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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?

Events and training

Supply and distribution: organisation, operations and economics - September 2019

2-09-2019
This 3-day training course is designed for those who are or will be operating in the Supply & Distribution functions and will provide the background knowledge to allow them to take the right decisions on how to supply the network at the right cost. 

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NEBOSH International Technical Certificate in Oil and Gas Operational Safety

9-09-2019
This NEBOSH International Technical Certificate in Oil & Gas Operational Safety training will provide students with an industry recognised qualification for individuals with safety responsibilities in the oil and gas industry. The course is available as a 5-day classroom course, E-Learning and I...

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In conversation with Lord Browne FREng HonFEI

17-09-2019
Attend to discuss and purchase a signed copy of Lord Browne FREng HonFEI's new book - Make, Think, Imagine: Engineering the Future of Civilisation

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Providing expert insight into LOGIC’S latest contracts and highlighting the legal and practical risk

18-09-2019
In November 2018, Oil & Gas UK subsidiary LOGIC published the 3rd edition of their General Conditions of Contract for Construction.  In December 2018, a new standard contract to assist companies with offshore decommissioning in the UK North Sea was published followed by the 4th Edition of L...

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IEA's World Energy Investment Report 2019

19-09-2019
The International Energy Agency’s annual benchmark for tracking energy investment, World Energy Investment 2019 provides a full picture of today’s capital flows and what they might mean for tomorrow’s energy sector It assesses whether the frameworks and strategi...

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Technical guidance publications

HM 54. Guidelines for the management of measurement for the upstream oil and gas industry

2019
More companies are electing to employ third parties to manage their legal and commercial measurement obligations and to undertake allocation of individual fields from commingled streams. Therefore the issue of management of measurement is becoming increasingly more important.This second edition high...

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HM 78. Guidelines for meter selection for the upstream oil and gas industry

2019
This publication has been produced as a high-level guideline on meter selection by those involved in the upstream oil and gas industry. The selection of the correct meter or primary element along with the appropriate secondary instrumentation is fundamental to the performance and/or reliability of a...

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HM 60. Guidelines for the auditing of measurement systems for oil and gas streams

2019
This publication has been produced as a high level guideline on auditing for use by all of those involved in the measurement process in the upstream oil and gas industry.Measurement system auditing is a critical activity for all operators producing hydrocarbons to ensure financial interests are prot...

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Guidance for corrosion management in oil and gas production and processing

2019
*This publication has a large file size, please allow extra time for the PDF to download*This second edition of the EI's Guidance on corrosion management in oil and gas production and processing provides general principles and essential engineering guidance and requirements for improving corrosion m...

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Guidance on managing process safety in decommissioning projects

2019
This publication is intended to provide guidance on managing process safety within decommissioning projects generally within the energy sector, with more specific guidance and information provided, where possible, in the following industry sectors:offshore oil and gas;onshore oil and gas and petroch...

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