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?

IEA calls for oil and gas sector to step up climate efforts now

20-01-2020
Oil and gas companies are facing a critical challenge as the world increasingly shifts towards clean energy transitions. Fossil fuels drive the companies’ near-term returns, but failure to address growing calls to reduce greenhouse gas (GHG) emissions could threaten their long-term social acceptabil...

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Global oil and gas discoveries reach four-year high in 2019, boosted by ExxonMobil’s Guyana success

9-01-2020
The world’s oil and gas explorers powered ahead and discovered 12.2bn boe in 2019, the highest volume since 2015, according to estimates from Rystad Energy. Last year recorded 26 discoveries of more than 100mn boe, with offshore regions dominating the list of new oil and gas deposits.Guyana’s succes...

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UK leads global reduction in oil and gas operational production costs

8-01-2020
Operational production costs in the oil and gas industry have fallen across the globe, with the UK emerging as a cost-cutting powerhouse among global offshore regions, according to the latest analysis from Rystad Energy.Examining regional opex reduction per barrel, measured in local currency, the co...

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Oil and Gas Cybersecurity Price Tag Could Top $20B

27-11-2019
Oil and gas companies will spend more than $20 billion on cybersecurity by 2023, according to a survey conducted by the consulting firm BDO. 

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Offshore floating wind to power Norwegian oil and gas platforms

1-11-2019
The world’s largest floating offshore wind farm, and the first to power offshore oil and gas platforms, will be built by Siemens Gamesa for deployment off the coast of Norway.The company has been awarded five contracts by Norwegian energy company Equinor to supply wind turbines to the Hywind Tampen ...

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Events and training

YPN Time out with the CEO

30-01-2020
YPN Time out with CEO

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Oil & Gas Fundamentals - Awareness - Nigeria - February 2020

8-02-2020
This 2-day awareness training course provides delegates with an overview of principal activities in the international upstream, midstream and downstream petroleum industry.

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Economics of the Oil and Gas Industry

8-02-2020
This 2-day course introduces the economics that drive the oil and gas industry. Participants in this course will learn about the oil and gas value chain and will consider the costs, revenues and risk associated with various stages in the chain. Basic economic principles such as Net Present Valu...

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Orbital Marine Power – delivering low cost tidal energy

11-02-2020
<p>The presentation will explain the conceptual benefits of the Orbital Marine floating tidal technology across construction, installation and operational phases of a tidal energy project.</p>

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The Hydrogen Economy Once it had a past, but what is its outlook?

18-02-2020
Join the EI East Midlands branch for a talk on the hydrogen economy.

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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 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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HM 54. Guidelines for the management of measurement for the upstream oil and gas industry

2019
More companies are electing to employ third parties to manage their legal and commercial measurement obligations and to undertake allocation of individual fields from commingled streams. Therefore the issue of management of measurement is becoming increasingly more important.This second edition high...

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HM 78. Guidelines for meter selection for the upstream oil and gas industry

2019
This publication has been produced as a high-level guideline on meter selection by those involved in the upstream oil and gas industry. The selection of the correct meter or primary element along with the appropriate secondary instrumentation is fundamental to the performance and/or reliability of a...

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