Upstream (petroleum industry)

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The oil and gas industry is usually divided into three major sectors: upstream (or exploration and production- E&P), midstream and downstream. [1] [2] The upstream sector includes searching for potential underground or underwater crude oil and natural gas fields, drilling exploratory wells, and subsequently drilling and operating the wells that recover and bring the crude oil or raw natural gas to the surface. [3]

Contents

Upstream Industry has traditionally experienced the highest number of Mergers, Acquisitions and Divestitures. M&A activity for upstream oil and gas deals in 2012 totaled $254 billion in 679 deals. [4] A large chunk of this M&A, 33% in 2012, was driven by the unconventional/shale boom especially in the US followed by the Russian Federation and Canada.

The aggregate value of Upstream E&P assets available for sale (Deals in Play) reached a record-high of $135 billion in Q3-2013. [5] The value of Deals in Play doubled from $46 billion in 2009 to $90 billion in 2010. With ongoing M&A activity the level remained almost the same reaching $85 billion in Dec-2012. However, the first half of 2013 saw approximately $48 billion of net new assets coming on the market. Remarkably, the total value of Deals in Play in Q3-2013 nearly tripled over 2009 at $46 billion, in less than four years.

Business

This categorization comes from value chain concepts, even before formal development Value Chain Management.

A company that owns and operates drilling rigs that are contracted by an operator to drill wells. Examples include Patterson UTI, Transocean, Nabors, and Cactus.

A company that has upstream as well as downstream operations. Examples include Saudi Aramco, ExxonMobil, BP, Royal Dutch Shell, ChevronTexaco, and SOCAR.

A company that has either upstream or downstream operations, but not both. Examples include Anadarko Petroleum, Sunoco, Phillips 66, ConocoPhillips, and Murphy Oil.

A company that provides products and/or services to the oil and gas industry. Usually a combination of labor, equipment, and/or other support services. Examples include Schlumberger, Halliburton, Saipem and Baker Hughes.

A company that specializes in the sale and distribution of equipment to the oil and gas industry. Examples include Siemens, Schneider Electric and ABB Group.

Many major security companies take part in securing the industry. [7]

Any other oil and gas related business not defined above such as software companies providing necessary IT services for easy execution in the oilfield. [6]

Upstream in ISO

ISO 14224 defines "Upstream" in its definition section as:
3.98 upstream [8]
business category of the petroleum industry involving exploration and production.

Example: Offshore oil/gas production facilities, Drilling rigs, intervention vessel.

See also

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Midstream

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References

  1. Upstream, midstream & downstream Archived 2014-01-07 at the Wayback Machine
  2. Industry Overview Archived 2017-05-08 at the Wayback Machine from the website of the Petroleum Services Association of Canada (PSAC)
  3. Coalbed Methane Basic Information Archived 2012-12-05 at the Wayback Machine
  4. "Archived copy". Archived from the original on 2013-11-05. Retrieved 2013-11-05.CS1 maint: archived copy as title (link)
  5. "Archived copy". Archived from the original on 2013-11-05. Retrieved 2013-11-05.CS1 maint: archived copy as title (link)
  6. 1 2 3 4 5 American Petroleum Institute Archived 2011-11-26 at the Wayback Machine Definition Of Upstream Company and description
  7. "Eyal Mesika - Security Issues in the Upstream Oil Industry - OilVoice". www.oilvoice.com. Archived from the original on 2017-04-20. Retrieved 2017-04-20.
  8. ISO 14224