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?

Argentina’s unveils new subsidy plan for oil and gas

29-06-2020
Argentina’s government has unveiled a new plan for subsidising oil and gas production in face of the current COVID-19 sector’s crisis, which has resulted in lower oil refining inputs and placed additional pressure on the sustainability of the country’s natural gas supply.According to Adrian Lara, Se...

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UK offshore oil and gas industry outline plans to cut emissions by half in next decade

16-06-2020
The UK’s offshore oil and gas industry has committed to halving operational emissions in the next decade, confirming its pathway to becoming a net zero emissions basin by 2050.A report published by industry body OGUK, The pathway to net zero: Production emissions targets, outlines how targ...

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Offshore wind expenditure set to match upstream oil and gas in Europe in 2021

5-06-2020
The oil market collapse caused by the COVID-19 pandemic is set to delay several oil and gas developments in Western Europe, putting capital expenditure (capex) in the offshore sector on a continued downwards trajectory through 2022, reports Rystad Energy.In light of the postponement of multiple fina...

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Oil and gas assets up for grabs

2-06-2020
Oil and gas companies currently have assets for sale with recoverable reserves of more than 5bn barrels of liquids and 7.5bn boe of natural gas, Rystad Energy estimates.  While some of these planned divestments were announced before the COVID-19-related oil price crash, more were added in react...

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Hydrogen central to oil and gas industry decarbonisation as expectations for market growth surge

13-05-2020
A new report reveals that hydrogen has surged up the priority list of many oil and gas organisations, taking a primary position in the sector’s decarbonisation efforts. A fifth (21%) of senior oil and gas industry professionals surveyed say their organisation is already actively entering the hy...

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Events and training

EI LIVE free webinar | Tightening the belt: operational resilience during a challenging energy era

15-07-2020
in co-operation with EI Knowledge Partner Join this free webinar on 15 July 2020, 2.30-3.30pm BST (UK time)

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Oil and Gas Industry Fundamentals - Awareness - Middle East

7-09-2020
This 2-day training course provides delegates with an overview of principal activities inthe international upstream, midstream and downstream petroleum industry.

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EI LIVE | Oil and Gas Industry Fundamentals - Awareness - September 2020

7-09-2020
This 4-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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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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EI LIVE | Introduction to Liquefied Natural Gas (LNG) - September 2020

14-09-2020
This 4-day online training course provides an introduction to the LNG chain. Suitable for students who are new to the LNG sector and/or those with a non-technical background.

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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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Report 454: Human factors engineering in projects

2020
This publication is free to download for registered users of this siteThe publication was jointly developed by the Energy Institute (EI) and International Association of Oil and Gas Producers (IOGP), and supersedes the first edition of IOGP 454 Human factors engineering in projects.This publication ...

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Guidance on power station closure, decommissioning and handover for demolition or sale

2020
This publication provides guidance on a typical project process to safely and economically prepare a power station for decommissioning and for its handover in a safe state for demolition. The guidance has been developed based on the experience of operators and references other guidance where appropr...

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EI Research report: Investigation into the ignition risks due to the ageing effects of Ex electrical equipment

2020
The presence of ageing explosion-protected (Ex) electrical equipment in hazardous areas related to potentially explosive atmospheres, onshore and offshore, causes serious concern for those responsible for its operation and maintenance. This publication illustrates and highlights four main modes of d...

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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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