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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?

US approves Willow oil project in Alaska

22/03/2023
The size of the proposed $7bn Willow development in the National Petroleum Reserve-Alaska (NPR-A) has been substantially reduced by 40% with two of th...

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European Commission proposes EU electricity market reform

22/03/2023
The EU has had an efficient, well-integrated electricity market for over 20 years, allowing consumers to reap the economic benefits of a single energy...

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UK North Sea flaring halved in just four years

15/03/2023
North Sea offshore gas flaring fell by 13% in 2022 to 22bn cf of gas, contributing to a total decrease of 50% since 2018, when volumes totalled 44bn c...

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Decarbonised power system by 2035 ‘not possible’ at current pace of delivery

15/03/2023
A decarbonised power system is the ‘central requirement’ for achieving net zero in the UK and the prize for all modern economies, according to the lat...

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Report calls for urgent industry decarbonisation ramp up

15/03/2023
The production of steel, aluminium, petrochemicals and cement is due to increase in developing economies and stay flat, or only slightly decline, in m...

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Events and training

EI LIVE | Human Factors Safety Critical Task Analysis - March 2023

27/03/2023
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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Economics of the Oil and Gas Industry - Nigeria

16/04/2023
ECONOMICS OF OIL & GAS INDUSTRY TRAINING

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Human Factors Foundation - April 2023

17/04/2023
This 5-day course delivers a comprehensive introduction into human factors for non-specialists. It provides a practical, engaging and interactive back...

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Conducting Incident Investigations & Analyses using the Tripod Beta methodology - May 2023

23/05/2023
A 3-day training course providing both a theoretical and practical overview of the Tripod Beta methodology, enabling delegates to support and conduct ...

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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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Best available techniques (BAT): Good practice for the oil and gas industry

2022
This guidance has been produced to inform good practice when undertaking best available techniques (BAT) assessments for offshore combustion equipment...

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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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