Petroleum is a mixture of hydrocarbons formed from the decomposition of dead animals and plants under the condition of heat and pressure. Petroleum is usually combined together with natural gas embedded in the underground deposits below the surface of the earth’s crust.
Petroleum contains an amount of eleven percent hydrocarbon, eighty percent carbon compounds and two percent of oxygen, nitrogen and Sulphur. Petroleum is extracted from the earth crust by drilling method, after which it is separated into its different products by fractional distillation. Factional distillation is a process whereby the extracted petroleum in heated in a fractionating column at different boiling points to obtain different layers of petroleum products, the natural gas is usually at the topmost layer of the fractionating column and bitumen is at the bottom layer of the fractionating column.
Other names for petroleum are: crude oil, rock oil, mineral oil etc. Saudi Arabia is the world’s largest oil producing country while Nigeria is largest oil producing country in Africa. According to Adams Smith “economics is a social science that studies the human behavior as a relationship between the ends and the scare means which has alternative uses”.
Economics helps in the distribution and allocation of revenues and resources effectively around the world. It also helps in the improvement of the standard of living of the people living in the society. Petroleum economics is a branch of economics that deals with the application of economic techniques in the exploration, marketing and processing of petroleum and its products in an energy industry or in an oil and gas company. The study of petroleum economics helps in guiding an energy industry or an oil and gas company in decision making in order to be financially stable.
A petroleum economist is someone who has the knowledge and specialization of petroleum economic techniques and has been trained to apply them effectively, in an oil and gas or energy industry. Petroleum economists tells the petroleum engineers who explore oil in the refinery, how many barrels of oil to drill out in order to avoid wastage of the petroleum. Also, a petroleum economist instructs the petroleum engineers whether or not to explore oil in a particular area. They also oversee the financial management of the energy industry and oil and gas company. Petroleum economist help in creating ideas on how to improve the quality petroleum and its products to attract more customers to purchase the products and met up with their economics demands. Petroleum economics directs the oil and gas industry to countries or other consumers who have high purchasing power to purchase their petroleum and its by-products.
In relation to work experience by a petroleum economics, different durations or lengths are possible to occur due different factors influencing them such as official school leaving age. For one to be upwardly mobile as a petroleum economist, he or she must undergo internships from their university level to their masters, this gives room for one to encounter several work experiences at various stages in different oil and gas industries and energy industries. After the accomplishment of their master program, they can be employed as a fulltime employee in an oil and gas industry or organization that can be either owned by a private individual or owned by the government.
While working in any of these areas for years one will be equipped with a lot of working experiences which can enable them to own and finance their own private oil and gas companies and even petrol filling stations which helps in generating higher income and higher standard of living.
The size or nature of capital to start. First, we begin by talking about what capital is in Economics. In economics, capital consists of assets that can enhance one’s power to perform economically useful work. For example, polish, brushes, shoe glue are capitals for a cobbler. “Adam Smith defines capital as: that part of man’s stock which he expects to afford him revenue”. Capital goods, real capital or capital assets are already- produced, durable goods or any non-financial asset that is used in production of goods or services.
Capital is distinct from land (it is a non-renewable resource) in that sense, capital can be increased by human labor. At any given moment in time, total physical capital may be referred to as the capital stock (which is not to be confused with the capital stock of a business entity). Capital is an input in the production function, Homes and personal autos are not usually defined as capital but as durable goods because they are not used in a production of saleable goods and services.
In Marxian political economy, capital is money used to buy something only in order to sell it to realize a profit. It could also be defined as all man-made wealth or goods used to produce other goods and services.
Retirement planning is the process of determining retirement income goals and the actions and decisions necessary to achieve those goals. It includes identifying sources of income, estimating expenses, implementing a saving program, and managing assets and risk.
A retirement plan is similar to pension. Pension is 18% of a person’s salary saved in the bank for retirement purposes. It is important that a person starts planning his or her retirement early enough in order to avoid financial breakdown after years of working. Some Nigerian companies help their employees by saving up 10% from their monthly salary. example: FBC trust &securities ltd. While the employee saves 8% of his monthly salary. The goal of the retirement plan is to have what to survive after one has worked till his desired time. There two (2) stages of retirement planning, which are:1. Young adulthood.
As I said earlier retirement plan is not totally the same thing as pension. Pension is a type of retirement plan. Basically, in pension the contributions are funded by and invested by the employer. This type of pension is called “Defined-benefit plans”. The retirement plan for a petroleum economist varies differently, subject to inflow during time of service. This clearly means that a person’s retirement plan is solely determined by his or her services as at the time of work. For those who work in largely recognized companies or enterprises as distinguished individuals in the business tend to have a better retirement plan than that of those who work as low staffs in the company. For example: the managing director of chevron, because he receives higher his retirement is expected to be more than a cleaner in the company.
People are expected to plan properly and extensively for their retirement in order to avoid getting bankrupt after and also for a person to enjoy his or her years of work-free years. I will refer you to three economists (though not petroleum based), They are: Monique Morrissey, Jeffrey Miro and Romina Boccia. These people share their retirement plans and back slides as well to help others not just economist in preparing their retirement plans. (www.money.com).
What we intend to give back to the society. Apart from making profit, one must also be willing to give back at least a certain percent of what he or she gained. Petrol as a whole is the key commodity of most countries especially Nigeria. That is to say that petrol is what helps the country incur a lot of revenue.
Petroleum economist are majorly people who apply the economic tools and methodologies to a business or socio-political decision in the petroleum industry. It is expected that we help to increase the standard of living of the people; by selling more petrol and making more profit to benefit the society at large. Aside that petrol is a derived demand; that is, it is not only regarded for its use alone but also to produce other goods. For example, crayons, bottles, pesticides etc.
The demand for petrol in the market increases annually, thereby, increasing profit for most countries or private companies. The extensive supply chain of petrol in the employs hundreds of people, thereby increasing job opportunities for individuals and also reducing the rate of crime. We could also help to improve the financial structure or economy of the country, by increasing our exports and decreasing our imports or by placing them at equilibrium.
Petroleum economists also help in the oil market by setting oil prices below equilibrium point to increase demand and profit and reduce excess supply. This could also help in the reduction of inflation, reason being that if there is too much oil(petrol) in the market the value of oil in the economy will diminish.
In as much as, petrol is the major source of income to the Nigerian economy. It could also bring huge losses to the economy if not managed properly by the right people. Petroleum economists are responsible for the amount of oil(petrol) that goes in and out of an economy.
As a whole, we will give back to the society a better standard of living by maximizing the profit incurred from exportation of petroleum. And by controlling the prices of petrol in the market, help to provide enough petrol that will be used by factories to produce other goods which are: crayons, ink, tires etc.
A petroleum economist control and manage the inflow and outflow of petroleum in the country, thereby, preventing various economic hazards such as: scarcity, black marketing, hoarding of petroleum etc. Areas of specialization in petroleum economics. Being an economist alone give us the opportunity to work anywhere in the country, for example we could work in: business organizations, petroleum companies like shell, chevron, Schlumberger, mobile, O and O, government agencies etc. Most likely it is expected of people in this field to specialize mostly in the oil and gas sector of the country.
Basically, as the name entails ‘ Petroleum Economist ‘ we are expected to take part in the exportation and importation petroleum. Balancing the price of petroleum in the market to is expected of us. Petroleum on its own, is the major source of inflow to the economy today, but due to a lot of changes it no longer is. There was once a time in Nigerian economy where Nigeria was experiencing economic outburst reason being; the proper management of trading petroleum to other countries. As petroleum economist we are to help both private and public sectors of the country in the selling of petroleum in the market to avoid any hazard that might affect them or the economy at large.
We are basically expected to take part in the petroleum sector of the economy to prevent demand-pull inflation on petrol (higher demand for petrol than supply of petrol) and cost-push inflation on petrol (higher price on petrol than demand for petrol). And to help keep the economy budget as surplus not deficit.
Possible change of job. This will be pending on individual choice. Initially, as economist we are able to work anywhere reason being that it is a social science course. Most people, might decide to change course due to some occupational hazards which might be low salary or health risk. Despite that, people still go into the occupation because it pays a lot.
As an economist we can work in different places but as a petroleum economist which is just a particular field in economics, one is based in an oil industry. While one does their bachelor’s degree in the university, one studies the various aspects of economics but later in the future, he or she is expected to study and specialize in a particular area in the field of economics.
If one wishes to change his or her course along the line, it is possible because of the basic knowledge in all fields of economics one acquired during his or her first degree. As an economist one could be appointed as special advisor to the president, one can also contribute to the budget making of the country to ensure that budget padding is avoided. An economist one can also work in financial institutions or houses (insurance companies, development banks, mortgage bank, stock exchange banks etc.) especially in the central bank and commercial banks as managers and financial analyst.
Furthermore, as an economist one can also decide to own his or her own private business company (small-scale or large scale) or organization by employing both skilled and unskilled laborers to carry out the daily activities in the company in order to gain profit, all these can serve as source of income to the economist. We feel that personally, there will be no need to change our course along the line because it is our career goal and that it what we want to achieve.
References
- (2019, December 26). Retrieved from www.businessdictionary.com: http://www.businessdictionary.com/definition/petroleum.html
- Anyawuocha, I. (2011). Fundamentals of Economics (3rd ed.). Onitsha, Anambra, Nigeria: Africana First Publishers PLC.
- CollegeChoice. (2019, october 21). Retrieved from http://www.collegechoice.net/rankings/best-masters-degree-programs-in-economics/
- George, H. (2017). Proverty and Progress. Madison: Fairleigh Dickinson University press. Retrieved from http://www.henrygeorge.org/pchp2.htm
- Kleinsorge, P. l. (2018, March 14). Retrieved from http://www.britannica.com/topic/capital-economics/the-austian-school.
- Lane, F. a. (1953). Enterprise and secular change ;readings in economic hist. Homewood, IL: R.D .Irwin. Retrieved from http://www.archive.org/details/enterprisesecula0000lane
- Marxists organisation. (n.d.). Retrieved January 13, 2020, from Glossary of terms :Ca: http://www.marxists.org/glossary/terms/c/a.htm#capital
- Philip, A. (2019, october 17). Retrieved from http://fatherprada.com/course/faculty-of-art-and-humanities/waec-subject-for-economics
- Sammuelson, P. N. (2009). Economics(Textbook) (12th ed.). America: McGraw-Hill. Retrieved from http://en.mwikipedia,org/wiki/Economics_(Textbook)
- University of Aberdeen. (n.d.). Retrieved January 13, 2020, from petroleum,energy economics and finance|postgraduate taught degrees| study here| The University of Aberdeen: https://www.abdn.ac.uk/study/postgraduate-taught/degree-programmes/228/petroleum-energy-economics-and finance/#careers
- UNSW Sidney. (2011, August 26). school of minerals and energy resourses engineering. Retrieved from https://www.engineering.unsw.edu.au/minerals-energy-resources/what-we-do/what-do-mining-engineers-do-what-do-petroleum-engineers-do/petroleum-economics
