Petroleum is a mixture of combustible liquid hydrocarbons. Natural oils generated underground and stored in various pores and fissures of rocks are called crude oils, whereas the combustible liquid hydrocarbons refined from coal and oil shale are called synthetic oils. Natural gas generated in the crust includes H2, CO2, H2S, He and various hydrocarbon gases. The commonly used term "natural gas" just refers to this kind of widely-distributed combustible hydrocarbon gases.     

Oil and gas, which are unrenewable resources, are the major energy resources and important raw materials for chemical industry in today's world. Natural gas, as a high-quality fuel, is widely used in power generation, communications, the chemical industry as well as people's daily life. It is undoubtedly a great waste of resources to use petroleum directly as a fuel, because only by refining it into various products through further processing can we make full use of its latent energy and obtain the best economic benefit.

The following major categories of petroleum products can be obtained through refining the crude oils:

various brands of high-quality fuels, e.g., gasoline, kerosene and diesel, which are the "food " for mechanical engines used in the industry, agriculture, transportation and military fields;

lubricating oil and grease, which are lubricants and antirust agents for various machinery and instruments;

paraffin, widely used in lighting, coating, sealing, damp proof and mould-making, also in production of synthetic rubber and detergent etc.;

vaseline, asphalt and petroleum coke, the former of which is used in medicine and cosmetics, the latter in road-paving and construction;

residual oil left over by fracturing of petroleum, i.e. fueling oil, which is used as fuel for boilers.

Petrochemical products using oil and gas as raw materials are varied, including synthetic fiber, synthetic rubber, plastics, chemical fertilizers, pesticides, dynamite, cosmetics, synthetic detergent etc. Natural gases can also be used to produce synthetic ammonia, ethine, methanol, hydrocyanic acid, liquid hydrocarbons, methane chloride, carbon bisulfide, carbon black etc.

As early as thousands of years ago, oil and gas were already discovered and used by people. In the Qin and Han Dynasties some 2,000 years ago, natural gas was used for boiling brine water to extract salt in Sichuan, and oil was found in northern Shaanxi. Later, petroleum was used for lighting, medicine, lubrication, fuel and military battles.

China's modern petroleum industry started with the drilling of the first oil well in the Miaoli area, Taiwan, China in 1878. In 1907, an oil well was drilled for the first time in the mainland in northern Shaanxi. In the following 71 years up to 1949, a total of 12 oil-gas fields were developed in Taiwan, Shaanxi, Gansu, Sichuan, Xinjiang et al., with accumulated explored petroleum reserves of 29 million tons, producing 671,700 tons of crude oil and 11,700 million cubic meters of natural gas. Besides, the other 9 oil shale refinery plants yielded 2.324 million tons of synthetic oil. In 1949, the whole country produced 70,000 tons of crude oil, 50,000 tons of synthetic oil and 7 million cubic meters of natural gas.

Since 1949 extensive prospecting for oil and gas has been carried out throughout the country. Up to 1997 a total of 657 oil and gasfields (among which 155 are pure gasfields) had been found, with the accumulative geological reserves being 19 billion tons for oil and 1697.7 billion cubic meters for natural gas. A number of petroleum bases, e.g. the Daqing Oilfield, have successively been built. In 1963, the annual crude oil production was 6.48 million tons, basically sufficient for the domestic demand. In 1978 the output broke through 100 million tons for the first time, putting China in the ranks of the world's major oil-producing countries. In 1998, China produced 160 million tons of oil and 22.3 billion cubic meters of gas.

Petroleum and its products have long been widely used in various fields of people's social activity, almost everywhere. In the 20th century, as a result of the far-reaching influence of petroleum in the global economy any major fluctuation in the price of petroleum will stimulate economic growth or promote inflation and cause recession. Petroleum, as a kind of commodity, is closely linked with the national strategy, global politics and strength, causing various forms of competition or fight for petroleum. The Middle East War in 1973 and the Gulf War in 1991 are essentially wars for petroleum. The 20th century is thus described by some people as "a century of petroleum". It will continue to occupy an important position in the 21st century.

Along with the economic development and awareness of environmental protection, people have come to recognize the value of natural gas as a clean fuel with great abundance. It is gradually replacing oil in many fields, its proportion in the production and consumption of energy resources has been increasing, and so is the social demand for it. Therefore, some people foretell that the 21st century will be "an age of natural gas".