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UPSTREAM
Upstream is a term that refers to all aspects of the oil and gas industry involved in the exploration, development and production of hydrocarbons. The upstream oil sector is also known as the exploration and production (E&P) sector.
Upstream activities involve much more than exploration (see separate section). Once a discovery is made by an exploration well, the upstream company in charge of the field (known as the operator) drills one or more wells nearby to appraise the size of the discovery and gain an understanding of how much oil or gas could actually be brought to the surface.
The operator uses information from appraisal drilling to plan the development of the field in a way that maximises the flow of hydrocarbons from the field and the total recovery.
The upstream industry is expensive, high risk and demands very high technical skills. This is why the industry is dominated by a small number of very large companies in the private sector, including ExxonMobil, BP, Chevron and Shell.
Upstream companies owned and run by the governments of developing nations are an increasingly powerful force in the industry, and today control many of the world’s most prospective areas.
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