Prehistory ,
Slovakia. Petroleum is a naturally occurring liquid found in rock formations. It consists of a complex mixture of hydrocarbons of various molecular weights, plus other organic compounds. It is generally accepted that oil is formed mostly from the carbon rich remains of ancient plankton after exposure to heat and pressure in
Earth's crust over hundreds of millions of years. Over time, the decayed residue was covered by layers of mud and silt, sinking further down into
Earth's crust and preserved there between hot and pressured layers, gradually transforming into
oil reservoirs.
Early history Petroleum in an unrefined state has been utilized by humans for over 5000 years. Oil in general has been used since early
human history to keep fires ablaze and in
warfare. Its importance to the
world economy however, evolved slowly, with
whale oil being used for lighting in the 19th century and wood and coal used for heating and cooking well into the 20th century. Even though the
Industrial Revolution generated an increasing need for energy, this was initially met mainly by coal, and from other sources including whale oil. However, when it was discovered that
kerosene could be extracted from
crude oil and used as a lighting and heating fuel, the demand for petroleum increased greatly, and by the early twentieth century had become the most valuable commodity traded on world markets.
Modern history oil wells , energy company profits increased with greater revenues from higher fuel prices resulting from the
Russian invasion of Ukraine, falling debt levels,
tax write-downs of projects shut down in Russia, and backing off from earlier plans to reduce
greenhouse gas emissions.
Imperial Russia produced 3,500 tons of oil in 1825 and doubled its output by mid-century. After oil drilling began in the region of present-day
Azerbaijan in 1846, in
Baku, the
Russian Empire built two large pipelines: the 833 km long pipeline to transport oil from the
Caspian to the
Black Sea port of
Batum (Baku-Batum pipeline), completed in 1906, and the 162 km long pipeline to carry oil from
Chechnya to the Caspian. The first drilled oil wells in Baku were built in 1871–1872 by
Ivan Mirzoev, an
Armenian businessman who is referred to as one of the 'founding fathers' of Baku's oil industry. At the turn of the 20th century, Imperial Russia's output of oil, almost entirely from the
Apsheron Peninsula, accounted for half of the world's production and dominated international markets. Nearly 200 small refineries operated in the suburbs of Baku by 1884. As a side effect of these early developments, the Apsheron Peninsula emerged as the world's "oldest legacy of oil pollution and environmental negligence". In 1846 Baku (Bibi-Heybat settlement) featured the first ever well drilled with percussion tools to a depth of 21 meters for oil exploration. In 1878
Ludvig Nobel and his
Branobel company "revolutionized oil transport" by commissioning the first
oil tanker and launching it on the
Caspian Sea. Galician refineries were initially small, as demand for refined fuel was limited. The refined products were used in artificial asphalt, machine oil and lubricants, in addition to Łukasiewicz's
kerosene lamp. As kerosene lamps gained popularity, the refining industry grew in the area. The
first commercial oil-well in Canada became operational in 1858 at
Oil Springs, Ontario (then
Canada West). Businessman
James Miller Williams dug several wells between 1855 and 1858 before discovering a rich reserve of oil four metres below ground. Williams extracted 1.5 million litres of crude oil by 1860, refining much of it into kerosene-lamp oil. For a week the oil gushed unchecked at levels reported as high as 3,000 barrels per day. The first modern oil-drilling in the United States began in West Virginia and Pennsylvania in the 1850s.
Edwin Drake's 1859 well near
Titusville, Pennsylvania, typically considered the first true modern
oil well, touched off a major boom. In the first quarter of the 20th century, the United States overtook Russia as the world's largest oil producer. By the 1920s, oil fields had been established in many countries including Canada, Poland, Sweden, Ukraine, the United States, Peru and Venezuela. A number of new tanker designs developed in the 1880s. In the early 1930s
the Texas Company developed the first mobile steel barges for drilling in the brackish coastal areas of the
Gulf of Mexico. In 1937
Pure Oil Company (now part of
Chevron Corporation) and its partner
Superior Oil Company (now part of
ExxonMobil Corporation) used a fixed platform to develop a field in of water, one mile (1.6 km) offshore of
Calcasieu Parish, Louisiana. In early 1947 Superior Oil erected a drilling/production
oil-platform in of water some 18 miles off
Vermilion Parish, Louisiana.
Kerr-McGee Oil Industries, as operator for partners
Phillips Petroleum (
ConocoPhillips) and
Stanolind Oil & Gas (
BP), completed its historic Ship Shoal Block 32 well in November 1947, months before Superior actually drilled a discovery from their Vermilion platform farther offshore. In any case, that made Kerr-McGee's Gulf of Mexico well, Kermac No. 16, the first oil discovery drilled out of sight of land. Forty-four Gulf of Mexico exploratory wells discovered 11 oil and natural gas fields by the end of 1949. During
World War II (1939–1945)
control of oil supply from Romania, Baku, the Middle East and the
Dutch East Indies played a huge role in the events of the war and the ultimate victory of the
Allies. The
Anglo-Soviet invasion of Iran (1941) secured Allied control of oil-production in the Middle East. The expansion of
Imperial Japan to the south aimed largely at accessing the oil-fields of the Dutch East Indies. Germany, cut off from sea-borne oil supplies by
Allied blockade, failed in
Operation Edelweiss to secure the
Caucasus oil-fields for the
Axis military in 1942, while Romania deprived the
Wehrmacht of access to
Ploesti oilfields – the largest in Europe – from August 1944. Cutting off the East Indies oil-supply (especially via
submarine campaigns) considerably weakened
Japan in the latter part of the war. After World War II ended in 1945, the countries of the
Middle East took the lead in oil production from the United States. Important developments since World War II include deep-water drilling, the introduction of the
drillship, and the growth of a global shipping network for petroleum – relying upon oil tankers and pipelines. In 1949 the first offshore oil-drilling at Oil Rocks (Neft Dashlari) in the Caspian Sea off Azerbaijan eventually resulted in a city built on pylons. In the 1960s and 1970s, multi-governmental organizations of oil–producing nations –
OPEC and
OAPEC – played a major role in setting petroleum prices and policy.
Oil spills and their cleanup have become an issue of increasing political, environmental, and economic importance. New fields of hydrocarbon production developed in places such as Siberia,
Sakhalin,
Venezuela and North and West Africa. With the advent of hydraulic fracturing and other
horizontal drilling techniques, shale play has seen an enormous uptick in production. Areas of shale such as the
Permian Basin and
Eagle-Ford have become huge hotbeds of production for the largest oil corporations in the United States. ==Structure==