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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?

New chapter in Somalia’s oil and gas sector with passing of Petroleum Law

Somalia’s Ministry of Petroleum and Mineral Resources reports that the Petroleum Law of Somalia has completed its passage through the Parliament of the Federal Republic of Somalia. The Law ensures that any oil discovered is the sole property of the Somali people and aims to ensure the long-term deve...

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Energy Insight: North Sea oil and gas and the price of oil

“More than 42.3 billion barrels oil equivalent (bboe) have been produced from the UKCS [United Kingdom Continental Shelf] and 10-20 bboe are estimated to remain. Despite the low levels of exploration activity in recent years, encouraging discoveries have recently been made in the West of Shetland an...

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Oil and Gas Authority launches massive public data release

The Oil and Gas Authority (OGA) has unveiled what is believed to be one of the largest ever single open releases of data with the launch of the nation’s first UK oil and gas national data repository (NDR).Freely-available to all, the NDR is an online platform which is home to 130 terabytes of well, ...

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New reality could unlock £200bn of future business opportunities for UK oil and gas

A sustained focus on cost and efficiencies with ongoing uncertainty in commodity markets marks the new reality for the UK’s offshore oil and gas sector, according to Oil and Gas UK’s (OGUK) Business Outlook 2019. The report into industry performance finds continued uncertainty in commodity markets i...

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International Petroleum Week 2019: Defining the future for the oil and gas industry

Welcome to the International Petroleum (IP) Week 2019 review, which highlights the key issues, messages and takeaways from IP Week 2019. This year’s conference was held on 26–28 February, and addressed the theme ‘Defining the future for the oil and gas industry’.Delegates heard from an impressive in...

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Events and training

YPN FutureTech: Power to the People

Join the debate and discover how technology is shaping the energy transition.

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The Future of Scotland's Energy Policy

Scotland’s energy policy is changing to reflect the different demands of Maximising Economic Recovery (MER) and the decarbonisation goals presented by the Paris Agreement.

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NEBOSH International Technical Certificate in Oil and Gas Operational Safety

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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Introduction to Oil & Gas Industry- September 2019

This 2-day course provides an introduction to the oil & gas industry. Delegates will learn about the key sectors of the oil and gas industry from exploration through to fuel retailing. The course comprehensively covers all aspects of the industry value chain including formation of oil & gas,...

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Asset Management

Approaches to upstream asset major accident hazard management with learnings from inside and outside of the oil and gas industry.

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Technical guidance publications

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

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

*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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Human and organisational factors in end of service life and decommissioning

This document is freely available to all registered users of this site.Health, safety, wellbeing and performance of those working on sites, both on and offshore, undergoing decommissioning can be adversely affected by changes in the nature of the tasks performed and the conditions under which they a...

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Guidance on assigning ignition probabilities in onshore and offshore quantitative risk assessments

The probability of ignition of flammable releases from onshore and offshore installations is a key factor in determining the risks such installations present to people, assets and the environment, yet data and practical models available to enable assessors to assign suitable ignition probability dis...

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Model Code of Safe Practice Part 2: Guidance on the design, construction and operation of petroleum distribution installations

EI Model Code of Safe Practice Part 2: Guidance on the design, construction and operation of petroleum distribution installations has been developed to provide guidance and good practice in the layout, design and construction of distribution installations and their equipment. It also provides certai...

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