Oil and Gas Trends

Upstream Industry Highlights

Exxon Greenlights $6.8B Hammerhead Project in Guyana: ExxonMobil has approved a roughly $6.8 billion investment for the Hammerhead development in the Stabroek Block offshore Guyana. This will be Exxon's seventh development in Guyana, targeting a production output of about 150,000 barrels per day, with startup expected in Q2 2029. Gas produced will also be directed into a local gas-to-energy network, continuing Guyana’s strategy of leveraging its offshore reserves for both export and domestic energy supply. (Reuters)

Oil & Gas Workforce in the U.S. Continues to Shrink: New data from the U.S. Bureau of Labor Statistics reveals a drop in employment figures for the oil-and-gas extraction sector. As of August 2025, the number of employees has fallen to about 119,100, which is down from around 123,100 at the beginning of the year. This is part of a longer-term trend of labor contraction, likely driven by cost pressures, automation, and consolidation. (Rigzone)

Accelerating Decline Rates Drive Investment Pressure: A recent IEA report highlights that decline rates across global oil and gas fields are accelerating, with an increasing share of upstream investments going just to offset natural declines rather than to grow production. Nearly 90% of annual upstream capex is now being used to maintain current output rather than expand it. This has serious implications for long-term reserve replacement and production stability. (Investing.com)

A Shifting Landscape

As Q3 closes and Q4 begins, the upstream oil and gas industry is confronting a fast-changing market. From geopolitics reshaping flows to major corporate pivots, operators and service companies alike are recalibrating strategies. This edition highlights three timely developments: Iraq’s pipeline restart through Turkey, BP’s shift away from a Rotterdam biofuels mega-project, and new climate research warning of policy headwinds. These stories underscore the dual challenge facing upstream professionals: delivering reliable hydrocarbons while navigating economic and regulatory disruption.

Iraq-Turkey Pipeline Restart Adds to Supply Pressure

After more than two years offline, Iraq and the Kurdish Regional Government have reached a preliminary deal to restart crude flows through Turkey. The line could return ~230,000 barrels per day of supply to global markets (Reuters). For producers, this adds to Q4 oversupply concerns already weighing on Brent and WTI. The restart highlights how regional geopolitics directly impact global balances and, by extension, price risk management strategies across upstream portfolios.

BP Cancels Rotterdam Standalone Biofuels Plant

BP has abandoned plans to build a dedicated biofuels plant in Rotterdam, citing weak market demand and a pivot toward capital-efficient co-processing at existing refineries (Reuters). For upstream professionals, this signals a renewed focus by supermajors on core oil and gas profitability. It also illustrates how majors are recalibrating energy transition strategies to emphasize flexibility and returns rather than large-scale standalone projects.

Infrastructure & Commercial Challenges

A study from the Stockholm Environment Institute and Climate Analytics warns that planned fossil fuel production expansions across top producers could derail 1.5°C climate targets (The Guardian). The report may influence investor sentiment and regulatory policy, particularly in OECD markets where ESG requirements already shape capital access. Upstream companies should anticipate tighter scrutiny and integrate emissions-reduction technologies, such as methane monitoring and CCUS, into their development roadmaps.

Implications for Upstream Strategy

Together, these developments frame a quarter of heightened uncertainty. Additional supply flows are pressuring prices, while oil majors are re-evaluating their transition investments. At the same time, regulatory and investor expectations on climate performance continue to mount. For upstream professionals, the strategic imperatives are clear:

• Hedge exposure against Q4 price volatility.

• Double down on operational efficiency to weather margin compression.

• Position portfolios toward advantaged, low-breakeven assets.

• Stay ahead of ESG expectations by embedding emissions mitigation and transparency into operations.

Agility Will Define Success

Q4 2025 will demand agility from upstream operators. Market fundamentals are shifting daily, corporate strategies are adapting in real time, and regulatory pressure is intensifying. Professionals who anticipate these changes by tightening capital discipline, leveraging new technologies, and aligning with emerging climate policies, will be best positioned to sustain resilience and capture opportunity. The upstream industry has always thrived on adaptation, and this quarter will once again test that strength.