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?

Arctic oil and gas auction sees limited interest

7-01-2021
The US Trump administration’s auction of drilling rights in Alaska’s Arctic National Wildlife Refuge (ANWR) received limited interest.With an increasing number of banks saying they will not finance Arctic energy projects, major oil companies were uninterested in the leases. Instead, the state agency...

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Denmark bans new oil and gas exploration

30-12-2020
Denmark – now the largest oil producer in the European Union – has announced it will end all new oil and gas exploration in the North Sea as part of its wider plan to cease fossil fuel extraction by 2050. There are 55 oil platforms located across 20 oil and gas fields on the Danish continental ...

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New net zero requirement for UK oil and gas industry

16-12-2020
A revised strategy from the Oil & Gas Authority (OGA) has been submitted to the UK Parliament, featuring for the first time an obligation on the sector to support the UK’s net zero target.Oil and gas currently meet about 75% of the UK’s energy consumption and official government forecasts expect...

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Denmark to end offshore oil and gas E&P by 2050

4-12-2020
The Danish government has announced that it plans to end all oil and gas exploration and production in the Danish sector of the North Sea by 2050 and is to cancel its latest licensing round.Denmark announced ambitious climate targets last year, aiming to reduce emissions by 70% by 2030 and achieving...

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Net zero North Sea – a managed transition for oil and gas

3-12-2020
The UK and Scottish governments must together develop a new ‘net zero deal’ to keep North Sea oil and gas in the ground and invest in low-carbon industries to replace them, says a new report from the Institute for Public Policy Research (IPPR).As the oil and gas industry reels from the impact of COV...

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Events and training

EI LIVE | IP Week 2021

23-02-2021
For more information and to book your place, please visit ipweek.co.uk.Attend one of the biggest events in the energy sector and get together virtually with over 1,500 industry professionals from over all over the world to hear the latest news and updates, debate key issues, and network to form...

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EI LIVE | Asset Management

10-03-2021
EI Knowledge Partner: Future-proofing asset management through latter stages of production operating life into a net zero energy transition model towards greener, carbon neutral industrial model.Please note that registration closes at 17:00 the day before the event.

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Economics of Oil & Gas Industry - Nigeria - March 2021

29-03-2021
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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Oil and Gas Industry Fundamentals - Awareness - March 2021

29-03-2021
This 2-day Awareness Hybrid Training provides delegates with an overview of principal activities in the international upstream, midstream and downstream petroleum industry.

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Technical guidance publications

Decommissioning within the offshore UK oil and gas industry: a practical guide to worker health protection

2020
The primary focus of this technical publication is to highlight and describe the potential health hazards and risks to workers involved in the decommissioning of offshore oil and gas structures, and explain how these risks are potentially magnified during decommissioning. Health planning, management...

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Guidelines for the integrity management of flare tips and ancillaries

2020
This document has been developed to provide guidance for operators and suppliers for the establishment and maintenance of an integrity management system (IMS) for flare tips and associated ancillaries for offshore and upstream plants. This includes recommendations on controls and procedures necessar...

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HM 86. Guidelines for measurement of crude oil loaded at offshore installations

2020
This document focuses on the loading of ships offshore (i.e. not alongside a berth). This type of operation has become much more common with the development of many floating production storage and offloading (FPSO), floating storage offloading (FSO), and floating storage unit (FSU) facilities.Althou...

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Guidelines for the design and operation of petrol vapour emission controls at distribution terminals

2020
This publication supersedes the Guidelines for the design, installation and operation of petrol vapour emission controls at distribution terminals (4th edition), published October 2014.This publication has been prepared by the Vapour Recovery Working Group of the EI’s Distribution and Marketin...

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Guidelines for the identification and management of environmental barriers

2020
This document supersedes the previous Guidelines for the identification and management of environmentally critical elements, which allowed operators to develop a practical approach to major hazards to the environment. This revised document provides a list of key points to ensure regulatory expectati...

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