Oil and gas extraction supplies nearly 60% of the world’s primary energy and is essential for major sectors such as transportation and petrochemicals. However, locating new reserves is becoming increasingly difficult and environmental pressures add complexity to exploration and production.
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As traditional fields decline, operators are increasingly moving into more remote and technically complex areas. At the same time, safety challenges and climate-related risks continue to grow, adding further uncertainty. Addressing these issues is essential to maintaining energy security, reducing environmental impact, responding to public concerns, and ensuring long-term viability and safe operations.
Geological and Exploration Challenges
As mature oil and gas fields decline, exploration is moving toward deeper and more geologically complex areas. Finding economically viable reserves is becoming increasingly challenging and depends more heavily on advanced tools such as seismic imaging, basin modeling, and reservoir characterization.1 Yet, even with these tools, reserve estimates are often uncertain until production data is available. This problem is particularly severe in ultra-deep, low-porosity fractured reservoirs, with few core samples and unclear logging data, making evaluations challenging.
In these cases, new data-driven methods can help assess redevelopment potential by linking limited geological and production data. These approaches use probability-based models to reduce uncertainty in forecasting reserves. Still, as drilling moves into new tectonic areas, predicting structural traps becomes harder, and the economic risks rise. Therefore, subsurface complexity and limited data continue to challenge early exploration and investment decisions, highlighting the need for improved geoscientific modeling and risk mitigation strategies.
Technical and Operational Challenges
Extracting hydrocarbons from deepwater (>1500 m), ultra-deep, or Arctic reservoirs presents major technical challenges.
Drilling systems must withstand high pressure, low temperatures, and corrosive fluids, which require the use of durable materials and technologies, such as high-temperature drilling fluids, anti-corrosion alloys, and automated rig systems.2 Harsh marine and polar environments also complicate logistics, maintenance, and safety.
In older reservoirs, enhanced oil recovery (EOR) methods, such as carbon dioxide (CO₂) flooding, alkaline–surfactant–polymer (ASP) injection, and nanoparticle-assisted techniques, have shown potential for increasing output.3 However, applying EOR introduces its own risks, including chemical compatibility issues, formation damage, and scale buildup.
These risks become more significant as reservoir conditions grow more complex. EOR is often the only practical way to maintain production in many mature fields, but its success depends on accurate reservoir characterization and continuous monitoring.
Overall, as the industry moves toward unconventional, aging, and environmentally sensitive sites, technical and operational demands steadily increase.
Environmental and Sustainability Challenges of Oil and Gas Extraction
Oil and gas operations pose significant environmental risks.
The Deepwater Horizon spill in 2010, which released approximately 4.9 million barrels of oil, remains a stark reminder of the hazards associated with offshore drilling and their long-term ecological consequences.4
Beyond large-scale disasters, persistent and smaller-scale issues continue to raise concerns. Methane emissions, particularly from diffuse, low-volume sources across the supply chain, are often underreported in official inventories.5, 6 These underestimated leaks contribute disproportionately to global warming due to methane’s high radiative forcing.
Abandoned wells present an additional threat, as many are improperly sealed and continue to emit methane for decades.7 Water-intensive extraction techniques, such as hydraulic fracturing, also carry the risk of aquifer contamination and geological destabilization if not rigorously managed.3
Furthermore, ecosystem disruption from land clearing, noise, and flaring can impact biodiversity and nearby communities. As environmental scrutiny intensifies, responsible extraction demands improved spill prevention, methane control, and water management.
Economic and Market Challenges
Oil and gas economics remain highly susceptible to price volatility influenced by geopolitical tensions, production decisions by the Organization of the Petroleum Exporting Countries (OPEC), and shifts in global energy demand.
Such fluctuations can jeopardize the financial feasibility of long-term capital-intensive projects, especially those targeting technically complex or remote reserves. High upfront costs for drilling infrastructure, subsea systems, and environmental compliance further strain budgets.2
Operating expenses increase significantly in harsh environments due to accelerated equipment wear, logistical challenges, and heightened safety requirements.3 The expanding role of renewable energy, bolstered by international decarbonization efforts, also exerts sustained downward pressure on oil and gas prices.
Collectively, these factors underscore the need for more adaptive financial strategies and operational agility to ensure project viability in a rapidly evolving energy landscape defined by diversification and sustainability goals.
Regulatory and Political Challenges
Stricter environmental regulations globally now mandate tighter control over emissions, water use, and waste management. This leads to higher compliance costs and potential delays.
Operators must navigate overlapping local, national, and international standards, especially in sensitive habitats and offshore zones. Political instability in key producing regions, including parts of the Middle East, Africa, and Latin America, creates supply risks and operational disruptions.
Policy uncertainty, such as fluctuating royalties, taxes, and licensing terms, introduces unpredictability in fiscal planning.
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Regulatory cycles often mirror political agendas, leading to inconsistent enforcement and shifting project approvals. These uncertainties complicate feasibility studies and financial modeling.
In many regions, bureaucratic red tape further delays permitting and construction. As investor expectations increasingly demand transparency and climate-aligned governance, oil and gas companies face mounting pressure to operate under evolving legal frameworks that favor environmental protection and social accountability, requiring proactive legal strategies and stakeholder coordination. 8
Social and Community Challenges
Oil and gas projects often face local resistance due to concerns over pollution, health risks, and disruption of traditional livelihoods. Incidents of water contamination, air pollution, or land degradation can erode public trust, leading to legal challenges and protests.4 Workers in remote or offshore facilities also face occupational hazards, including exposure to toxic substances and extreme physical conditions.
Ensuring safety compliance and providing adequate health infrastructure is critical. Transparent engagement with communities through consultations, environmental monitoring, and benefit-sharing agreements is essential for building social license to operate. Long-term success requires addressing local needs while upholding human rights and minimizing harm.
Technological Innovation Needs
Meeting these complex challenges demands continuous innovation. Automated drilling systems and real-time downhole sensing are enhancing efficiency and reducing human exposure in hazardous zones.
Digitalization tools, such as automated monitoring, predictive maintenance, and drone inspections, support safer, more cost-effective operations.9
In tandem, carbon capture and storage (CCS) technologies, particularly when coupled with CO₂-EOR, offer a pathway to reduce net emissions if supplied from sustainable sources. Technological breakthroughs must integrate with evolving regulatory frameworks and sustainability goals.
Balancing profitability with environmental and social responsibilities requires cross-sector collaboration and sustained investment for research, ensuring the oil and gas industry remains viable in a rapidly transforming energy landscape.
References and Further Reading
- He, D., et al. (2023). Research progress and key issues of ultra‑deep oil and gas exploration in China. Petroleum Exploration and Development, 50(6), 1333–1344. DOI: 10.1016/S1876-3804(24)60470-2
https://www.sciencedirect.com/science/article/pii/S1876610223000032
- Wang, H., et al. (2023). Progress and challenges of drilling and completion technologies for deep, ultra-deep and horizontal wells of CNPC. China Petroleum Exploration, 28(3), 1–11. DOI: 10.3969/j.issn.1672-7703.2023.03.001
http://www.cped.cn/EN/10.3969/j.issn.1672-7703.2023.03.001
- Zhang et al. (2024). A review of reservoir damage during hydraulic fracturing of deep and ultra-deep reservoirs. Petroleum Science, 21(1), 384–409. DOI: 10.1016/j.petsci.2023.11.017 https://www.sciencedirect.com/science/article/pii/S1995822623003242
- Henkel, J. R., Sigel, B. J., & Taylor, C. M. (2012). Large-scale impacts of the Deepwater Horizon oil spill: Can local disturbance affect distant ecosystems through migratory shorebirds? BioScience, 62(7), 676–685. DOI:10.1525/bio.2012.62.7.10
https://academic.oup.com/bioscience/article/62/7/676/259299
- Omara, M., et al. (2024). Constructing a measurement-based spatially explicit inventory of US oil and gas methane emissions. Earth System Science Data, 16, 3973–3990. DOI: 10.5194/essd-16-3973-2024 https://essd.copernicus.org/articles/16/3973/2024/
- Williams, A., et al. (2025). Small emission sources in aggregate disproportionately account for a large majority of total methane emissions from the US oil and gas sector. Atmospheric Chemistry and Physics, 25, 1513–1529.
DOI: 10.5194/acp-25-1513-2025
https://acp.copernicus.org/articles/25/1513/2025/
- Zhang, K et al. (2024). Reservoir damage mechanisms and mitigation measures during hydraulic fracturing in deep and ultra-deep formations: A review. Energy Geoscience, 5(4), 100288. DOI: 10.1016/j.engeos.2024.100288 https://www.sciencedirect.com/science/article/pii/S2666759224000039
- Shams, S., et al. (2023). An Assessment of Environmental Impact on Offshore Decommissioning of Oil and Gas Pipelines.
Environments, 10(6), 104. DOI: 10.3390/environments10060104
https://www.mdpi.com/2076-3298/10/6/104
- Liang, B., et al. (2024). Carbon capture, utilization and storage (CCUS) in oil and gas reservoirs in China: status, opportunities and challenges. Fuel, 375, 132353. DOI: 10.1016/j.fuel.2024.132353 https://www.sciencedirect.com/science/article/abs/pii/S0016236124015011
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