Upstream Oil and Gas Industry – Ultimate Guide

Upstream oil and gas is the segment of the petroleum industry that focuses on searching and extraction of oil or gas resources.

It is important to differentiate upstream petroleum industry from the downstream oil and gas. The downstream segment engages in activities within the industry that deal with finished products and getting them to the consumer.

Upstream Oil and Gas Supply Chain

The oil and gas sector has an elaborate supply chain network that covers exploration all the way to end-user.

It is composed of the company suppliers and their own suppliers.

Anything coming into your company from raw materials to finished products in the upstream oil and gas industry is part of your supply chain.

What are upstream projects?

An upstream project is one that relates to getting crude or discovered gas with an aim of getting it to the market.

In terms of equipment, there is an array of wellheads and a centralized processing plant before putting the oil into the pipeline.

Related: Oil and Gas Pipelines

What is Upstream Oil and Gas?

The petroleum industry is broadly divided into three segments namely: upstream (exploration and production), mid-stream (storage, refining and transportation) and downstream (supply and distribution).

The upstream segment primarily involves the processes of exploration, development and production of hydrocarbon resources.

For example,  as there is no production in Kenya today, this segment is primarily involved in exploration.

What is upstream and downstream?

The upstream industry finds and produces hydrocarbon resources, both onshore and offshore. The upstream is sometimes known as the exploration and production (E&P) sector.

Downstream industry includes oil refineries, petrochemical plants, petroleum products distributors, retail outlets and natural gas distribution companies.

Is oil refining upstream or downstream?

After crude oil is discovered and extracted—the upstream process—it’s shipped and transported—the midstream process.

Thereafter, the oil is refined, marketed, distributed, and sold, which is the downstream process.

However, the refining of crude oil to petroleum products may be conducted in midstream operations.