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Oil and natural gas remain the world's leading fuels, accounting for nearly 55% of global energy consumption

Oil and natural gas are formed from decaying plant and animal remains that became buried within layers of the earth and subjected to heat and pressure over millions of years. These two types of fossil fuels have been the world’s primary sources of energy for decades. They have enabled advances in quality of life and in all sectors of the economy, from residential lighting, cooking and heating to transportation and industrial manufacturing. However, the low carbon transition has put the oil and gas industry under pressure as these fuels are two of the main sources of greenhouse gases. The industry is associated with environmental disasters such as oil spills, and the prices of the two fuels – especially oil – are highly volatile with fluctuations directly impacted by political and socioeconomic events. Nevertheless, more than 100 countries currently produce oil and/or natural gas and the two fuels are expected to maintain their importance across the energy sector for many decades to come.

The production of oil and natural gas are often coupled as the two are typically found together in nature. The industry is commonly divided into three main operational sectors: upstream, midstream and downstream. The upstream sector incorporates the exploration and extraction of crude oil and natural gas reserves, while midstream focuses on transporting and storing the extracted products. The oil and natural gas then reach downstream processing facilities where they are refined, distributed and sold to the end customer. The product that reaches the end customer can take a number of forms including natural gas, liquefied petroleum gas (LPG), petrol, diesel fuel, jet fuel, heating oil, kerosene, asphalt and other petrochemicals. Several trends are currently impacting the future outlook of the oil and gas industry. The use of natural gas has increased across all economic sectors over the last few decades since natural gas – often viewed as a bridge fuel towards a low carbon energy system – burns cleaner than oil or coal for electricity generation. The switch to natural gas is becoming more widespread with the proliferation of the technology to liquify it (to LNG) for transport. Developments in shale gas and oil production have also greatly increased supply in the US, which has had implications in global oil, and increasingly LNG markets. Given a growing world population and continued demand for oil and gas products, discoveries of new deposits and advances in production technology will determine availability of supplies. Developments in carbon capture, use and storage (CCUS) will also impact the position of oil and natural gas in the long-term energy mix.

You can further explore the three sectors by clicking the links below:

Learn more about oil and gas extraction by exploring records published on our Energy Matrix.

For the latest news and articles on exploration and production read Petroleum Review.

Find the latest oil and gas consultations and policies in our Policy Milestones Calendar.

What's new?

Joint venture to develop oil and gas cluster in the Yamalo-Nenets Autonomous Okrug district

16-09-2021
Gazprom Neft and Lukoil are establishing a joint venture to develop a major oil and gas cluster in the Yamalo-Nenets Autonomous Okrug’s Nadym-Pur-Tazo...

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Energy Insight: World oil and gas - top ten (DSS01)

7-09-2021
Production and ConsumptionThe rankings for oil production and consumption reflect the political and economic situations of the countries concerned as ...

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Oil and gas companies failing to capitalise on MSGBC Basin’s huge gas discoveries

11-08-2021
Two major gas discoveries have been made in Western Africa’s MSGBC Basin.* However, oil and gas companies so far have failed to capitalise on these si...

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Energy insight: Methane emissions reduction – Part 1: Oil and gas

13-07-2021
For information on methane emissions related to coal, see Energy Insight - Methane Emissions reduction – Part 2 – Coal Why is methane a prob...

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South Sudan launches first oil and gas licensing round

23-06-2021
South Sudan has launched its first oil and gas licensing round in a bid to accelerate exploration and production at new and existing blocks. A total o...

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Events and training

EI LIVE free webinar | Installing Hywind Tampen: DOF Subsea & the world’s largest floating wind farm

29-09-2021
Registration for this event has now closed. If you'd like to attend please contact aberdeen@energyinst.org.This event is hosted as a free webinar from...

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EI LIVE free webinar | Human Factors Safety Critical Task Analysis

30-09-2021
A free EI Live webinar, providing an introduction and overview of Human Factors Safety Critical Task Analysis (SCTA) methodology.

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Hazardous Area Classification - October 2021

11-10-2021
This 3-day training course will provide delegates with training on the Energy Institute Model Safe Code of Practice 15, Area Classification for Instal...

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EI LIVE | Human Factors Foundation - October 2021

18-10-2021
This 5-day virtual learning course delivers a comprehensive introduction into human factors for non-specialists. It provides a practical, engaging and...

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Energy Sustainability Conference 2021

20-10-2021
The Energy Institute Nigeria has put together this conference to lend its voice among other energy players in Nigeria and the African Energy space to ...

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Technical guidance publications

HM 25. Guidelines for the assessment of uncertainty in the oil and gas industry

2021
The estimation of uncertainty is a very important feature of measurement data analysis and management in the oil and gas industry. This document gives...

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HM 71. Oil field produced water metering and analysis, offshore UK waters

2021
The Energy Institute (EI) Hydrocarbon Management Committee is responsible for the production and maintenance of standards and guidelines covering vari...

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EI Research Report: Determination of recalibration intervals for fiscal metering measurements (HM 1803)

2021
This report provides an overview of the four currently identified methodologies for determining calibration intervals:− Calendar-based− Co...

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Guidelines for in-service management of passive fire protection coating systems

2021
This document provides guidance on in-service management of passive fire protection coatings that have been applied to components such as fire barrier...

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Guidance on the identification and assessment of contaminants of emerging concern in soil and groundwater at industrial sites

2021
The aim of this guidance is to promote a risk-based and pragmatic approach to identification and management of CEC at industrial sites, which still co...

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