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?

Global oil and gas project sanctioning in 2020 set to fall by more than 75%

Global project sanctioning is set for a staggering decline this year of over 75% from 2019 levels, as the COVID-19 epidemic has caused E&P spending to drop much lower than what was expected at the beginning of the crisis, reports Rystad Energy. The market analyst estimates total sanctioning valu...

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Oil and gas drilling set for at least a 20-year low

The COVID-19 pandemic has stymied oil and gas activity, a phenomenon which has now affected the drilling market both in terms of wells drilled and in terms of related demand for drilling equipment. A Rystad Energy analysis shows the number of drilled wells globally is expected to reach around 55,350...

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Transparency on oil and gas sector impacts

A proposed sustainability reporting standard for oil and gas companies identifies climate change as the single biggest challenge facing the sector.A 90-day public comment period has launched for the draft GRI Oil and Gas Sector Standard, with input invited from around the world. The Standard id...

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Argentina’s unveils new subsidy plan for oil and gas

Argentina’s government has unveiled a new plan for subsidising oil and gas production in face of the current COVID-19 sector’s crisis, which has resulted in lower oil refining inputs and placed additional pressure on the sustainability of the country’s natural gas supply.According to Adrian Lara, Se...

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UK offshore oil and gas industry outline plans to cut emissions by half in next decade

The UK’s offshore oil and gas industry has committed to halving operational emissions in the next decade, confirming its pathway to becoming a net zero emissions basin by 2050.A report published by industry body OGUK, The pathway to net zero: Production emissions targets, outlines how targ...

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Events and training

EI LIVE free webinar | Decommissioning In a Nutshell

The Energy Institute and CATCH are pleased to be hosting a technical webinar titled ‘Decommissioning in a nutshell’  

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EI LIVE | Oil and Gas Industry Fundamentals - Awareness - September 2020

This 4-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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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 | Introduction to Liquefied Natural Gas (LNG) - September 2020

This 4-day online 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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EI LIVE | Oil & Gas Mergers & Acquisition: Acquiring & Divesting Assets & Companies - September 2020

This 5-day online training course focuses on integrating an understanding of Mergers & Acquisition (M&A) activity trends, the process involved in conducting M&A activity and and the skills that requires. This includes presentations, case studies, exercises and discussions.

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Technical guidance publications

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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Report 454: Human factors engineering in projects

This publication is free to download for registered users of this siteThe publication was jointly developed by the Energy Institute (EI) and International Association of Oil and Gas Producers (IOGP), and supersedes the first edition of IOGP 454 Human factors engineering in projects.This publication ...

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Guidance on power station closure, decommissioning and handover for demolition or sale

This publication provides guidance on a typical project process to safely and economically prepare a power station for decommissioning and for its handover in a safe state for demolition. The guidance has been developed based on the experience of operators and references other guidance where appropr...

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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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