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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 on this topic.

For the latest news and articles on exploration and production read New Energy World.

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

What's new?

UK government under increasing pressure to introduce oil and gas windfall tax

11/05/2022
The controversial one-off levy is one of several measures being proposed to tackle energy crises which have sent household bills rocketing in the UK a...

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Energy saving actions outlined for EU

11/05/2022
The actions outlined in Playing my part: How to save money, reduce reliance on Russian energy, support Ukraine and help the planet have been designed ...

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Global energy markets face unprecedented uncertainty and a 1.5°C pathway remains increasingly challenging

04/05/2022
Including analysis to help calibrate the invasion of Ukraine with the longer-term energy transition momentum, the report presents five energy scenario...

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Gas price volatility rises after Russia halts gas exports to Poland and Bulgaria

04/05/2022
Russia’s decision to cut off gas flows to Poland and Bulgaria will significantly impact these two countries, although the knock-on effects should be m...

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Eastern Caribbean’s first power plant with LNG terminal to be constructed in Antigua

04/05/2022
The project in Antigua combines both a power plant and an LNG gas terminal, storage and regasification facility, the first of its kind to be installed...

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Events and training

Economics of the Oil and Gas Industry - Nigeria

29/06/2022
ECONOMICS OF OIL & GAS INDUSTRY TRAINING

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EI LIVE | Ageing and Life Extension of Offshore Structures

06/09/2022
This one-day online course will give you an understanding of managing ageing and life extension of structures for offshore oil and gas installations a...

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Introduction to Oil and Gas - September 2022

12/09/2022
This 2-day training course provides delegates with an overview of principal activities in the international upstream, midstream and downstream petrole...

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Hazardous Area Classification - October 2022

11/10/2022
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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Technical guidance publications

Guidelines for the assessment of ageing and life extension of non-metallic components in the offshore oil and gas industry, volume 1: subsea flexible pipes and offshore marine hoses

2022
The intention of this publication is to provide guidance for assessing ageing and life extension (ALE) of non-metallic components in the offshore oil ...

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Guidance on quantified human reliability analysis (QHRA)

2022
This document is free to download for all registered users of this site.EI Guidance on quantified human reliability analysis (QHRA) (second edition) p...

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Guidance on the management of the hazard of vessel impact with offshore structures

2022
This publication provides guidance on the management of the hazard of vessel impact with offshore structures.This guidance is considered relevant to m...

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Minimal staffing and lone working: ensuring employee safety and wellbeing in the power sector

2022
This publication is free to download for registered members of this site.This publication provides good practice guidance to help organisations manage...

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Performance standards for structural safety critical elements

2022
Performance standards (PSs) are defined to provide evidence that risk levels for offshore structures in use by the Oil and Gas Industry remain accepta...

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