Oil and Gas Trends

Upstream Industry Highlights

BP’s Strategic Portfolio Review Signals Discipline Amid Pressure: In response to shareholder demands and lagging performance, BP has launched a sweeping review of its upstream portfolio aimed at sharpening capital efficiency and boosting returns. The initiative, guided by incoming chairman Albert Manifold, may result in divesting stakes in key regions including Namibia, Brazil, and the Gulf of Mexico, while scrutinizing its North Sea operations under the weight of heavy taxation. The move accompanies a projected $4–5 billion in savings through 2027 and follows BP’s recent major deepwater discovery off Brazil, which underscores its exploration potential even as the company retrenches. getglobalgroup.com 

Major Midstream Deal Redefines Produced-Water Solutions in the Permian: Western Midstream Partners is set to acquire Aris Water Solutions in a $1.5 billion cash-and-equity deal, forming an integrated leader in Permian water management. The combined operations will cover everything from water gathering and disposal to recycling, beneficial reuse, and long-haul transport via the Pathfinder pipeline. With Hansen’s robust infrastructure, including nearly 800 miles of pipelines and the capacity to process over 1 million barrels per day of produced water, the merger addresses rising concerns around water regulation, rights, and cost-efficient reuse.

Norway Reignites Exploration with First Frontier Licensing Since 2021: Norway is stepping back into frontier exploration with its first major oil and gas licensing round since 2021. The expedited initiative comes amid declining domestic production and ahead of a tight parliamentary election, affirming the country’s commitment to energy security and regional economic stability. Although the timeline for license awards remains pending, this represents a pivotal shift from a four-year moratorium and underscores Norway's intent to sustain petroleum-driven export revenue and jobs. reuters.com

Setting the Stage for August 2025

As we enter August 2025, the upstream oil and gas sector is navigating a shifting operational and strategic environment. Recent legal rulings, policy reversals, and long-term production forecasts are introducing new variables into an already volatile market. This issue explores three developments with significant implications for upstream professionals: produced water ownership and reuse, Mexico’s embrace of fracking, and the long-term risks to U.S. energy dominance

Produced Water: From Waste to Strategic Asset

The Texas Supreme Court’s June ruling affirming that produced water is part of the mineral estate, unless explicitly excluded, has changed the commercial landscape for operators in the Permian and beyond (Inside Climate News). No longer just a disposal cost, produced water is being reconsidered as a resource, with potential for critical-mineral recovery, beneficial reuse, and enhanced environmental compliance. The upcoming 10th annual Permian Basin Water Conference (Aug 11–13, Midland) will showcase AI-powered treatment technologies and explore how this ruling could influence contract structures and investment priorities (Midland Reporter-Telegram).

Mexico Reverses Course: Pemex Greenlights Fracking

In a dramatic policy shift, Mexico has unveiled a 10-year plan to use hydraulic fracturing to tap its vast shale resources, reversing years of political opposition (Reuters). Targeting basins like Tampico-Misantla, Burgos, and Sabinas-Burro Picachos, Pemex expects to add 197 million barrels of oil and 303 billion cubic feet of gas by 2030. The move aims to bolster production, attract private partnerships, and counter financial headwinds after recent quarterly losses. However, execution will hinge on infrastructure investment, technology access, and environmental stewardship.

U.S. Energy Dominance Faces Long-Term Decline

A new Wood Mackenzie report warns that the U.S.’s current position as the top global oil and gas producer may not be sustainable past the mid-2030s (GlobeNewswire). Aging reservoirs, capital discipline, and the global pivot toward low-carbon energy, driven by China and other major economies, pose structural risks. Without breakthroughs in enhanced recovery, unconventional resource development, and supportive policy, U.S. output could fall by 1.7 million barrels of oil equivalent per day by 2040.

Charting the Road Ahead

These developments present both opportunity and risk for upstream stakeholders. Produced water rulings create new asset monetization pathways but also demand legal and operational adjustments. Mexico’s fracking reversal could unlock high-potential shale plays in a new frontier, though political and ESG considerations remain. And the long-term U.S. production outlook reinforces the need for diversification, advanced recovery techniques, and technology-driven efficiency gains. For industry leaders, the message is clear: adaptation and foresight will define competitive advantage in the decade ahead.