Oil and Gas Industry Overview

Early Days of the Oil and Gas Industry

• The first successful oil well, drilled by Edwin Drake, was completed on August 27, 1859.
• This marked a significant step towards replacing whale oil.
• Early oil production sites differed in location and characteristics from modern facilities.
• Artificial lift methods have been essential to the upstream sector since its inception.

Three Oil and Gas Industry Sectors

• The oil and gas industry comprises three main sectors: upstream, midstream, and downstream.
• The upstream sector focuses on exploring and extracting crude oil and natural gas.
• The midstream sector processes, stores, markets, and transports crude oil, natural gas, and natural gas liquids (NGLs).
• NGLs include ethane, propane, butanes, and sulphur.
• Midstream companies connect oil and gas production sites with consumers.
• The downstream sector encompasses oil refineries, petrochemical plants, and retailers of petroleum products and natural gas distribution.
• Downstream products include gasoline, diesel, jet fuel, heating oil, asphalt, lubricants, synthetic rubber, plastics, fertilizers, antifreeze, pesticides, pharmaceuticals, and natural gas propane.

Upstream Sector: Drilling and Reservoir Types

• The upstream sector starts with drilling operations for exploration and production.
• The common reservoirs in the U.S. include oil, volatile oil, dry gas, and gas condensate.
• Each reservoir type has unique characteristics, producing different hydrocarbon mixtures.
• Formation pay zones vary, which influences exploration and production decisions.

Upstream Sector: Well Types

• Common well types include conventional gas, shale gas, coal bed methane, and tight gas wells.
• Unconventional wells (like shale gas) require special techniques like fracturing.

Upstream Sector: Artificial Lift

• Artificial lift systems are used when natural reservoir pressure is insufficient.
• These systems enhance production by raising fluids to the surface, mitigating pressure constraints.
• Pumping units maintain production as natural reservoir pressure diminishes.

Dual-Completed Wells

• Dual-completed wells extract resources from two different formations using a single wellbore and wellhead.

Well Completion: Perforation

• Wells are perforated to allow reservoir fluids to enter the wellbore.
• The perforation process often occurs during well completion.

Oil Well Stream Composition

• Oil wells produce a mix of oil, water, gas, and potentially other substances.
• The oil-to-water and fluid-to-gas ratio defines whether a well is classified as an oil well or a gas well.

Natural Gas Composition

• Natural gas contains methane, ethane, propane, butanes, pentanes, and various trace elements.

Different Pressure Measurements

• PSIA (pounds per square inch absolute) and PSIG (pounds per square inch gauge) are common pressure units.
• PSIA is more significant in midstream, whereas PSIG is often used in upstream operations.

Top Forms of Energy Production in the US

• Top energy sources in the U.S. include petroleum, nuclear, natural gas, hydro, wind, solar, geothermal, biomass, and wood.