Jurisdiction(s):
United Kingdom

Key definition

Upstream definition

What does Upstream mean? In legal practice, “upstream” describes exploration and production (E&P) activities: acquiring rights to search for petroleum, conducting seismic and appraisal, drilling and field development, and producing hydrocarbons to the point of export or entry into midstream infrastructure. It is a widely used commercial and regulatory descriptor rather than a defined statutory term, appearing across contracts, regulatory guidance and transaction documents. Typical upstream documents include petroleum licences and leases, assignments and farm-out agreements, joint operating agreements (JOAs), drilling and oilfield services contracts, security and project finance instruments, and decommissioning arrangements. Key legal issues include title to petroleum in situ and on production,...

Guide to upstream oilfield service agreements: lifecycle roles, key legal issues including cost, knock-for-knock and consequential loss, and standard forms for seismic, drilling, well services, construction and procurement

Published by a LexisNexis Energy expert

Practice notes

Role of oil service agreements in a petroleum project

A typical oil and gas project can be divided into four key stages, each marking a distinct step in the lifecycle from start to finish:

exploration/appraisal—when a company searches for oil/gas and determines whether the prospect is economically feasible
development—this phase begins once appraisal confirms economic viability, and therefore the necessary infrastructure to find and recover oil/gas out of the ground must be designed and constructed
production—during this stage, oil/gas is brought onstream, produced and sold; and
abandonment—when the company moves to plugging and abandoning operation, which takes place once the economics no longer sustain the project as a whole

For more details on the typical agreements seen in UK upstream oil and gas projects, see Practice Note: Upstream Oil and Gas Agreements on the UKCS.

The exploration phase is arguably the most critical within the cycle of an upstream petroleum project, because the oil and gas operator will conclude, during appraisal, whether the venture is ultimately commercially viable and therefore should progress into the development phase, or whether it should instead be halted...

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Web page updated on 21/05/2026

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