Oil Industry Structure

Unit I

Grammar Revision ing-forms

Text Oil Industry Structure

Ex. 1

Read and translate the international words, try to give more than one variant of translation, where possible:

E.g.: combination – комбинация, сочетание

Active

Alternative

Category

Characterize

Collection

Combination

Complex (adj.)

Constitution

Contaminant

Conversion

Conveyer

Discrete

Focus (v.)

Generate

Industry

Injection

Installation

Integrate

Manufacture

Operation

Orient (v)

Potential

Production

Salt

Segment

Transform

Unique

Parity

Ex. 2

Match the Russian words from A with the English words from B

A	B
вариант введение возможный действующий добыча изготовлять набор объединять передавать превращение преобразовывать промышленность технологический процесс раздельный раздел сложный создание сосредотачивать составлять состав сочетание установка	active alternative collection combination complex composition constitute conversion convey discrete focus generation industry injection installation integrate manufacture operation potential production segment transform

Ex.3

Translate the following collocations into Russian:

Industry segment, chemical composition, engineering specialty, interpretation of seismic information, combine geophysical information, geologic theory, production engineer, method of production, professional discipline, prospect generation, complex function, marketing specialist, service station, ocean-going barge, unique characteristics, hydrocarbon molecules, to focus attention, production operations, integrated company, paradox of interests

Ex. 4

Some international words are not always easy to translate from English into Russian, as in our language they have a different meaning, e.g. off-shore platform - морская платформа, а не оффшорная платформа. Such words are called “translator’s false friends” – ложные друзья переводчика.

Match A & B and try to give Russian words with international roots in C:

A	B	C
E.g. value   mixture to refinе to extract familiar to prospect provision	значение, ценность   извлекать, добывать знакомый обеспечение разведывать очищать, перерабатывать смесь	валюта

Ex. 5

Translate these sentences into Russian:

1. This tobacco is a mixture of three different sorts.

2. Refined oil is good for cooking, while unrefined oil is good for salads.

3. He extracted a promise from me that I’d come to the party.

4. Your face is familiar to me.

5. Geologists prospect for oil and gas.

6. In countries without adequate welfare (социальный) provisions for the poor, unemployment may be very much more severe in its effects.

Words to Text 1

gasoline n. petrol n.	амер. бензин; газолин брит. Бензин
heating oil	топливо коммунально-бытового назначения
lubricating oil	смазочное масло
fuel oil	топочный мазут
do smb. good   ant. do smb. harm	приносить к-л пользу, быть полезным Ex. Milk does you good. наносить вред, вредить, быть вредным Ex. Smoking does you harm.
stuff n.	1) вещество, материал Ex. What stuff is it made of? 2) вещь, штука Ex. What is this stuff?
contaminant n.     contaminate v.	загрязняющее вещество, загрязнитель, контаминант загрязнять, заражать Ex. We don’t fish in this river, it’s contaminated.
value n.     ~ v.	1) ценность, стоимость, рыночная цена товара, финансового инструмента, актива, услуги, права Ex. Because of continual price increases the value of the pound has fallen in recent years. I bought this picture for £10, but its real value must be about £500. 2) оценивать Ex. The house and its contents were valued at $25, 000.
convey v. to ~ goods (passengers, luggage)     conveyance n.	перевозить, транспортировать, доставлять перевозить товары (пассажиров, багаж) Ex. Electricity is conveyed to our homes from power stations. перевозка, транспортировка
feasible a.   feasibility study	осуществимый, выполнимый Ex. Your plan sounds quite feasible. технико-экономическое обоснование (ТЭО) Ex. The company is conducting a feasibility study for the Iran-India gas pipeline.
sulfur n (Am) sulphur (Brit)	сера
fluid n. ~a.	жидкость, текучая среда, флюид Ex. Oil and gas are fluids. жидкий, текучий; подвижный, изменчивый Ex. As markets become more fluid and global, leaders must be more careful with investors.
process v.     processing of oil and gas n.	обрабатывать, подвергать обработке Ex. One has to process a photographic film to print pictures from it. обработка нефти и газа(главным образом химическая или термическая) Ex. Although early processing procedures were able to remove water, in the nineteenth century discoveries were only developed if consumers could use the gas just as it came out of the ground.
extract v.	извлекать, добывать Ex. Norway extracts oil from the North Sea.
produce v.   production n. ~ of coal, of ore, of oil, of gas	зд. добывать Ex. Gas can be produced from coal. добыча добыча угля, руды, нефти, газа Ex. Production of oil has increased in the recent years.
refine v.   refining n.     refinery n.	перерабатывать, очищать, рафинировать to ~ oil 1) перерабатывать, очищать нефть 2) рафинировать масло Ex. Oil must be refined before it can be used. очистка, перегонка, переработка petroleum ~ переработка нефти Petroleum refining is a complex process. нефтеперерабатывающий завод (НПЗ)
upstream n.	«до трубы» - первичные отрасли нефтегазового хозяйства. Совокупность производственных операций, связанных с разведкой и добычей нефти и газа Ex. The location and extraction of petroleum constitute the upstream end of the oil industry.
downstream n.	n. «после трубы» - вторичные отрасли нефтегазового хозяйства. Совокупность производственных операций, связанных с использованием добытых нефти и газа: транспортировка, переработка, хранение и сбыт. Ex. The processing of crude into various refined products, together with the marketing of these products, is known as the downstream end.
raw material   syn. feedstock	сырье Ex. Crude oil is the basic raw material for gasoline. Ex. Coal was the feedstock for all kinds of chemicals until it was replaced by oil.
involve v.     be involved in smth	1) включать, содержать Ex. 2) подразумевать, предполагать Ex. Taking the job involves living abroad. быть вовлеченным, участвовать в ч-л. Ex. China is currently involved in multiple international oil and gas projects.
contractor n.	подрядчик, компания-подрядчик. Предприниматель или фирма, выполняющие определенные виды работ (сейсмическая разведка, бурение скважин, прокладка трубопровода и т.п.) на условиях подряда. Ex. According to recent contracts, contractors receive 10% of the oil value for crude oil supplied by them.
crucial a.	1) решающий, ключевой ~ problem – ключевая проблема to play a ~ role – играть решающую роль Ex. Speed is crucial to the success of the reform. 2) критический, переломный Ex. Help arrived at a crucial moment.
tend v.	иметь тенденцию; стремиться Ex. Oil prices are tending upwards. ~ to smth., to do smth. Ex. When prices of oil rise significantly people tend to buy less.
blend v.	1) смешивать; изготовлять смесь Ex. a story that blends fact and legend Blend the sugar, eggs, and flour. 2) смешиваться; сливаться Ex. Oil and water will never blend.
oil-bearing a.	нефтеносный ~ layer - нефтеносный пласт ~ formation – нефтеносный горизонт Ex. Geophysical data helps identify potential oil-bearing areas.
operation n.   operator n.	1) операция, действие, рабочий/технологический процесс; Ex. When preparing the project we consulted experts in downstream operations. 2) разработка, эксплуатация The oilfield operation started a year ago. оператор, сервисная компания, подрядчик Ex. Transnefteproduct is an operator of oil products pipelines in Russia.
development n. oil field ~   E&D (exploration and development)	разработка месторождения разработка нефтяного месторождения Ex. Petroleum exploration, development and production require significant investment. exploration and development работы по разведке и разработке месторождения
take over v. to ~ the office (of mayor) to ~ a business   takeover n.	принимать должность (и т.п.) от другого принять должность (пост) мэра принять на себя руководство делом (предприятием) приобретение контрольного пакета акций (к-л компанией другой компании) Ex. His only reason for investing in the company was to take it over.
enhance v. to ~ production enhancement n. ~ of oil recovery	усиливать, увеличивать, повышать увеличивать добычу повышение, увеличение повышение нефтеотдачи
consume v. to ~ fuel     consumer n.     consumption n.	потреблять, расходовать расходовать горючее Ex. An economy consumes more energy when it is active. потребитель: лицо, которое в конечном итоге пользуется данным товаром или услугой (это не всегда покупатель). Ex. Price determines whether consumers consume. потребление Ex. The nation’s consumption of oil and gas increased last year.
compete   competitor     competition n.	v.конкурировать to ~ against smb. – конкурировать с к-л. n. конкурент, соперник по бизнесу Ex. Natural gas is oil’s main competitor on the fuel market. конкуренция: столкновение спроса и предложения. Ex. Japanese TV-set manufacturers are under price competition from Korean and other makers.
supply n. to bring up / provide supplies fresh supplies power supply supplies to be in short supply to lay in supplies to replenish supplies to store supplies abundant/liberal/plentiful supplies     ~ v.	1) снабжение, поставка обеспечить снабжение, поставки новые поступления, новые поставки электроснабжение, энергоснабжение 2) ресурсы, припасы, запас; быть в дефиците делать запасы пополнять запасы делать запасы богатые запасы Ex. The nation's fuel supplies will not last forever. снабжать (чем-л.), поставлять; доставлять Ex. The company supplies fish to local shops and restaurants.
facility n.   storage ~	объект, сооружение, установка   хранилище. Наземное или подземное сооружение для хранения товарных или стратегических запасов минерального сырья и топлива. Ex. As production of hydrocarbons increases, there is need for more storage facilities.
disparity (between, in, of) n.	несоответствие, несовпадение, неравенство (отсутствие паритета) Ex. There is a great disparity between the amount of work that I do and what I get paid for it.
independent company integrated company	независимая компания интегрированная компания
benefit n.     ~t smb v..	прибыль, выгода Ex. We will focus our marketing message on the environmental benefits of our product. приносить прибыль, выгоду
barrel n.   B/D [barrels per day] bbl [barrels]	баррель (мера вместимости: для нефти = 159 л.) баррелей в день баррели

Text A

Read the text and name the main oil industry functions.

Oil Industry Structure

Part I

1. Oil industry really is a collection of industries, each characterized by a unique profession.

What consumers know as gasoline, heating oil, lubricating oil, diesel, and other petroleum products start out as crude oil. In its natural state, crude oil has little value. For one thing, in its natural state, it usually is underground, where it can do no one any good. For another, its underground location begins as an unknown. Oil underground has no value, therefore, until someone first finds it and then conveys it to the Earth's surface, or at least proves that the conveyance is economically and technically feasible. Even then, however, the crude has value only in its potential to be converted into useful fuels. Usually, crude as it comes out of the ground is dark, gooey[1] stuff, mixed with mud and salt water and containing metals and perhaps sulfur and other chemicals. It might be black, green, brown, sometimes orange, or occasionally nearly clear. The really good stuff is nearly clear and very fluid, free of sulfur and other contaminants, approaching gasoline in chemical composition. The really bad stuff is so thick that it must be heated in order to flow, high in sulfur and metal content. To be worth anything, crude of any quality must be chemically transformed. The deliberate chemical change falls under a broad industry category called processing.

2. Crude oil, then, must be found, extracted, and processed. And between these steps it must be transported from place to place. The oil industry segment that searches for oil is called exploration. Extraction is called production. Processing is called refining. And transporting is called, well, transportation. These functions often are categorized as "upstream" or "downstream." The upstream business, including exploration and production, provides the oil industry's raw material. The downstream business is the manufacturing part of the industry; it takes the raw material, crude oil, and turns it into valuable products through the process of refining.

Professional disciplines differ widely among these various functions, which is why the industry seems so much like a collection of businesses to people familiar with it. Exploration, for example, employs the sciences of geophysics and geology. Production involves sophisticated engineering oriented to the behavior of underground rock. In both upstream businesses, the crucial field activity is drilling, which is a professional and engineering specialty.

3. Until the mid-1980s, the upstream industry segments tended to function discretely. A geophysicist produced a seismic section and interpreted it to produce a map of the underground. A geologist combined the geophysical information with field observations and information from any wells drilled in the study area to generate a "prospect" — a location to be drilled. Then a drilling crew, nowadays employees of a contractor and not the prospect-generating company, moved onto the location to drill a hole several thousand feet, or several tens of thousands of feet, into the ground to test the geologic theory. If the hole, or well, found oil in sufficient quantity, the production engineers took over to decide how best to get it out. The engineers' work led to field development, which normally included the drilling of more wells, installation of equipment to handle produced fluids, and perhaps a program of water injection or other method of enhancing production.

4. All these physical steps still must be performed. Since the mid-1980s, however, extremely powerful computers have made it possible for oil companies to blend information from each of the professional disciplines. Now, geophysicists work more closely with geologists than before in prospect generation, and petroleum engineers may enter the picture so that a prospective development pro­gram becomes available before the first well has been started. The effect has been a blending of once-distinct functions, although the sequence of upstream steps has not changed much.

5. The downstream petroleum industry employs a different set of professionals, mainly chemists and engineers. Refining is a complex function that takes the generally big molecules, constituting crude oil, and turns them into little, more useful molecules that can be mixed to make gasoline and other products. In general, chemists figure out what needs to be done, and refining engineers figure out how to do it. Related to their activities are those of marketing specialists who think of ways to make consumers buy their products rather than those of competitors.

6. Connecting oil fields with refineries and refineries with service stations and home heating oil distributors is the transportation network. It includes tank trucks, ocean-going tankers, barges, pipelines, and storage facilities. Transportation, too, makes up a business. In fact, trucking, pipelining, and shipping are all very distinct businesses, each with its own professional specialty.

Part II

7. This, in very simple terms, is the mechanical part of the oil market, the industry that produces what economists call supply. We will examine the parts in greater detail later. What is important at this point is to recognize the unique characteristics of the petroleum supply functions and the people who perform them. Indeed, as hydrocarbon molecules pass from function to function, their ownership often changes. The number of ownership changes varies widely.

8. These disparities of function and ownership have important economic implications[2]. They relate to the organization of companies, patterns of trade, and market behavior.

Some companies, for example, organize around particular functions. Thus there are independent producers, which specialize in upstream work. Their concentrations may be even narrower; some independents focus on exploration, while some prefer to conduct only development and production operations. And there are independent refiners, which concentrate on processing and marketing.

9. Other companies organize around the concept of integration — ownership of both upstream and downstream operations. An integrated company thus finds and produces crude oil, refines it, and markets the products.

Integration introduces an interesting paradox of interests, the understanding of which is crucial to an understanding of petroleum economics. High crude-oil prices benefit producers for obvious reasons: The producer of 20 B/D of crude makes more money when crude sells for $22/bbl than when the price falls to $15. To refiners, the crude-oil price is a feedstock cost. All else being equal — especially product prices — a refiner makes more money from $15/bbl crude than from its dearer alternative.

10. An integrated company looks at crude prices from both perspectives. At least in theory, it both sells crude (from its upstream divisions) and buys it (in its downstream units), even when the transactions occur internally. The advantages of integration have been the subjects of lively economic debate since John D. Rockefeller controlled the market. Whatever its other merits and drawbacks, integration brings into focus the vital dual nature of crude oil prices as both key determinant of producer revenues and principal cost for refiners.

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