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 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?

Impact of Myanmar coup on oil and gas

New upstream projects worth $2bn up until 2030 that are yet to take final investment decision (FID), including the A6 project, now risk further delay following the military coup in Myanmar at the start of February, according to Wood Mackenzie Research Associate Saloni Kapoor.‘Key developments such a...

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Ireland looking to ban future oil and gas E&P

Ireland has become the latest country to announce it is seeking to ban future oil and gas exploration and production, although existing licences issued will be honoured under the plans proposed by the Irish Cabinet.  If successful, Ireland will join the likes of Denmark, New Zealand and Fr...

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Oil and gas industry needs to ‘reimagine’ its business and models to maximise energy transition opportunities

Enhancing a collaborative culture within the offshore oil and gas industry is not only key to maximising the potential of its existing world class supply chain but could also unlock future activity in the UK Continental Shelf (UKCS) and be key to delivering a successful net zero future. Furthermore,...

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Oil and gas industry boosts transformational green investments

New research published by DNV GL finds that the oil and gas industry expects to boost investment in the energy systems of the future this year, as companies seek to transform for the long term.  A record two-thirds (66%) of senior oil and gas professionals report that their organisation is...

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IEA calls on companies, governments and regulators to take urgent action to cut methane emissions from oil and gas sector

Methane emissions from the global oil and gas industry fell by an estimated 10% in 2020 as producers slashed output in response to the COVID-19 crisis, according to the International Energy Agency (IEA), which also warns that these emissions could rebound strongly without greater action by companies...

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Events and training

EI Live free webinar | Resilience out of crisis: the role of HSE in building a sustainable recovery

Please note that registration closes at 17:00 GMT on 15 March 2021.In conversation with H.E. Shaikh Mohamed bin Khalifa Al Khalifa, Minister of Oil, Kingdom of Bahrain. COVID-19 and the low oil price have forced organisations to rapidly adapt their operations, all while sustaining the industry&rsquo...

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EI Live free webinar | Fostering a sustainable energy future post COVID-19

Please note that registration closes at 17:00 GMT on 16 March 2021.In conversation with H.E. Dr. Abdul Hussain Bin Ali Mirza, President of the Sustainable Energy Authority, Bahrain.In 2021 governments will meet for COP26 in the backdrop of a world profoundly changed by the impact of COVID-19.How can...

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EI LIVE | Energy Storage Fundamentals for Energy Security - May 2021

<p> This 2-day virtual blended training course will allow you to gain a comprehensive understanding of energy security awareness and learn how to achieve energy security at national and power generator levels. It provides knowledge of energy storage systems as we transition to low carbon ...

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EI LIVE | Introduction to LNG - May 2021

This 4-day training course provides an introduction to the LNG chain. Suitable for students who are new to the LNG sector and/or those with a non-technical background.

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Technical guidance publications

Guidelines for in-service management of passive fire protection coating systems

This document provides guidance on in-service management of passive fire protection coatings that have been applied to components such as fire barriers, key structural elements and items of process equipment to provide a predetermined level of protection from a given fire and/or explosion event.Guid...

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EI Research Report: Determination of recalibration intervals for fiscal metering measurements (HM 1803)

This report provides an overview of the four currently identified methodologies for determining calibration intervals:− Calendar-based− Condition-based− Performance-based− Risk-basedFor each method, the procedure for implementing the methodology is described, the advantages a...

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Guidance on managing obsolescence and upgrading industrial automation and control systems (IACS)

This publication provides information and guidance on the factors that should be considered in the successful management of obsolescence of an IACS, by providing a practical approach and suggested courses of action. Each and every IACS is different as a result of its unique use, and varies depending...

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Decommissioning within the offshore UK oil and gas industry: a practical guide to worker health protection

The primary focus of this technical publication is to highlight and describe the potential health hazards and risks to workers involved in the decommissioning of offshore oil and gas structures, and explain how these risks are potentially magnified during decommissioning. Health planning, management...

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Guidelines for the integrity management of flare tips and ancillaries

This document has been developed to provide guidance for operators and suppliers for the establishment and maintenance of an integrity management system (IMS) for flare tips and associated ancillaries for offshore and upstream plants. This includes recommendations on controls and procedures necessar...

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