Crude is a mix of thousands of hydrogen-carbon compounds ranging from gases to solids as well as sulfur and other materials.

The oil industry drills thousands of feet into the earth to reach oil and gas trapped in porous limestone and sandstone.

"Black gold" began forming millions of years ago as plant and animal remains decayed in sediments at the bottoms of oceans, lakes and streams. Massive pressures and temperatures converted this organic matter into oil and gas. In rare circumstances, rock formations trapped large accumulations of crude oil that can be extracted in commercial amounts.

Modern refining and petrochemical technology can transform crude oil into literally hundreds of useful products, including fuels, plastics, waxes and lubricants.

Finding Crude Oil
Finding oil is an adventure, requiring skill, advanced technology and major investments.

Satellite imaging helps identify promising places to look. Seismic surveys bounce sound waves off boundaries between different rock layers. Powerful supercomputers generate three-dimensional "pictures" of underground formations.

Vessels tow listening devices that record low-frequency sound waves bounced off layers of rock below the ocean floor, creating pictures of underground rock structures that may contain oil.

Explorers can now see potential oil-bearing structures deep inside the earth that would not have been visible just a few years ago. But we never really know if there's oil there until we drill. A rotary drill cuts through rock using a bit with steel or even diamond-tipped teeth. Although the basic idea of drilling hasn't changed much over the years, technology has improved dramatically, particularly in challenging offshore and environmentally sensitive areas.

Drilling and production platforms now operate in waters nearly a mile deep, expanding the areas we can search for oil and allowing new deep-water resources such as the Gulf of Mexico and offshore West Africa to make a growing contribution to our oil supply.

The robotics, space-age metals and remote sensing devices used for oil exploration rival the space station as advanced technologies for a hostile environment.

Leading-edge technology is also used to protect the environment. Computer-controlled, extended-reach and horizontal drilling can penetrate rock formations miles away from a central offshore platform or onshore pad. The smaller footprint and wider spacing minimize local impacts and allow oil development to work hand-in-hand with sound environmental management.

Drilling rigs are used to reach oil and gas targets that may be miles from the surface. Inset: Drill bits often use diamond chips to cut very hard rock.

Pipelines made of special metal alloys bring offshore oil and gas to onshore treating facilities. Critical equipment and facilities undergo computer modeling and simulations to test and improve their design before installation. Computerized controls allow improved air quality and safety.

It's a Global Market
In 1900, the world consumed less than a half million barrels of oil per day (each barrel contains 42 gallons), 80 percent supplied by the United States. By 2000, the world was consuming 67 million barrels per day, and the U.S. was producing only about one-tenth of the total — less than half its own requirements.

This dramatic growth over the last century was spurred by the globalization of the industry with major resource discoveries, not only in the Middle East, but in over 75 countries.

In 1960, a group of major producing countries formed the Organization of Petroleum Exporting Countries (OPEC). With 80 percent of the world's oil reserves and more than 40 percent of world production, OPEC continues to play a major role in the world oil market. OPEC's surplus capacity, particularly in the Middle East, gives it significant ability to affect world oil prices by raising or cutting production levels.

But worldwide market forces limit even this influence.

Oil companies have always had strong incentives to find new oil supplies. In the last 25 years, major new oil production has been added in the North Sea, Malaysia and Mexico, and new discoveries will soon come onstream in Angola, Chad, the Caspian region and Brazil.

Hundreds of companies are involved in oil exploration and development around the world, competing for access to resources and improving the technology and know-how to produce oil as efficiently as possible.

Moving Oil Where It's Needed
Crude oil has to be moved from where it's produced to where it's used. Middle Eastern countries produce about 30% of the world's oil, but consume relatively little. Currently, the United States imports about half and Japan virtually all of their oil needs. Because of these disparities, about half the world's crude oil needs to be moved across the oceans, accounting for nearly half the world's seaborne trade.

OPEC, The Organization of Petroleum Exporting Countries, produces much of the world's oil today.

To carry oil, the industry uses tankers ranging from small coastal ships of 10,000 tons to modern Ultra Large Crude Carriers (ULCCs) of over 500,000 tons, the largest ships ever built.

In addition to being very efficient, ocean transport of oil is very safe. In the year 2000, ExxonMobil operations spilled less than two teaspoons of oil for every million gallons transported. As new double-hulled tankers enter service, we expect to continue progress toward our objective of meeting consumer needs with zero spills.

A complex logistics network of tankers, barges, railcars and trucks moves gasoline to market.

Oil for the Future
From time to time, pundits predict that the world will soon run out of oil. In reality, proved oil reserves have doubled over the last 30 years from 500 billion barrels to over one trillion barrels. How can we use so much oil and still increase remaining reserves? The answer is that we keep finding more oil than we consume.

More than one-half of the world's current crude oil reserves are located in the Middle East.

The oil industry continues to invest billions of dollars every year in finding and developing new reserves. Over the last 20 years, for example, ExxonMobil has spent $165 billion to search for and develop new oil and gas reserves. Just one project — the state-of-the-art ExxonMobil Hoover-Diana development in the Gulf of Mexico — cost more than $1.6 billion.

Key to the Future: Access
Every year, the oil industry learns how to find and produce oil in even more remote areas with even less impact on the environment.

Access to areas that have not yet been heavily explored is vital to finding new reserves and to meeting the world's growing energy needs. Competitive access by the world oil industry to previously closed acreage in the Former Soviet Union, China, Venezuela and Brazil has brought major benefits to oil consumers worldwide. Large areas of Europe and the United States, however, remain unavailable to exploration. Today, areas offshore California and Florida, the Alaska National Wildlife Refuge (ANWR) and about 40 percent of all non-park western lands are off limits.

Drilling has moved into deeper and deeper water as technology has improved. Robotics and other high tech tools are becoming more common and can work in water two miles deep.

With technology and access, we expect oil to continue its critical role in meeting world energy needs for decades to come.