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?

Reducing emissions with CCS – a role for oil and gas

1-03-2020
The UK’s oil and gas developers have the skills and experience to help deploy CCS at scale. Rebecca Bell looks at how the industry could work to ensure an equitable energy transition.

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Cybersecurity a top focus for upstream oil and gas companies’ digital investments

14-02-2020
Cybersecurity has emerged as the top focus of upstream oil and gas companies’ digital investments, according to a new report from Accenture, which surveyed 255 industry professionals, including C-suite executives, functional leaders and engineers, across the globe.When respondents were asked which d...

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Quantum leap for oil and gas

1-02-2020
ExxonMobil and IBM recently announced a partnership to advance energy sector application of quantum computing. Here, Dr Jeannette M Garcia, Senior Manager, Quantum Algorithms, Applications and Theory, IBM Research, and Dr Bob Parney, IBM Quantum Industry Consultant for Chemicals and Petroleum, IBM G...

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UK-EU oil and gas ties to remain strong post-Brexit

31-01-2020
As the UK leaves the EU, ripple effects will be felt throughout the UK economy. For the oil and gas industry, changes will occur but the impact of Brexit is unlikely to hamper the strong industry ties that currently exist between the UK and the EU, says GlobalData.The UK oil and gas industry relies ...

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Shorter cycle investments to characterise oil and gas industry in 2020

28-01-2020
Oil and gas operators globally will continue to push for faster returns with shorter cycle investments, as the industry moves away from giant developments, according to GlobalData.Anna Belova, Senior Oil & Gas Analyst, comments: ‘Projects now go from final investment decision (FID) to first oil/...

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Events and training

Oil and Gas Industry Fundamentals - Awareness - Middle East - April 2020

8-04-2020
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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Avoidance of Vibration Induced Fatigue Failure in Process Pipework - May 2020

4-05-2020
This 3-day course will provide delegates with an understanding of the use of the Energy Institute Guidelines as a management tool and assessment methodology to manage the risk of a vibration induced failure.

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Oil and Gas Mergers & Acquisition: Acquiring and Divesting Assets and Companies - May 2020

11-05-2020
This 3-day 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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Human Factors Safety Critical Task Analysis Training - May 2020

21-05-2020
A 2-day training course addressing Human Factors issues in COMAH Safety Reports, teaching delegates how to carry out Human Factors Safety Critical Task Reviews.

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Energy investment and innovation - Strategic challenges for an industry in transition

2-06-2020
The UK National Committee of the World Petroleum Council, in partnership with the Energy Institute, is delighted to announce that it will host an Expert Workshop where energy and investment industry experts will address current challenges and will discuss strategic financial solutions that will faci...

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Technical guidance publications

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

2020
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

2020
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

2020
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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French translation - Good practice guideline - The safe management of small service vessels used in the offshore wind industry

2020
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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Guidance on safety integrity level determination for safety instrumented systems in support of IEC 61511

2020
Most process plants are controlled by complex process control systems; there is increasing dependence on safety instrumented systems (SISs) to carry out safety instrumented functions (SIFs).This technical publication focuses on quantitative and semi quantitative safety integrity level (SIL) determin...

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