September 23, 2025
by ConocoPhillips is one of the first companies operating in the upstream sector in the oil and gas industry. This means that its main activity revolves around the exploration of natural gas and the extraction of crude oil from underground, and it is not engaged in refining or selling the final products made from oil, gasoline, and its derivatives.
To understand this classification more accurately and deeply, it is necessary to structurally review the oil and gas industry, which can be divided into several sections: upstream, midstream, and downstream.
Understanding the Upstream and Downstream Sectors in the Oil and Gas Industry
1. The Upstream Sector
Also known as the productive and exploratory section, it is considered at the beginning of the value chain and consists of several activities:
1- Exploration: Mainly relies on searching for new sites that are likely to contain oil and gas by using techniques such as seismic survey.
2- Drilling: Depends primarily on drilling wells to confirm the existence of oil and gas reserves and extract them.
3- Production: Relies on extracting both gas and oil from wells and preparing them for transportation.
4- Simply, upstream companies are considered the primary responsible for finding oil and gas and extracting them from underground.
2. The Downstream Sector
This section works on processing the raw materials produced by the upstream sector to convert those materials into a final product that can be used in many industries.
Refining: Processing crude oil by refineries in order to separate it into products such as diesel, jet fuel, asphalt, gasoline, and petrochemicals.
Distribution and Marketing: Transporting the refined products to fuel stations, such as Chevron, which is considered one of the most important commercial markets.
3. The Midstream Sector
This sector connects between upstream operations.
Where Does ConocoPhillips Stand in This Framework?
Based on the previous instructions, the classification of ConocoPhillips is very clear. The company is considered one of the first companies that operate in exploration and production (E&P). By looking at the global operations carried out by this process, which extend from the Permian Basin to the oil fields in Norway, Australia, and Alaska, we find that it focuses on:
Exploring many new resources such as gas and oil.
Operating and developing wells to prepare them for the production process.
Selling oil as well as natural gas to refineries and companies, so distribution is important when looking at its global operations.
ConocoPhillips does not own or operate its own refineries and does not own its own network of fuel stations. This placed it in the category of pure upstream companies, unlike large integrated companies.
Comparison with Other Oil and Gas Companies
Chevron: An integrated company that can operate actively and vigorously in both downstream and upstream. It explores oil and gas around the whole world and also owns many refineries used in refining, as well as operating thousands of fuel stations under the Chevron brand.
1- ExxonMobil: Very similar to Chevron. ExxonMobil is an integrated and highly distinguished company. It has strong pressure in conducting exploration and production operations, and it is one of the largest petrochemical companies (downstream).
2- Halliburton: Not directly classified within these sectors. It is considered an oilfield services company. Its main value is providing specialized services such as hydraulic fracturing used in production and exploration operations by ConocoPhillips. Therefore, it is a vital partner for the upstream sector.
This simple comparison highlights the importance of ConocoPhillips’ position, which is unique as a company focusing on upstream operations, enabling it to direct all its expertise toward the sustainability of production operations.
Why Does ConocoPhillips Specialize in the Upstream Sector?
ConocoPhillips focuses on the upstream sector as a strategic decision of the company. There are many advantages:
3- Specialization and Efficiency: Resources generally rely on advanced technology and engineering to extract many resources at lower cost and higher flexibility.
4- Flexibility: The ability to adapt according to fluctuations in oil prices by improving its production asset portfolio without being linked to the fixed costs of the refining process.
5- The Main Driver: Supplying markets with raw materials such as oil and gas, on which downstream and manufacturing industries rely.
The Importance of Upstream Companies in the Energy Ecosystem
Upstream companies such as ConocoPhillips are considered the cornerstone of global energy security. They are responsible for the extension and provision of basic supplies that increase national income.
However, these companies may face many challenges, including:
1- Geopolitical pressures.
2- Capital and economic challenges.
3- Shifts in energy policies.
This does not diminish their importance in the energy era, as natural gas works as a transitional fuel, and technologies such as carbon capture and hydrogen are being invested in.
In short, these are upstream companies that rely on oil and natural gas exploration. This specialization makes them unique and distinguished, unlike integrated companies such as ExxonMobil and Chevron.
The Future of ConocoPhillips in Light of Energy Transition
In the era of modern technology with distinctive challenges and opportunities, the company has announced clear strategies that focus on:
Enhancing operational efficiency through artificial intelligence and digital technologies that reduce production costs and carbon emissions.
Focusing on natural gas as a transitional fuel with lower emissions than coal to support energy alongside an increasing share of renewable sources.
Investing in new technologies such as carbon storage and blue hydrogen, which preserve the role of these materials as energy providers while reducing the carbon footprint.
This approach clearly shows the role of upstream companies
that are still vital, from being ordinary crude oil suppliers to true and effective partners in directing low-carbon energy.
The conference IDCE2025 distinguished itself as a comprehensive platform that brought together the four pillars of sustainability: environmental, economic, social, and technological. The discourse was not limited to advanced technologies like green hydrogen and advanced solar power, but extended to encompass mechanisms for sustainable finance, ensuring a just energy transition, and empowering local communities. This holistic approach guarantees that the fruits of this transformation are inclusive for all.