overview of petroleum business
TRANSCRIPT
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Overview of Petroleum
Industry
June 25, 2011
By
Dr. Vinit Hansamuit
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What is Petroleum?
• Petroleum: a natural yellow-to-blackflammable liquid hydrocarbon
found beneaththe earth’s surface
• Hydrocarbon: an organic compound made
up of carbon and hydrogenatoms
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The Goal - „Black Gold‟
Light Texas CrudePalo Pinto Field
North Texas
Heavy TexasCrude
Humble Oil Field
Southwest Texas
Petroleum Supplies our Energy Needs
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What is Petroleum?
A natural, yellow-to-black, flammable, liquidhydrocarbon found beneath the earth’s surface
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Petrochemical Products
• Detergents - Cosmetics
• Fertilizers - Weed Killers
• Medicine - Antiseptics - Anesthetics
• Plastics - Synthetic Fibers
• Synthetic Rubber
• Rust Preventatives
• Liquid Petroleum Gas
American Petroleum Institute,1999
More Than 3,000 Products
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History of Petroleum
First Use:
• Egyptians: oil to preserve mummies
• Chinese: natural gas for fuel• Babylonians: oil to seal walls and pave streets• Americans: tar to seal canoes
FirstDrilling:
• Chinese using bamboo: to 800’ in 347 AD • Americans using cable tool: to 70’ in 1859
ADFirst
Product:
• Kerosene for lamps• Gasoline was unwanted by-product
DemandIncrease:
• Industrial Revolution- Internal Combustion Engine (1885)- Global Economic Growth
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Energy Usage: 1750-2000An Energy Dependent Society
Steam Steamlocomotive
Power stations
Internal combustionengine
Air travel
Populationgrowth
Globalmarkets
1750 1800 1850 1900 1950 2000
H yd ro c a r b o
n s N u
c l e
a r
Telecommunications
WWI
WWII
Satellite
Environmentalissues
Micro-processor
Internet
E n e r g y U s a g e
? Modifiers
Drivers
Cook and Sheath, 1997
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Population-Driven Energy Demand
10,000
8,000
6,000
4,000
2,000
01500 1700 1900 2100
World
Population(Millions)
World Primary
Energy Consumption(Quadrillion BTU)
500
400
300
1975 1985 1995 2005 2015 AAPG Explorer, 8/95
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(NOT FROM UNDERGROUND LAKES!)
Where Do Oil and Gas Come From?
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Where Do Oil and Gas Come From?
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Rock Porosity
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13Breccia Conglomerate
Volcanic Sandstone
Sample of Rock
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Rock Permeability
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Geologic Time
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Carboniferous 360-290 ma
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Jurassic 200-146 ma
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Fossils like these Trilobites…
…can give clues about the ages
of rocks and their environmentsof deposition
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The Origin of Petroleum
Organic-richSource Rock
Thermally MaturedOrganic Matter
Oil
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Source: Oil is produced from “source rock”
Oil is formed in sedimentary rocks that contain largequantities of organic material. Most of the world‟s oil is
generated from rocks containing algae, an aquatic plant
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Sea or lakeImpermeable stratum
Accumulation
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Weathering and Erosion
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Weathering and Erosion
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Weathering and Erosion
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Rock Formation
Sea or lakeSandSediment + sandImpermeable stratum
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Folding
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Geological Structure
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Volcano Eruption
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Basins: Forces that shape the earth’s crust
Basins form in response to subsidence caused by movement of
the crust and grow due tectonic “loading”
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Folding
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Petroleum System Process
120° F120° F
350° F350° FGenerationGeneration
MigrationMigration
Seal RockSeal Rock
Reservoir RockReservoirRock
OilOil
WaterWater
Gas CapGasCap
EntrapmentEntrapment
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The 5 Steps of Petroleum
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1.Finding&Drilling
2. Pumping 3. Transporting
4. Refining
The 5 Steps of Petroleum
5. Selling ProductsTexas A&M University SPE-Student Chapter
PEEC Elementary School Division
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Do we have enough InformationBefore we drill?
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More Information means lower risk
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Source Receivers Shot record
Seismic Survey
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Vibroseis
Land Seismic
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Seismic Acquisition
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Seismic energy is put into the earth
Vibrators
Veritas DGC, Inc.
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Seismic energy is put into the earth
Dynamite
Veritas DGC, Inc.
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Seismic Acquisition
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Marine Seismic
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Special 3 Dimensional Visualization Techniquesare used to understand the subsurface
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3D Visualization Techniquesare used to enlarge the subsurface images
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Stacked seismic data is correlatedand tied to other well logs
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SENW
AREA 1 AREA 2 AREA 3 AREA 4
Seismic Cross Section
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3D Modeling
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Movie
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4D Seismic
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First Petroleum Wells
Drilled in 1859 in NorthOf Pittsburgh, PA
The discovery was important
but only produced about
25 barrels per day
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The First Oil Well Has
Turned to be a Museum
D illi Ri i Th D
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Drilling Rig in Those Days
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Scene of Early Oil Field
Scene of Ea l Oil Field
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Scene of Early Oil Field
Old Da s T anspo tation
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Old Days Transportation
Oil as Transported in the
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Oil was Transported in the
Wooden Barrels
Th fi j il di
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The first major oil discoverySpindletop, Texas 1901
The “Lucas Gusher” producedover 100, 000 barrels of oil perday into the air before the wellcould be capped and controlled
This was the first realizationthat a significant supply of thewell-known fuel could beachieved.
It was also the first time thatfortunes were made in the oilfields.
T d ’ D illi O ti
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Today’s Drilling Operation
These are some of the tools we use
to drill wells
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1. Mud pit
2. Pump
3. Injection line
4. Injection head
5. Drilling pipes
6. Descending mud
(in pipes)
7. Returning mud
(in annular space)
8. Filter
9. Mud return for
recycling
Drilling Operation
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Drilling Rigs
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Land Rig
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LAND OFFSHORE
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DEEP WATER RIG
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Jack-up Rigs
Cost of Drilling Rigs
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Offshore Onshore
Daily Rig Cost
1998 $90,0001999 $40,000(Single year contract)
Ultra DeepDaily Rig Cost
1998 $180,0001999 $180,000(Five year contract)
Cost of Drilling Rigs
Daily Rig Cost
1998 $60,000
1999 $30,000(Single year contract)
JMA
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Offshore Rig
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Extended Reach Drilling
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Extended Reach DrillingTechnology Advances Result in More Cost-EffectiveWells
•
•
•
Reduce friction • Use geology to find stable path of least resistance
Drill Mud reduces torque and drag
Tri-cone Drill Bit Downhole Motor and
Steering Assembly
Logging Tool
Torque Torque Drag Drag
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Directional Drilling Avoids Surface Hazards
Gas
OilWater
American Petroleum Institute, 1986
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Well Logging
Physical properties measured in the core are
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Physical properties measured in the core arecorrelated with well logs to deduce rock properties
ll i
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Well Testing
1. Hydrocarbons rising
under pressure 2. Flow bean3. Gage measuring
pressure variation
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Completed Oil Well
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Cross Flow fromMulti-zone
Perforation
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Single and
Double Tubing
Completion
R i Si l i
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Reservoir Simulation
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Production
Beam Pump
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Beam Pump
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Oil Production at Fang
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Gas Lift
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Down HolePump
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Gas Production wellOn shore
Off h G P i Pl t
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Offshore Gas Processing Plant
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Gas Production Platform
Off shore
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91Arthit Gas Field
Oil Field in
North Sea
Wellhead Platforms
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Wellhead Platforms
Tripod WPFour-pile WP
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SecondaryProducing Wells
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SecondaryRecovery
Water
Gas
SteamChemical
Fire
Pumped into thereservoir to force
additional petroleumout of the pores inthe reservoir rock
Injection
WellsOf 60% Remainingin Reservoir
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Water Flooding
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10224803
Transporting PetroleumTransporting Petroleum
Oil FieldOil Field
Oil FieldOil Field PipelinePipeline RefineryRefinery
PipelinePipeline
Railroad Tank CarsRailroad Tank Cars
MobilTank TruckTank Truck
ConsumersConsumers
Industrial Customers
IndustrialCustomers
Local
Distributor
Local
DistributorMobil
TankerTanker
Offshore PlatformOffshorePlatform
after World BookEncyclopedia
JMA
Gas Pipeline
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Trans A laska Pipel ine abou t 40 miles
south of Prudhoe Bay ( July 2001, photo by M. McCaffrey )
Gas Pipeline
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Crude Tanker
LNG Tanker
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LNG Tanker
Natural Gas in China
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Natural Gas in China
Where is Heavy Oil?
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SAGD
THAI
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THAI
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Methane Hydrate
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Mol. Ratio 1:5.75
Vol. Ratio 1:168
Stable@-20C (-162 C for LNG)
y
Mystery at Bermuda
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Mystery at Bermuda
Hydrothermal Energy
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Hydrothermal Energy
Nature of Business
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PRODUCTION
STAGE
20 + 10 Yrs
DEVELOPMENT
STAGE
3 - 5 Yrs
EXPLORATION
STAGE
6 + 3 Yrs
ACQUISITION
STAGE
HIGH
LOW
1 Yr
RISK
EXPLORATION PERIOD PRODUCTION PERIOD
E&P Process
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Production
Development
Dry
Drilling (More Well)
Discovered
Drilling Well LoggingWell Testing
Sale Agreement
Exploration Geological Survey
SEISMIC
Reserve Estimate
Abandonment
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World primary energy consumption
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y gy
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Think Gasoline is Expensive?
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It’s a bargain compared to many other everyday
products THB per Litre
Chanel N05 Perfume .....….….... 20,000
Chang Beer................……....... 63
Orange Juice ...............…...... 70Evian Bottled Water …...…… 20
Milk ..................................…... 40
Gasoline ……………………… 36
Based on price comparisons in Bangkok, August 2008
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T O P T E N O I L P R O D U C E R S
TOP TEN OIL PRODUCERS
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1972
COMPANYNAME
TYPECOMPANY
EXXON
BP
SHELL
TEXACO
CHEVRON
GULF
MOBIL
ROSNEFT
TOTAL
SONATRACH
Major
Major
Major
Major
Major
Major
Major
NOC-USSR
Major
NOC-Algeria
AVERAGE DAILY NETPRODUCTION
MBO / DAY
4,968
4,664
4,169
3,777
3,232
3,214
2,316
1,301
977
925
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
2006
COMPANYNAME
TYPECOMPANY
ARAMCO
GAZ PROM
NIOC
PEMEX
EXXON MOBIL
BP
CNPC
SHELL
SONATRACH
PDVSA
NOC-Saudi Arabia
NOC-Russia
NOC-Iran
NOC-Mexico
Major
Major
NOC-China
Major
NOC-Algeria
NOC-Venezuela
AVERAGE DAILY NETPRODUCTION
MBO / DAY
11,663
9,874
6,036
4,328
4,237
3,878
3,479
3,425
3,172
2,895
Data Source – Schlumberger
1972 2006 1972 - 2006
SUPERMAJORS’ PRODUCTION DECLINE
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COMPANY
AVERAGE DAILY NETPRODUCTION
MBO / DAY
AVERAGE DAILY NETPRODUCTION
MBO / DAY
AVERAGE DAILY NETPRODUCTION
CHANGE
SHELL 18 %4,200 3,425(SHELL + ENTERPRISE)
TOTAL 24 %1,970 1,506(TOTAL + CFP + ELF + FINA)
BRITISH PETROLEUM 38 %6,200 3,878(BP + SOHIO + BRITOIL + AMOCO + ARCO)
EXXONMOBIL 42 %7,350 4,237(EXXON + MOBIL + SUPERIOR)
CHEVRON 11,030 1,759 84 %(CHEVRON + GULF + TEXACO + GETTY + UNOCAL)
Data Source – Schlumberger
E&P REVOLUTION
GETTYTEXACO
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$ / B a r r e l I n 2 0 0 4 U S D
$60
$40
$20
$ 0
$80
Data Source – Energy Information Administration
ENTERPRISE
SOHIO
SHELL
YEAR
UNOCAL
GULF
SUPERIOR
FINA
AMOCO
TENNECO
ELF
ARCO
TOTAL
MOBIL
EXXON
CHEVRON
1984 200019981988 2001 200520021987
BRITOILBP
CPC
SINOPEC
ONGC
ENI
JNOC
CNOOCCNOOC
SINOPEC
JNOC
ONGC
CPC
ENI
CHEVRON
EXXON
SHELL
TOTAL
BP
• ALL ACQUIRED COMPANIES WANTED TO BE ACQUIRED
NO SUCCESSFUL GROWTH PROGRAM
ESCALATING COSTS
DECLINING PRODUCTION
• THE M&A’s WERE NOT HOSTILE TAKE OVERS!
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127Department of Reservoir Engineering
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The Oil Industry Saved the Whales
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•
Mid-1800s –
735 U.S. whaling ships; whaleshunted to near extinction
• 1849 – method to distill kerosene frompetroleum discovered
•
1859 –
first U.S. patent for clean-burningkerosene lamp
• Kerosene took over lighting market
• 1876 – only 39 U.S. whaling ships
Tarr
Farm, PA, 1862
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, ,
But Nature Heals: Tarr Farm, 1991, same view
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And Nature is a WillingHelper for Solving
Old Problems
Pioneer &
Funkville,PA
1867
1984
Oil Spill in GOM
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Oil Field outside California
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Oil Field outside California
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Drilling Rigs, Production Platforms Are“Pit Stops” for Monarch Butterflies
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Source: Gary Noel Ross, PhD, professor emeritus of biology, Southern University, Louisiana Environmentalist , September-October 1994.
• 300 million monarchs fly from Canada,U.S.
• Spend winters in warm central Mexico
• Offshore oil-industry equipmentin Gulf of Mexico offers ideal rest stop
• Monarchs attracted to structures with
bright yellow paint• Sleep-over lets them
take a breather
Shhhh! Don’t Disturb the Bears
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When drilling in an area that was home to
grizzly bears, companies cared enough toprotect them:
• Restricted human access by using remote
technology to monitor drilling• Controlled hours of road use
• Drilled wells only during winter
• Muffled equipment noise