Basic Information about Oil and Gas

Outline
What is Petroleum?
How is oil formed?
What is Oil used for?
Oil Composition
Oil Properties

What is Petroleum?
Petroleum: a complex mixture of naturally occurring hydrocarbon compounds found in rock.
Petroleum Latin word (“Petra” means rocks, “oleum” means oil)
Solid, gas or liquid
Petroleum generally refers to liquid crude oil
Crude Oil: A general term for unrefined petroleum or liquid petroleum.

How is Oil formed?
Oil was formed from the remains of animals and plants that lived millions of years ago in a marine (water) environment.
Over the years, the remains were covered by layers of mud.
Heat and pressure from these layers helped the remains turn into what we today call crude oil.

How is Oil formed?

What is Oil used for?
90% of all transportation fuels
Lipstick
Aspirin
Artificial Heart
Shampoo

Oil Composition
Hydrocarbons – 98%
Alkanes
Cycloalkanes
Aromatic HCs
Non-hydrocarbon components < 1%
sulphur, nitrogen, oxygen and heavy metals (Vanadium, Nickel, Copper, Zinc and Iron)
but their influence on the product quality can be considerable

Hydrocarbon Chemistry
Classification:
Arrangement of the carbon molecules
Open Chain
Cyclic
Number of Bonds between carbon molecules:
Saturated (Alkanes)
Unsaturated (Alkenes, Alkynes)

Alkanes
Under Standard Conditions (Temperature 298K and Pressure 1 atm)
C1 – C4 are gases
C5 – C17 are liquids
>C17 are solids

Alkanes

Alkanes
At reservoir - Long chain of HCs may exist in solution
At tubing and surface facilities - Long chain of HCs may solidify
The detailed laboratory analysis of the crude oil composition is required
Cyclic HCs are common in crude oil

Aromatic Hydrocarbons (Arenes)
Carbon atoms are connected by alternating double and single bonds
Benzene

Non-Hydrocarbon Components of Petroleum Fluids
Typically < 1%
Significant Impact on Product Quality and Processing Requirement

Sulphur - 0,2 % to 6% (average 0,65 %)
Highly Corrosive and Toxic
Corrosive: Free Sulphur, Hydrogen Sulphide (H2S), and other carbon compounds with Suphur.
Natural Gases – H2S
Non-Hydrocarbon Components of Petroleum Fluids

Nitrogen <0,2%, high as 2%
Reduces Caloric Value
Oxygen can produce corrosive compounds
Carbon Dioxide + Water = Carbonic Acid
Metals: Vanadium, Nickel, Copper, Zinc and Iron.
Non-Hydrocarbon Components of Petroleum Fluids

Oil Properties
Crude oil properties can vary widely depending on where the oil is found and under what conditions it was formed
The properties of oil include its density, called the API gravity (named after the American Petroleum Institute)

Specific Gravity of a Liquid
The specific gravity of a liquid is the ratio of its density to that of water

API gravity
the lower its density, the higher its API gravity

Light and Heavy Oil
Crude oil can be classified as either light or heavy depending on its API gravity (or density).
Heavy: 10–20° API gravity- quality of oil less
Light: above 25° API gravity- quality higher

Sour and Sweet Oil
Crude oil can also be classified as either sour or sweet, depending on the amount of sulphur it contains.
Oil with a high sulphur content (0.5% and above, by weight) is considered sour.
Sweet crude oil, on the other hand, has low amounts of these sulphur compounds.

Onshore and Offshore field
Onshore field: fields on dry land (Tengiz Oil Field)
Offshore field: fields in the middle of sea (Kashagan Field)
Offshore drilling
Onshore drilling

The life of an oil or gas field can sub-divided into the following phases:
Exploration
Appraisal
Development
Production
Abandonment
Oil and Gas Field Phases

Exploration
Exploration is a process of finding regions which there might be oil by analyzing available information.
Exploration is almost like a detective work which requires looking for clues, careful observation, taking notes of different information and evaluation of survey data.
This is the job of petroleum geoscientists who are experts on rocks.
Petroleum geoscientists begin looking for places where there might be oil.
They look for signs that might indicate the presence of oil.

Exploration
Geoscientists should create the picture of underground, and figure out how everything is organized underground.
They use special tools in order to see the rocks underground.
Most commonly they use seismic technology

Seismic Technology
The working principle of seismic is based on shock waves created by an explosion or sound generator.
These waves travel beneath the surface of the Earth and reflected back by the various rock layers.
The reflections travel at different speed depending upon on the type of rock layers through which they pass.
So geophysicists interpret the readings for signs of rocks which might contain oil or gas.

Seismic Technology

Exploration Well
The only way to be absolute sure that there is oil in the underground is simply to drill a well.
Drilling is expensive, the cost of drilling one well can be anything from 1 million to 35 million
the cost depends on several factors:
location of the field (onshore or offshore)
the size of the field, the amount of information which is available
the type of rocks underground
So if hydrocarbons are not found there is no return on the investment.
Therefore there is a large risk involved

Appraisal Phase
If the results of exploration look promising, then the company enters the Appraisal phase of the life of the field.
During this phase, more seismic waves may be shot and more wells will be drilled to obtain precise picture of the size, shape and producibility of the accumulation.

Field Development Plan
If the prospect considered to be economically attractive a Field Development Plan will be prepared and submitted for approval to the government.

Development
When the approval for development is received then the company will commence drilling Development wells and building production facilities according to the Development Plan.

Production
The production phase commences with the first commercial quantities of hydrocarbons ("first oil") flowing through the wellhead.
This marks the turning point from a cash flow point of view, since from now on cash is generated and can be used to pay back the prior investments, or may be made available for new projects.