has resulted in British Gas and Palestine resuming talks with Egypt, hoping to finalize a deal in early 2008, putting an end to the confusion which began with hope and anticipation of wealth nearly a decade earlier.

About the Author

About the Author: Robert Jent is the president of Triple Diamond Energy Corp. Triple Diamond Energy specializes in acquiring the highest quality prime oil and gas properties. For more information, visit http://www.triplediamondenergycorp.blogspot.com.

KFG Resources in Search of the Wilcox Formation's Riches

High oil prices have a habit of creating winners and losers. It's a complex equation, to be sure, since price hikes are the result of multiple causes, including the fact that "easy" oil reserves are increasingly difficult to come by.

For oilmen with the correct experience and some faith in serendipity, high oil prices indicate the opening - or reopening - of giant swathes of land for drilling and production, and the potential for big profits.

I spoke with Bob Kadane, the president of KFG Resources (TSX.V:KFG) about how oil prices have had an effect on one formation in particular - the Wilcox Oil and Gas Formation - and learned a lot about the true story behind petroleum exploration in the US that every investor should know. It's a fascinating story.

First off, the stakes are huge. While proponents of the peak oil theory may be correct in stating that oil reserves worldwide are increasingly depleted, there is still room for substantial oil production from the Wilcox Formation.

For example, using a geology-based assessment methodology, the U.S. Geological Survey in 2007 estimated 110 million barrels of undiscovered oil, approximately 3 trillion cubic feet of gas and over 500 million barrels of natural gas liquids throughout the Wilcox Formation. Much of that would be contained in Mississippi and Louisiana, where KFG Resources is will soon be drilling.

The Wilcox Formation is located some 6,500 feet below sea level in Mississippi and Louisiana, inland from the Gulf of Mexico. It is just one of many strata of the earth buried underground by millions of years of erosion and land movement caused by wind, water and tectonic motion.

The last time the sand, silt and clay that comprise the Wilcox Formation were exposed to air was about 50 million years ago, during the early Eocene period, when the earth's poles were covered by forests and the shoreline of the Gulf of Mexico lay many kilometers inland from where it is found today.

Huge pockets of oil formed by decomposing plant matter from distant epochs populate the Wilcox Formation, which can be harder to find than other oil reserves due to the fact that the oils are not kept in place by thick shale beds or other rock that are relatively easy to spot using seismic. Instead, the formation is up to 2,500 feet thick, and mostly sand. As such, other, more traditional methods are used to find deposits in the oil rich formation.

Just how rich? Well, as mentioned earlier, USGS has reported more than 100 million barrels of oil plus gas and natural gas liquids geologically proven in the area. But what about the standard petroleum measure of "barrels per acre foot"?

According to Kadane, the standard oil reservoir in the Rocky Mountains might yield from 75 to 250 barrels of oil per acre foot - meaning that one foot of sand over one acre of land would yield between 75 and 250 barrels, depending on such factors as porosity and oil content.

I did my own homework, too: A search of other companies producing oil reveals a high of 400 barrels per acre foot in Nevada, 350 in Texas, 300 in Oklahoma and so on. The numbers vary, of course, and in oil rich areas such as Alberta and the Middle East, they are much higher.

But the Wilcox Formation yields an average of 600 barrels per acre foot, Kadane says.

"I have been associated with some reservoirs that have recovered in excess of 1,000 per acre foot - it's a high porosity sand," he noted.

Simply put, Kadane says, "It makes the Wilcox Formation - if you can find it - probably the most profitable return on your investment on shore in the United States. It's elusive but it makes a very lucrative target once you're able to pin it down and find it."

Kadane was born and raised in communities that lay on the earth above the Wilcox Formation. Starting in the 1940s, Kadane's father drilled the same formation to great success. Kadane recalls his father putting dynamite into a well to get the oil flowing in about 1942 - when he opened the valve, a huge geyser of oil shot some 150 feet into the sky. Kadane still has a 16-millimeter film of the event, he says.

The Wilcox Formation lost favor due to its low success ratio and the fact that modern technology, such as seismic, doesn't help much in finding its reserves. To find Wilcox oil and gas, oilmen like Kadane use traditional methods and wisdom gained through experience to improve chances of success. To profit from them, you have to know everyone working the Wilcox Formation, where they are drilling, and where they have succeeded and failed.

"The last Wilcox well we found that amounted to anything was 1989. We haven't done a lot there since then, and that field still produces and is part of our main reserve and is almost 20 years old. It's just three wells and it's produced about 1.3 million barrels, I think."

Now that peak oil has emerged to be a law rather than a theory, and with prices up and American supply diminished, the math is right again to make a success of the Wilcox Formation.

"In the Wilcox Formation, the success rate on wildcat drilling - which means no production within a mile or so, or virgin, undrilled land - is between 10 and 15 percent," explains Kadane. "The success rate of offset is in the 50 percent range in terms of success." That indicates that in many cases it will be most prudent to drill next to where other teams have already drilled, but failed to find the goods.

"With the price of oil and gas above $70 per barrel, suddenly new exploration companies are down in the Louisiana Salt Basin area. The higher price of oil makes the lower success rate more profitable.

"You see, when more players are in the field drilling, it helps to eliminate where oil is not, and tells you where it may be. Lot of people do one or two holes where there should be oil. Sometimes, if they come up dry, they give up. You go in there and drill a third or fourth hole, because you know it's there - and bingo, you hit paydirt. So the other guys have in essence done the work already.

"By going in and completing more holes you know your chances of hitting oil have improved without spending a dime."

The other players at KFG add the other essential ingredients to the brew that Kadane predicts will see success in 2008. President of Operations Stephen Guido owns a drilling rig good to below 10,000 feet. Geologist Dave Easom has 25 years experience in the area and has worked closely with seismologist Pitman Calhoun, who is said to be one of the best lower Tuscaloosa and Wilcox seismologists in that whole part of the country. Kadane says that Calhoun and Easom have completed three 3D seismology shoots in the Lower Tuscaloosa Formation in the region, all of them successful.

"I've got a network of guys who know what they're doing," he emphasizes. "They've been there and done that here since they were kids. They know every player on the scene and every dip in every field in the state of Louisiana."

Coming Up: In the next piece, I'll talk about how KFG Resources plans to use 3D seismic data with subsurface well log data to create a drilling plan to hit both the Wilcox Formation and the Lower Tuscaloosa - simultaneously.

This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.

About the Author

Resourcex Investor is an internationally distributed newsletter about emerging junior resource companies. Sign up for a free 1-month trial to our newsletter and get instant access to news and investing tips that have helped many of our readers make more money. http://www.resourcex.com

Mexico’s Oil Output

Oil was not discovered in Mexico until after the turn of the twentieth century. Commercial production of crude oil started in 1901 and by 1911 Mexico began to export oil.

In 1923 Bucarelli Agreements committed the United States and Mexico to regard titles held by foreign oil companies as concessions by the Mexican government rather than as outright ownership claims. And in 1925 President Plutarco Elías Calles decreed that foreign oil companies must register their titles in Mexico and limited their concessions.

Largely as a result of increased international demand generated by World War I, Mexico's oil production peaked in 1921 at 193 million barrels (25 percent of world production). Mexico was second only to the United States in petroleum output and led the world in oil exports during much of the 1920s.

Giving the Mexican government a monopoly in the exploration, production, refining, and distribution of oil and natural gas, and in the manufacture and sale of basic petrochemicals, President Lázaro Cárdenas nationalized the petroleum industry in 1938. This left the oil companies uncomfortable. The United States government soon pressured the oil companies to come to terms with Mexico as a result of President Franklin D. Roosevelt's Good Neighbor Policy. In 1943 Mexico and the oil companies reached a final settlement under which the companies received US$24 million (a fraction of the book value) as compensation.

Mexico's oil output expanded at an average annual rate of 6 percent between 1938 and 1971. And production increased from 44 million barrels in 1938 to 78 million barrels in 1951 alone. Domestic demand progressively exceeded output, and in 1957 Mexico became a net importer of petroleum products. Production then rose to 177 million barrels by 1971 with the exploitation of new oil fields.

Extensive oil discoveries in the 1970s increased Mexico's domestic output and export revenues. Almost every drilling operation conducted after 1972 struck oil. In 1973 oil production surpassed the peak of 190 million barrels achieved in the early 1920s.

However, by early 1993, both crude oil production and exports had begun to decline. Down from almost 80 percent in 1982, in 1995 the oil sector generated slightly more than 10 percent of Mexico's export income. In 1995 Mexico was the world's sixth-largest producer of crude oil. In the Western Hemisphere, only the United States produced more oil than Mexico. Directly behind Mexico was Venezuela.

The Mexican government invested heavily to increase the capacity of existing refineries and construct new ones so that, by the early 1990s, some 40 percent of Mexico's crude petroleum output was refined domestically. In 1993 Mexico had the world's eighth largest crude petroleum reserves, amounting to some 5 percent of the world's total. Mexico's reserves are sufficient to guarantee the current production levels for fifty years.

Since the nationalization of the oil industry in 1938, the state-owned Pemex has monopolized the production and marketing of hydrocarbons. In August 1993, it became known that the government was considering proposals to allow private companies to buy, sell, and distribute imported gasoline, natural gas, and petrochemicals, and to invest in new pipelines.

In early 1996, the government unveiled its Program for the Development and Restructuring of the Energy Sector. The plan is intended to increase Mexico's petroleum exports, improve its competitiveness in the international energy market, and contribute to more balanced regional development, which it has.

Companies in the United States’ oil sector, like {a href=“http://tdecorp.blogspot.com/2007/12/Mexico’s-oil- output.html"}Triple Diamond Energy Corporation continue to look at Mexico’s oil output and assess any potential business dealings.

About the Author

Chris Jent is the Chief Marketing Officer of Triple Diamond Energy Corp. Triple Diamond Energy specializes in acquiring the highest quality prime oil and gas properties. For more information, visit http://www.triplediamondenergycorp.blogspot.com.

Russian Arctic Claims

Russia continues to be the country possessing the largest proven natural gas reserves on the planet as well as the largest exporter of oil after Saudi Arabia. The mismanagement of their resources combined with limited technology has rendered may of their vast resources unsalvageable with their continued denial of foreign intervention further limiting successful extraction efforts. Current projected estimates show that Russia's large reserves, with no expansion or increased operations are dwindling, and will be nearly tapped by 2030. Instead of asking for assistance from highly experienced and specialized foreign oil outfits, Russia has instead opted for increasing their range by laying claim to a disputed 460,800 square mile swath of ice-covered Arctic seabed estimated to hold billions of unproven hydrocarbon reserves.

In 2001, Russia issued documents before the United Nations claiming that the Lomonosov Ridge, making up a large portion of the Arctic Ocean's seafloor, was actually an extension of the Siberian continental shelf and should be recognized as part of Russia, theirs to explore and exploit. The 1982 International Convention on the Law of the Sea established a zone of twelve miles off of all coastal countries and an even further reaching 200 mile economic zone for each country to have exclusive rights for drilling and exploration. Russia's claim to the Lomonosov Ridge extends far beyond this 200 mile economic zone however, and the United Nations has thus far denied their claims.

Russia continues their exploration of the Arctic in hopes to show the United Nations that they deserve to explore and begin drilling, for the rewards could be immense. In order to extend their 200 mile economic zone, Russia must prove the structure of the continental shelf of the ridge is similar to the geological structure of the underwater landmass extension within their territory. The lure of the ridge has to be its estimated 10 billion tons of untapped reserves. These reserves would provide Russia with the boom necessary to continue to flex its might as one of the world's most powerful natural resource holders. Not only would the petroleum and natural gas extracted help provide the energy needs of their citizenry, but the monies collected from exports would be tremendous as worldwide supplies continue to diminish and the price of oil continues to increase.

The United States and Canada are watching ever so closely, hoping Russia's claims are denied once again. Perhaps the United Nations will equally divide the Arctic giving drilling rights to all bordering countries. Until then, large natural gas and oil companies like Triple Diamond Energy Corp. will continue to develop new techniques for drilling deep beneath snow and ice in order to extract the bounty beneath.

About the Author

About the Author: Robert Jent is the president of Triple Diamond Energy Corp. Triple Diamond Energy specializes in acquiring the highest quality prime oil and gas properties. For more information, visit http://www.triplediamondenergycorp.blogspot.com.

Oil & Gas Industry

The Oil and Gas Industry is one of the most important and dramatically changing global industries there is.

Obtained naturally from beneath the surface of the earth, crude oil or petroleum is an inflammable liquid that is collected beneath the seas in the form of oil reservoirs through years of plant and animal decomposition as well as deposition of layers of silt and mud materials. From time immemorial, crude oil has been put to several uses and today, Oil accounts for a major portion of the world's energy consumption.

History If we were to trace the history of oil and gas, we would have to look way back to historical references of oil usage in Persia, Egypt and Mesopotamia. During the 8th century, tar (which is derived from petroleum) was being used for paving roads. By the 9th and 10th century, the discovery and exploration of oil reserves became eminent. Drilling below the sea beds for crude oil paved the path for the entrance and the rise in importance of the oil and gas industry in the overall world economy. The discovery and use of oil & gas by the 20th century led to an increase in the demand for commodities such as petroleum, now heavily traded among nations. In the UK, it is the Department of Trade and Industry that regulates the activities and development of the oil and gas industry.

Majors Players A number of entities together constitute the oil and gas industry.

1) Those involved in the exploration, overall development and production of natural gas or crude oil.

2) Those taking care of the transportation, retailing, and end users.

3) Other contracted drilling agencies and service companies. Some of the major Oil Companies operating in the world market today include BP, Shell, Chevron, ExxonMobil (Esso), ConocoPhillips, and Total S.A.

Oil Usage Developed countries use the maximum amount of oil and there is a growing demand for oil and natural gas by most developing countries as well. Though it is difficult to give an exact estimate, it has been stated that the world consumes over 30 billion barrels of oil per year. Oil Production Some of the biggest producers of oil in the world include

Russia Saudi Arabia USA Iran China

There has been a continuous rise in demand for oil and gas throughout the world leading to a rise in its prices. This was inevitable since petroleum is a non renewable resource and it is hard to match supplies with such a drastic increase in its demand year after year. Moreover, there are signs of negative effects on sea life as well as the overall environment through discharge of chemicals.

What Lies Ahead? Industry experts predict that in the future, such increasing demands on the supply reserves of oil will eventually lead to a decline in the overall global oil production as well as sky rocketing oil prices.

It is high time that the nation looks towards alternative sources of energy such as wave and tidal power, wind power, solar power and bio fuels to reduce such frightening pressures on oil and gas in the world.

About the Author

David Pritchard is webmaster for www.crest-enviro.com