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Mining and oil and gas industries are currently one of the major industries in the world. They are the world’s primary fuel sources. They have a significant impact on the global economy and also in terms of the amount of employment they generate. These industries are also referred to as the world’s powerhouse industry. They are a boon for developing host countries. There are significant differences and similarities between the two industries. Let us delve into the details of mining vs oil and gas industry.
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Mining Industry
Mining is the process of extracting minerals from a seam, vein, reef, lode, or other deposit in the earth. The mining industry involves the discovery and extraction of naturally occurring minerals from the earth. Coal, metals, oil shale, rock salt, potash, gemstones, limestone, clay, chalk, stone, and gravel are all extracted in mining.
The mining industry accounts for prospecting, planning and permitting the mine, extraction of raw minerals using various mining techniques, processing and mineral dressing. It also has to ensure the restoration or reclamation of the mine at the end of its economic life cycle.
Mining is necessary to provide fuel for energy, building materials, and minerals for modern electronics and other consumer products. The mined materials are used to construct roads and hospitals, build automobiles and houses, make computers and satellites, generate electricity, and provide several other goods and services that consumers enjoy.
Although mining is still a major environmental concern, the mining industry has become more efficient by developing technology that allows miners to extract maximum ore at deeper depths in underground mines.
Oil and Gas Industry
1: What is the primary purpose of a refinery in the oil and gas industry?
Oil and natural gas industry is one of the largest industries in the energy market. It plays an influential role in the global economy as the world’s primary fuel sources. The industry generated an estimated $5 trillion in global revenue as of 2022. The oil and gas industry provides job opportunities to hundreds of thousands of workers worldwide.
The industry is responsible for discovering a resource, transporting it to a refinery, and turning it into a finished product ready for sale. The processes and systems involved in producing and distributing oil and gas are highly complex, capital-intensive, and require state-of-the-art technology. The oil and gas industry is broken down into three segments:
- Upstream (Exploration and Production (E&P)): These companies find reservoirs and drill oil and gas wells. They search for underwater and underground natural gas fields or crude oil fields and the drill the exploration wells as well as established wells to recover oil and gas.
- Midstream: These companies transport materials obtained from the wells to refineries. Once resources are recovered, it has to be transported to a refinery, which is often in a completely different geographic region. Transportation is usually done by tanker ships, pipelines and trucking fleets.
- Downstream: These companies are responsible for refining and the sale of the finished products. They have to refine the crude oil and purify natural gas. The marketing and commercial distribution of these products to consumers are in the form of natural gas, diesel oil, petrol, gasoline, lubricants, kerosene, jet fuel, asphalt, heating oil, LPG (liquefied petroleum gas) as well as a number of other types of petrochemicals.
As of 2022, the United States is the world’s largest net producer of crude oil. It is followed by Saudi Arabia, Russia, Canada, and China. The top five countries in natural gas production are Russia, the United States, the E.U., Canada, and Iran.
How to Get a Job in Mining and Oil and Gas Industry?
Extraction workers and engineers make up the backbone of this industry. Both these positions require a significant amount of experience and training to be successful. So companies are always vying for the best talent. They try to bring the top candidates on board by offering comprehensive oil, gas, and mining benefits plans.
In both these fields, you can work in the extraction industry, research and development, legal advising, education, manufacturing and machinery design, or managerial positions. Some of the roles include mine manager, drill planner and designer, technical service manager, production engineer, government inspector, petroleum attorney, investment analyst, chief executive.
There are various positions in both the industries and the requirement varies according to the job profile. Engineers will require a Bachelor’s degree in petroleum engineering or a related field while a Master’s degree can be beneficial for career advancement. For other positions like pump operator, rig managers etc, a high school diploma or secondary education is sufficient. Entry-level positions may not require any experience, but senior-level positions may require several years of experience.
You can improve your chances of landing a job in these industries by doing a certification course. This makes you more competitive for jobs by building your skills and thus impressing potential employers. The salary for a field engineer in India after the oil and gas course completion ranges between ₹ 1.4 Lakhs to ₹ 6.0 Lakhs.
Most of the employment in this industry is full-time and permanent positions. Employers in the mining, oil, and gas industry provide all-inclusive employee benefits packages. This is a male-dominated industry, with only 13% of employees identifying as female, and the average employee age is 43 years old.
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Differences Between Mining Industry and Oil and Gas Industry
- Mining industry deals with mineral resources and are responsible for planning and supervising the construction of mines. Oil and gas industry deals with evaluation of crude oil and gas reservoirs and finding appropriate ways of executing drilling operations.
- Mining establishments are primarily involved in exploring, extracting and developing properties of naturally occurring solid minerals, such as coal and ores. Oil and gas extraction involves removing liquids (crude petroleum) and gases (natural gas) from underground.
- In oil and gas industry, the search for oil is done in large sedimentary basics deep underground and related coasts. In mining, systematic drilling, surveying and surface sampling is done over a relatively smaller area.
- The scale of rents is often much higher in oil than in mining.
- The petroleum sector often uses a production-sharing contract. This does not exist in the mining sector.
Similarities Between Mining Industry and Oil and Gas Industry
- Exploration risk: Even though exploration can be financially rewarding, both the industries face exploration risk. Exploration refers to the research and discovery of potential drilling and extraction sites. There is a high probability that a single venture will be a failure.
- Long investment lead times: A lead time is the latency between the initiation and completion of a process. The discovery of mineral and oil and gas resources to the final production takes a long time.
- The key parameters by which both mining and petroleum companies make investment decisions are large up-front capital outlays and a wide range of technical, commercial and political project risks.
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Frequently Asked Questions
What is mining industry?
The mining industry involves the discovery and extraction of naturally occurring minerals from the earth. Some of the usually mined substances are coal, metals, oil shale, rock salt, potash, gemstones, limestone, clay, chalk, stone, gravel etc.
What is oil and gas industry?
The industry is responsible for discovering an oil or gas resource, transporting it to a refinery, and turning it into a finished product ready for sale.
