Through much of this century, the petroleum industry has been heavily involved in foreign direct investment (FDI) in its continuous search for significant reserves of oil and gas. In many ways it has therefore been the leader of the industrial phenomenon of FDI that has swept the world since the 1980s. This relatively recent growth in global FDI has been fueled both by the needs for corporate growth and new market creation by all industrial companies. It has also been the result of significant changes in the national economic strategies, particularly those nations in the developing world and those that formerly had centrally planned economies.

The involvement of the petroleum industry in FDI has been both in the upstream (exploration and production) and in the downstream (refining and marketing). Historically, because of the scale of the required investment, this involvement was largely restricted to the large multinational companies. During the decade of the 1990s, however, several factors encouraged the change in the mix of petroleum investors. It opened the door to independent exploration and production companies, as well as expansion into the international arena by a number of national oil companies. The most prominent of these changes has been in economic and investment policies governing FDI as a means of obtaining a greater share of the benefits from these investments on the part of the governments. In particular, this has been reflected in the general easing of model contract terms for exploration and production and the opening of the midstream and downstream natural gas industry to foreign participation.