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?

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

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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Over $85bn of 2020 forecast expenditure erased from oil and gas sector

To protect balance sheets, maintain shareholder pay-outs and preserve cash, oil and gas companies have gone into survival mode, reducing forecast expenditure where possible to weather the impacts of COVID-19 and oil market volatility, reports GlobalData. According to its latest analysis, over $85bn ...

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Norway unveils ‘extremely rare’ tax proposals for its oil and gas sector

The Norwegian Ministry of Finance has announced proposed changes to Norway’s tax regime with a view to boosting cash flow and encouraging continued investment in the Norwegian oil and gas sector. The proposals would apply for the next two years to E&P companies with activities in Norway. Th...

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Up to 30,000 oil and gas jobs could be lost thanks to coronavirus

Oil and Gas UK (OGUK) has published a report predicting a huge number of jobs will be lost over the next 12 to 18 months. Drilling activity this year could halve compared to last year pushing activity levels to record lows and capital investment in infrastructure is expected to fall to the lowe...

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Falling oil and gas prices and COVID-19 impact Australia’s LNG sector

Australia began to develop its LNG sector a little over a decade ago and quickly became one of the world’s largest exporters of the commodity. However, the fall in oil and gas prices, weak economic outlook, lowering LNG demand and supply glut have hit hard on the country’s LNG sector, reports Global...

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Events and training

EI LIVE free webinar | Energy investment & innovation

Energy investment & innovation - strategic challenges for an industry in transition - 2 June 2020, 12 - 1.45pm (BST) This free online webinar is organised by the UK Committee of the World Petroleum Council in association with the Energy Institute. The outbreak of the coronavirus COVID-19 has qui...

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EI LIVE | Economics of the Oil and Gas Industry

A 4-day online introduction to the economics of the oil and gas industry. This course is suitable for students who are new to the oil and gas industry.

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Oil and Gas Industry Fundamentals - Awareness - Middle East

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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Conducting Incident Investigations & Analyses using the Tripod Beta methodology - September 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 | Oil and Gas Industry Fundamentals - Awareness - September 2020

This 2-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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Technical guidance publications

EI Research report: Measures and key performance indicators to manage maintenance in upstream petroleum production

This research report details the findings and recommendations of a research project into maintenance performance measures for the upstream oil and gas industry. The aim of the research was to explore the practicalities of reporting maintenance management measures.The industry scope was upstream petr...

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Guidelines for the management of safety critical elements

The purpose of this technical publication is to provide industry guidance for the management of safety critical elements (SCEs) throughout the life cycle of a facility from conceptual design, through the operate phase, to changes such as life extension and decommissioning. An SCE is any part of a fa...

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Guidance on human factors safety critical task analysis

This publication is free to download, please log in to see the download option.The first edition of Guidance on human factors safety critical task analysis filled a gap by enabling companies and human factors (HF) non-specialists to conduct quality HF analyses in a structured and consistent format. ...

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

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

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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