Fisher Investments believes the easiest way to think about the Energy sector is by breaking it into its two main industries: Oil, Gas & Consumable Fuels and Energy Equipment & Services. The former is what most people think of as Energy -- the Exxons, Chevrons, and other megasize firms that explore for and produce oil and natural gas. The Equipment & Services industry assists the Oil & Gas industry with this process. Fisher Investments will start with the Oil & Gas industry and its main function—the integrated process.
The Integrated Process
In Fisher Investments' view, companies engaging in the exploration, production, delivery, refining, and marketing of petroleum products to consumers are all part of the integrated process. Its three main segments are upstream, midstream, and downstream:
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Upstream: exploration -- searching for hydrocarbons like oil and natural gas; and production -- actually taking the resources out of the ground and selling them. Companies like Devon Energy, Anadarko Petroleum, and Apache search the globe for oil and gas reserves.
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Midstream: processing, storage, and transportation of hydrocarbons. This includes transporting raw energy materials around the globe via ships, pipes, and other methods. Companies like TransCanada, Williams Companies, and Enbridge own large networks of pipelines that ship a variety of petroleum products.
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Downstream: refining oil and natural gas into usable petroleum products for sale to consumers. Companies like Valero Energy, Sunoco, and Tesoro refine crude oil into gasoline and jet fuel.
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