What is upstream and downstream in an IS Oil?

[Former Member]

Hi,

Its a very basic question? Actually i am working for a oil co implementation? Si i cam to the site looking for some clues/ best practices on the oil/ gas implementations.

what is this upstream and downstream in an IS Oil implementation? I have not come across this term earlier in a sap implementation.

Is this specific to oil gas industry? may be my implementation does not have a upstream downstream concept..

please advise.

regards

[Former Member · Accepted solution]

Hi Rajiv,

The very basic answer is ....

Upstream refers to activities related to finding and producing oil and gas. Midstream refers to activities related to transporting and marketing oil and gas once it has been produced from the a well. Downstream refers to activities related to refining oil and gas into finished products and includes retail sale of those finished products.

Regards

[Former Member]

Hi Rajiv,

Stream is determined by the flow of material.

UpStream :- In Oil and Gas industry initial investment is very high for locating the source for crude oil and then getting the permission for the government of the country where that source lies and then extraction of the oil. a company all along can not bear that expanse so it involves big join ventures ... and in this if you notice then the material (crude oil) is following up .. i.e. from underground source to refineries .. this is called up streams and this covers join venture accounting, and all the finance related stuffs. for more detail on this check out this link

http://help.sap.com/saphelp_oil472/helpdata/en/ec/9d2c3adcc8431be10000000a114084/frameset.htm

Downstream :- This includes the refinement, storage, transportation, measurement and retail of final oil and gas product ......

In existing core R/3 sales and distribution a lot of changes has been done for down stream oil and gas functionality. for more detail in this please check out this link :

http://help.sap.com/saphelp_oil472/helpdata/en/09/c7183619b5a45ee10000009b38f889/frameset.htm.

Thanks.

Regards,

Aditi.