Oil and Gas Trends

Upstream Industry Highlights

ExxonMobil Selects Contractor for Major Guyana Gas Project FEED Phase: ExxonMobil has chosen U.S.-based McDermott International to conduct the front-end engineering and design (FEED) work for the proposed Guyana offshore gas development. The project would supply natural gas to a planned onshore power facility, supporting Guyana’s transition toward lower-cost, gas-fired electricity. This represents a significant step toward unlocking the broader Stabroek Block’s gas potential. (Reuters)

Brazil Approves Petrobras Exploration in the Ecologically Sensitive Potiguar Basin: Brazil’s environmental regulator IBAMA has granted Petrobras approval to begin drilling three exploratory wells in the Potiguar Basin, off the northeast coast. The region has become strategically important as Petrobras expands exploration outside the mature pre-salt areas. The decision comes with strict environmental conditions, reflecting Brazil’s balancing act between energy development and conservation. (Reuters)

U.S. Oil Production Reaches a New Record Heading Into Winter: The U.S. Energy Information Administration (EIA) reports that U.S. crude production hit a new all-time high, surpassing 13.3 million barrels per day. The jump is driven largely by productivity gains in the Permian Basin and improved completion efficiencies. Higher output arrives just as winter demand patterns begin tightening global balances, giving U.S. producers a stronger footing despite price volatility. (WallStreetJournal)

A Week of Shifting Investment, Supply Dynamics, & Deal Activity

Last week brought several impactful developments for upstream operators worldwide. Egypt is attracting major new capital into offshore exploration, U.S. crude stockpile shifts are signaling changes in short-term supply balance, and dealmaking in the upstream sector continues to soften as commodity prices wobble. 

Egypt Positions Itself as a Regional Gas Hub

Egypt made headlines as President Abdel Fattah el-Sisi met with Eni CEO Claudio Descalzi to discuss up to $8 billion in new upstream investments, particularly in the Mediterranean offshore region. According to Reuters, the discussions centered on:

• Accelerating offshore gas exploration

• Expanding LNG export infrastructure

• Enhancing Egypt’s role in East-Med gas supply

Why it matters:

• More East-Med gas supply could influence global LNG flows.

• Service companies may see demand growth in subsea, drilling, and geoscience.

• Operators in the region should anticipate heightened activity and competition for rigs and talent.

U.S. Crude Stockpiles Fall as Exports Rise

The latest U.S. EIA data shows a notable drawdown in crude inventories, paired with rising refinery utilization and export volumes. The Wall Street Journal reports that stronger export demand and higher refinery runs are tightening near-term supply.

Operational takeaways:

• Refineries are ramping throughput headed into winter fuel season.

• Export trends reflect continued global demand for U.S. crude, even amid price volatility.

• Upstream producers may see improved short-term pricing depending on regional differentials and pipeline flows.

U.S. Upstream M&A Activity Falls Again

According to oilprice.com, upstream dealmaking in the U.S. has slowed for yet another period, driven largely by commodity-price softness and widening bid-ask spreads between buyers and sellers.

What this means for operators:

• Fewer large transactions, especially in shale basins.

• Companies are prioritizing cash flow over acquisition-driven growth.

• Private equity buyers are cautious, waiting for more pricing clarity.

• Deal slowdown could create opportunities for disciplined acquirers early next year.

Strategic Implications for Upstream Teams

Each of these trends points toward larger strategic themes emerging as the industry enters late Q4:

• International gas investments are accelerating, especially in regions with LNG export optionality.

• U.S. supply balances remain fluid, underscoring the importance of flexible production strategies.

• Deal markets are cooling, signaling that capital efficiency and organic development will be central in 2026.

Upstream teams should monitor global LNG trends, watch domestic storage and export data closely, and prepare for a cautious but opportunistic M&A environment heading into Q1.

Preparing for a Dynamic End to 2025

Last week’s developments underscore a pivotal moment in global upstream activity. Egypt’s massive investment conversations highlight growing international appetite for gas development, U.S. stockpile and export shifts reflect an evolving supply picture, and declining deal activity signals a cautious capital environment. For upstream professionals, staying informed and agile, both operationally and strategically, will be key to navigating the final stretch of 2025 and positioning for opportunity in early 2026.