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?

IEA’s ‘net zero roadmap’ calls for an end to new oil and gas exploration

There can be no new oil and gas exploration or development if the world is to align with a net zero emissions pathway by 2050, according to a major new report from the International Energy Agency (IEA). In Net Zero by 2050: A Roadmap for the Global Energy Sector, the agency sets out over 400 mi...

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Spain bans new oil and gas drilling

Spain has become the latest EU member state to place a ban on domestic oil and gas exploration following the passing of a climate and energy transition bill in its Congress on 13 May. The legislation states that the country cannot issue new fossil fuel exploration and production licences, and t...

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Digital twins to become mainstay as oil and gas sector optimises costs

The oil and gas industry is increasingly deploying digital twins to improve decision-making, as the prevailing industry downturn from COVID-19 has heightened the need to reduce costs and make operations more sustainable with technology, says GlobalData.Worldwide lockdowns have significantly impacted...

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Using wave energy to power oil and gas platforms

Lundin Energy and Ocean Harvesting Technologies are collaborating on a new R&D study on how installation of wave energy converters could potentially provide clean, stable and cost-effective electricity to an offshore oil and gas platform. The one-year project will run until February 2022.Lundin ...

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Oil and gas industry charts course to achieve UN sustainable development goals

A new roadmap has been published by the global oil and gas industry association IPIECA, in collaboration with the World Business Council for Sustainable Development (WBCSD), that identifies how IPIECA and oil and gas companies working within the sector can work towards a low emissions future while c...

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Events and training

Ageing and Life Extension of Offshore Structures for Oil, Gas and Wind Energy - Free Webinar

A one-hour FREE webinar that will give you an understanding of managing ageing and life extension of structures for offshore oil and gas installations and wind turbines.

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EI LIVE | Ageing and Life Extension of Offshore Structures for Oil, Gas and Wind Energy

This online course, delivered over four half days, will give you an understanding for managing ageing and life extension of structures for offshore oil and gas installations and wind turbines.

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EI LIVE | Incident Investigation and Analysis using the Tripod Beta Methodology - September 2021

A 5-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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Oil and Gas Industry Fundamentals - Awareness - September 2021

This 2-day training course provides delegates with an overview of principal activities in the international upstream, midstream and downstream petroleum industry.

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Hazardous Area Classification - October 2021

This 3-day training course will provide delegates with training on the Energy Institute Model Safe Code of Practice 15, Area Classification for Installations Handing Flammable Fluids. This internationally recognised publication provides methodologies for carrying out Hazardous Area Classification st...

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Technical guidance publications

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

This report provides an overview of the four currently identified methodologies for determining calibration intervals:− Calendar-based− Condition-based− Performance-based− Risk-basedFor each method, the procedure for implementing the methodology is described, the advantages a...

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

This document provides guidance on in-service management of passive fire protection coatings that have been applied to components such as fire barriers, key structural elements and items of process equipment to provide a predetermined level of protection from a given fire and/or explosion event.Guid...

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

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 complies with legal requirements dependent on the country or region where the site is located. The guidance provides advice tothe reader at all stages i...

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Guidance on managing obsolescence and upgrading industrial automation and control systems (IACS)

This publication provides information and guidance on the factors that should be considered in the successful management of obsolescence of an IACS, by providing a practical approach and suggested courses of action. Each and every IACS is different as a result of its unique use, and varies depending...

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Model Code of Safe Practice Part 9: Liquefied petroleum gas - large bulk storage

This technical publication provides good practice guidance on the layout, design, operation and integrity management for bulk LPG storage installations storing volumes of LPG that are typically subject to Seveso III Directive, like those encountered at fixed installations atmanufacturing facilities ...

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