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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 our Energy Insights.

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

Explore our dedicated collections on Aviation Fuel, Future of Gas, Road Fuels, Shale Gas and Working Offshore.

What's new?

Thailand signs first long-term US LNG deal

03/08/2022
The sale and purchase agreement (SPA) calls for a combination of free-onboard (FOB) and delivered ex-ship (DES) deliveries,* a customised structure re...

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World’s first unmanned marine station

03/08/2022
The new unmanned mobile facility design is patent-pending and compliant with the same strict environmental and safety standards as a modern unmanned s...

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Biden’s $739bn climate deal set to deliver the biggest climate investment in US history

03/08/2022
Biden hailed the congressional deal as the biggest single climate investment in US history. The deal promises to raise taxes on high earners and corpo...

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Norway leads the way with emissions intensity and electrification projects

13/07/2022
Troll A was the first platform on the Norwegian Continental Shelf (NCS) to utilise power from shore, back in 1996, and the region has continued with a...

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UK’s biggest ever renewables auction secures record amount of low carbon energy

13/07/2022
Nearly double the capacity achieved in the previous round, the energy was secured across a range of clean technologies, including offshore wind, solar...

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Events and training

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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EI LIVE | Human Factors Safety Critical Task Analysis - Sep 2022

12/09/2022
A 5-day training course on Human Factors Safety Critical Task Analysis (SCTA). Delegates will be able to facilitate SCTA sessions of their own and kno...

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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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Human Factors Foundation - October 2022

17/10/2022
This 5-day virtual learning course delivers a comprehensive introduction into human factors for non-specialists. It provides a practical, engaging and...

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EI LIVE Oil and Gas Mergers & Acquisition: Acquiring and Divesting Assets and Companies

24/10/2022
This 3-day virtual online training course focuses on integrating an understanding of Mergers & Acquisition (M&A) activity trends, the pro...

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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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Guidelines for the assessment of ageing and life extension of non-metallic components in the offshore oil and gas industry, volume 2: composite equipment and repairs

2022
This document captures industry good practice, knowledge and learning on these elements of composite materials. This guidance will provide a star...

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Research report: Application of life cycle assessment methodology to the understanding of the energy balance and efficiency of hydrogen value chain building blocks

2022
This document is free to download for registered users.This publication explores the efficiencies of the hydrogen energy system and quantifies the ene...

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Guidance on cost-benefit analysis for asset integrity: Cost-benefit analysis for repair and rectification of identified inspection anomalies

2022
This document provides guidance for utilising cost-benefit analysis when determining the most cost-effective course of action to repair or rectify pre...

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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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