Oil and natural gas remain the world's leading fuels, accounting for nearly 60% 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?

Reducing methane emissions from oil and gas

1-04-2020
Reducing carbon dioxide emissions is clearly the key to tackling climate change, but there should also be a focus on methane, a shorter-lived but more potent greenhouse gas. Catherine Cosgrove and Daniel de Wijze of the Energy Institute Knowledge Service report.

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Reducing methane emissions from oil and gas

1-04-2020
Reducing carbon dioxide emissions is clearly the key to tackling climate change, but there should also be a focus on methane, a shorter-lived but more potent greenhouse gas. Catherine Cosgrove and Daniel de Wijze of the Energy Institute Knowledge Service report.

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

20-03-2020
For information on methane emissions related to coal, see Energy Insight - Methane Emissions reduction – Part 2 – Coal Why is methane a problem for the climate?Methane (CH4) is the third most abundant greenhouse gas in the atmosphere (after water vapour and carbon dioxide (CO2)). Any metha...

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Data leads the drive to help maximise UK oil and gas economic recovery

19-03-2020
Some 6,000 subscribers from hundreds of organisations have downloaded more than 340 terabytes – equivalent to around 85,000 HD movies – of information in the year since the Oil & Gas Authority (OGA) launched the National Data Repository (NDR) on 25 March 2019.The release – at https://ndr.og...

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Oil and gas discovery near the Balder field

18-03-2020
Mol Norge, operator of production licence 820S, has made a discovery near the Balder field in the central part of the North Sea. Oil and gas were found in a number of formations and were successfully tested for about 3,463 boe/d. The potential resources discovered in the main formation are reported ...

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Events and training

Avoidance of Vibration Induced Fatigue Failure in Process Pipework - May 2020

4-05-2020
20% off for all of March - please enter promo code HSRM20 when bookingThis 3-day course will provide delegates with an understanding of the use of the Energy Institute Guidelines as a management tool and assessment methodology to manage the risk of a vibration induced failure.

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Oil and Gas Mergers & Acquisition: Acquiring and Divesting Assets and Companies - May 2020

11-05-2020
This 3-day training course focuses on integrating an understanding of Mergers & Acquisition (M&A) activity trends, the process involved in conducting M&A activity and and the skills that requires. This includes presentations, case studies, exercises and discussions.

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Human Factors Safety Critical Task Analysis Training - May 2020

21-05-2020
20% off for all of March - please enter promo code HSRM20 when bookingA 2-day training course addressing Human Factors issues in COMAH Safety Reports, teaching delegates how to carry out Human Factors Safety Critical Task Reviews.

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Webcast: Energy investment and innovation - Strategic challenges for an industry in transition

2-06-2020
The outbreak of the coronavirus COVID-19 has quickly evolved into a global crisis, with tragic human loss and a profound impact on businesses around the world. The steep drop in energy demand and parallel oil price war have caused the oil price to sharply fall resulting in the energy industry announ...

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Conducting Incident Investigations & Analyses using the Tripod Beta methodology - September 2020

8-09-2020
A 3-day training course providing both a theoretical and practical overview of the Tripod Beta methodology, enabling delegates to support and conduct incident investigations and analyses

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Technical guidance publications

EI Research report: Measures and key performance indicators to manage maintenance in upstream petroleum production

2020
This research report details the findings and recommendations of a research project into maintenance performance measures for the upstream oil and gas industry. The aim of the research was to explore the practicalities of reporting maintenance management measures.The industry scope was upstream petr...

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Guidelines for the management of safety critical elements

2020
The purpose of this technical publication is to provide industry guidance for the management of safety critical elements (SCEs) throughout the life cycle of a facility from conceptual design, through the operate phase, to changes such as life extension and decommissioning. An SCE is any part of a fa...

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Guidance on human factors safety critical task analysis

2020
This publication is free to download, please log in to see the download option.The first edition of Guidance on human factors safety critical task analysis filled a gap by enabling companies and human factors (HF) non-specialists to conduct quality HF analyses in a structured and consistent format. ...

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French translation - Good practice guideline - The safe management of small service vessels used in the offshore wind industry

2020
This is the French translation of the publication Good practice guideline - The safe management of small service vessels used in the offshore wind industry. This is a translation of the 2nd edition of the English, which can be downloaded for free here.The G+ Global Offshore Wind Health &am...

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Guidance on safety integrity level determination for safety instrumented systems in support of IEC 61511

2020
Most process plants are controlled by complex process control systems; there is increasing dependence on safety instrumented systems (SISs) to carry out safety instrumented functions (SIFs).This technical publication focuses on quantitative and semi quantitative safety integrity level (SIL) determin...

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