Upstream Oil and Gas (Exploration and production industry)

Definition - What does Upstream Oil and Gas (Exploration and production industry) mean?

Upstream Oil and Gas is a sector of the oil and gas industry which deals with exploring hydrocarbon reserves, extracting and transporting them for further processing. In simple terms Upstream Oil and Gas is also referred to Exploration and Production (E&P) sector. The Exploration of reserves can be on-land also called as onshore or in sea also called as offshore.

Petropedia explains Upstream Oil and Gas (Exploration and production industry)

The oil industry is a massive and complex in nature. It is divided into three segments, i.e., upstream, midstream and downstream. Upstream is the very first step in the oil industry followed by the midstream and downstream.

Further this upstream involves a series of operations that include

Searching out the location for reserves & evaluating potential locations: This is the task of geologists and geophysicists. With the use various tools and techniques like seismic surveys, satellite images, magnetometers, air guns, explosives and seismometers they are able to assess the presence of hydrocarbons.

Drilling wild cat or exploratory wells: Once the potential site is selected an exploratory well is drilled to check the physical presence of reserves and based on this data further exploratory wells are drilled in nearby locations to evaluate the potential of the reservoir in study. On strike of oil reserves E&P organizations declare that site as discovery and moves to extraction.

Drilling & operating producing wells: To extract the reserves often 10 to 12 wells are drilled in a particular location and they are connected to the processing platforms for Initial separation or purification of the extracted components before they are transported or put in use.

Simply, the upstream industry provides input for the midstream and downstream sector of the oil and gas industry. Continuous searching of oil reserves, drilling wells and producing oil with maximum recovery is essential for a strong foundation for the downstream industry without which survival of the midstream and downstream is a questionable.

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