Oil and Gas Trends

Upstream Industry Highlights

Artificial Intelligence and Digital Transformation Drive Efficiency Gains: Upstream operators are increasingly leveraging artificial intelligence (AI) and advanced digital tools to optimize costs, enhance production, and improve revenue streams. This trend is accelerating in 2025 as companies face pressure from global tariffs and softer commodity prices. AI-driven analytics are now integral to asset performance monitoring, predictive maintenance, and real-time decision-making, enabling companies to remain competitive and resilient in a volatile market.

LNG Project Wave & Regulatory Shifts: A new wave of liquefied natural gas (LNG) projects is taking shape globally, supported by rising demand and a changing regulatory environment. In the US, a string of LNG approvals reflects a new regulatory reality, while internationally, major investments in LNG infrastructure are underway to meet both export and domestic power needs. This surge is also linked to increasing electricity consumption from data centers and industrial growth, driving natural gas demand projections higher through 2030.

Americas Liquids Growth Beyond the Permian: While the Permian Basin remains a key driver for US oil production, significant liquids growth is now emerging from other regions in the Americas. Notable developments are occurring in Argentina's Vaca Muerta shale and Brazil’s offshore pre-salt fields. These areas are attracting fresh investment and technological innovation, diversifying the sources of supply and reducing reliance on any single basin.

Strategic Mergers & Acquisitions Reshape the Sector: Mergers and acquisitions (M&A) activity remains robust in 2025, as upstream companies seek scale, portfolio optimization, and operational synergies. Recent deals are not only consolidating assets in mature regions like the Permian but are also enabling companies to enter new basins and access unconventional resources. This strategic focus on M&A is expected to continue as firms prioritize capital discipline and long-term resource capture in a mixed market environment.

A Year of Strategic Expansion and New Discoveries

The global upstream oil and gas industry is experiencing a dynamic 2025, marked by a blend of high-impact discoveries, major project sanctions, and a renewed focus on efficiency and resource capture. Despite ongoing geopolitical and market uncertainties, operators are pushing forward with ambitious exploration and development programs, targeting both mature basins and frontier regions. This edition highlights the latest developments shaping the international E&P landscape, offering insights for industry professionals navigating a rapidly evolving sector.

Major Project Sanctions Signal Industry Confidence 

2023 and early 2025 have seen a wave of multi-billion-dollar projects receive final investment decisions (FIDs), reflecting growing confidence in long-term demand resilience. Notable examples include:

• Brazil: TotalEnergies, Shell, and Repsol Sinopec Brasil greenlit the Lapa South-West oil development in the Santos Basin, with start-up targeted for 2025.

• Gulf of Mexico: Shell’s Dover deepwater project, a subsea tie-back to the Appomattox hub, is set to begin production by late 2024 or early 2025.

• Guyana: ExxonMobil sanctioned the $12.7 billion Uaru project, targeting over 800 million barrels of oil, with first oil expected soon.

These projects underscore the industry’s strategic shift toward deepwater and high-value developments, leveraging technology to maximize returns and minimize risk.

Exploration Hotspots: Kuwait, Namibia, & Beyond 

While the volume of new discoveries in 2024 was high—about 120 globally—most were incremental additions. However, certain regions stand out:

• Kuwait: The Jazza prospect is generating significant interest following the major al-Nokhatha and al-Julaia finds, which together could add nearly 3 billion barrels of reserves. Kuwait’s ambition to boost production capacity to 4 million b/d hinges on continued offshore success.

• Namibia: Although recent downgrades have tempered expectations, the Orange Basin remains a focus for both oil and gas, with international operators drilling new wells.

• Frontier Areas: Industry eyes are also on potential high-impact wildcats in Africa, the Eastern Mediterranean, and Southeast Asia, where new plays could reshape regional energy dynamics.

Regional Development Updates: Europe, Asia, & the Americas

Recent months have brought a flurry of activity across key regions:

• Europe: OKEA’s oil discovery in Norway’s Brage field and Turkey’s $30 billion Black Sea gas find highlight ongoing success in mature basins.

• Asia: Indonesia Energy is preparing for new drilling at the Kruh Block, while Petronas has signed new PSCs in Eastern Java and Indonesia, signaling continued investment in Southeast Asian E&P.

• Americas: The US Gulf of Mexico remains a hub of deepwater development, and Brazil’s pre-salt continues to deliver high-quality oil, with Petrobras announcing new finds in the Santos Basin.

Technology and Infrastructure: Enabling Deepwater & LNG Growth 

Technological innovation is central to the current wave of international projects:

• Floating Production: Samsung Heavy Industries’ multi-purpose LNG floating facility design, approved for deepwater deployment, exemplifies the push for adaptable infrastructure in challenging environments.

• Pipeline Expansion: New midstream projects, such as the Matterhorn Express Pipeline in the US, are alleviating bottlenecks and supporting LNG export growth, a trend mirrored in other regions.

• Digital Transformation: Operators are rapidly adopting digital tools for asset monitoring, predictive maintenance, and process automation, driving efficiency and reducing operational risk.

Outlook: Opportunities & Risks Ahead

Looking forward, the upstream sector faces a landscape of both promise and complexity:

• Resource Capture: Companies are prioritizing resource capture and efficiency, with M&A activity expected to remain high as firms seek scale and portfolio optimization.

• Geopolitical and Supply Chain Risks: High geopolitical tensions and supply chain pressures persist, but the industry’s confidence in long-term demand is supporting continued investment.

• Energy Transition: While the pace of transition varies by region, many operators are integrating lower-carbon solutions and CCS technologies into new developments.

Navigating a Transforming Global Upstream Sector

2025 is shaping up as a pivotal year for international exploration and development. With strategic investments in deepwater, LNG, and frontier exploration, the industry is balancing immediate operational challenges with a long-term vision for growth and resilience. As new projects come online and exploration targets shift, upstream professionals must stay agile, leveraging technology and strategic partnerships to navigate an increasingly complex global landscape.