Oil and Gas Screen Note 2023-04-03 PDF

PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development Compiled by Wayne  TOPIC 1: PETROLEUM INDUSTRY o Well logging LIFE CYCLE o Well test Upstream:...

PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development Compiled by Wayne  TOPIC 1: PETROLEUM INDUSTRY o Well logging LIFE CYCLE o Well test Upstream: Exploration & Production Development: To build subsurface and surface facilities to produce oil and gas safely E&P consists of activities related to and efficiently searching, recovering and producing crude oil and natural gas On shore Offshore Midstream: Transportation & Storage Production: To extract, process and export oil The oil and gas midstream activities and gas as per contract agreement involves the transportation and storage of crude oil and natural gas from E&P On shore fields to processing plants. Offshore Downstream: Refining & Marketing Abandonment: To plug wells permanently, remove surface facilities and restore the field The oil and gas downstream activities as per initial state involves refining crude oil and processing raw natural gas into sale Wells must be permanently closed and products and wholesale marketing. sealed, so no more hydrocarbon can Downstream plants include oil escape to the surface. refineries and petrochemical plants Site must be restored to as close as it original condition MIDSTREAM: TRANSPORTATION Oil transportation: Onshore Located far from civilization and therefore need to be transported. Initially, produced oil is stored inside wooden barrel and transported using horse carriage. After invention of gasoline and diesel engine, horse carriage is replaced by truck and train. Once the volume getting bigger and the UPSTREAM: FIELD LIFE CYCLE distance getting further, barrel method become uneconomic and pipeline was Exploration: To search for oil and gas deposits introduced. Pipeline is a long connected pipe used Gravity and Magnetic Surveys to transfer liquid or gas. Seismic Survey Wildcat : Exploration well drilling Oil transportation: Offshore Appraisal: To define oil and gas volumes and Offshore pipeline is laid on the seabed reservoir rock characteristics after discovery to convey oil from offshore platform to onshore facility. Appraisal wells are used to delineate If the distance is too far or the volume is the physical dimensions of the field and too low, transporting liquid via pipeline calculate its development potential can be technically and economically Most appraisal wells include: challenging. o Coring PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 1  In this case, oil will be stored offshore The LNG Process (by using FPSO, FSO, or subsea storage) and then transported by using oil tanker. Gas Production Liquefaction o Pre Treatment (Gas Purification):  Condensate removal  Dehydration  CO2 removal  Mercury & H2S removal o Refrigeration  Gas is converted into liquid by cooling it up to - 162°C LNG Shipping Regasification End Customer DOWNSTREAM: REFINERY Refining: Process of converting the raw Gas transportation material (crude oil & natural gas) into higher In early days, gas is considered as a by- value product. It can be final product (ready to product which is disposed by burning or use product such as LPG for home cooking) or flaring. Only after gas can be monetized intermediate product (raw material for other (petrochemical plant, power plant) gas processes such as ammonia for fertilizer) transportation is required. Crude oils are mixtures of thousands of Since natural gas cannot be stored different compounds called easily like liquid, produced gas has to hydrocarbons. be delivered soon after processed by Each component of each compound using pipeline, either onshore or has its own size, weight and boiling offshore. However, if the distance is too temperature. far and the volume is too big, pipeline Crude oils have low value if not become uneconomical. processed/refined. Therefore, gas has to be transformed Petroleum refining is a physical and into liquid phase by condensing it up to chemical process to transform crude -162°C in atmospheric temperature to oils into useful products. reduce its volume by 600 times which is Malaysia has five (5) refineries with a known as Liquefied Natural Gas (LNG). total processing capacity of 540,000 LNG can be transported in a specially bbl/day. designed cryogenic (very cool) tank attached to vessel (known as LNG DOWNSTREAM: OIL AND GAS tanker) or truck PROCESSING AND TREATMENTS MIDSTREAM: (LIQUIFIED NATURAL GAS Refinery Process (LNG)) PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 2  o Ethylene and propylene are raw materials for plastic products o Butadiene is used to make synthetic rubber Aromatics o Includes benzene (C6H6), toluene (C7H8), and xylene (C8H10) o Benzene is raw material for dyes and detergent o Toluene is used to make polyurethane o Xylenes is used to produce plastics and synthetics fibres Crude Oil Synthetic Gas Wash in a Desalter o Synthetic gas is a mixtures of Heated Carbon Monoxide (CO) and Crude Oil Fractionee (Distillation Hydrogen (H2) used to make Column) ammonia and methanol High Value Product o Ammonia is used to make fertilizer urea Oil and Gas Refinery Products o Methanol is used as a solvent Light distillates and chemical intermediate o Liquid petroleum gas (LPG) OIL IMPACTS ON THE ECONOMY: o Gasoline (Petrol) – used in cars IMPORTANCE OF ENERGY BY SOURCES o Naphtha (flammable liquid hydrocarbon mixture) – used in By 2040, oil and natural gas will be the chemical production world’s top two energy sources, Middle distillates accounting for 60% of global demand o Kerosene - used as jet fuel From its peak in 2025, coal will decline o Diesel fuel – fuel for diesel more than 10% by 2040 engines Latin America and China are the o Heavy oil biggest users of hydro power, which Heavy distillate makes up over 80% of total Hydro/Geo o Asphalt supplies o Bunker fuel oil OIL IMPACTS ON THE ECONOMY: o Heavy fuel oil DEMAND AND SUPPLY DOWNSTREAM: PETROCHEMICAL Oil Company: National Oil Company (NOC) PRODUCTS An oil company that fully or in the Petrochemical: A chemical product that majority owned by a national derived from petroleum government Primary petrochemical can be divided into Example: Saudi Aramco, Petronas, three (3) groups based on their chemical PetroChina, Pertamina, Petrobras, structures Statoil Olefins Oil Company: International Oil Company (IOC) o Includes ethylene (C2H4), Largest publicly owned oil and gas propylene (C3H6) and butadiene companies (C4H6) PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 3  Example: BP, Royal Dutch Shell, Spare production capacity Chevron, Total, Exxon Mobil OPEC production decisions Non-OPEC supply growth Organization of the Petroleum Exporting Countries (OPEC) Weather Inventories to coordinate and unify the petroleum Global economic growth policies of its Member Countries and Speculation, hedging, investment ensure the stabilization of oil markets in Exchange rates and inflation order to secure an efficient, economic and regular supply of petroleum to OIL IMPACTS ON THE ECONOMY: THE consumers, a steady income to SIGNIFICANCE OF OIL TO MALAYSIA producers and a fair return on capital for COMPANY those investing in the petroleum The Malaysian Oil and Gas Industry is industry. contributing significantly to Members: Algeria, Angola, Ecuador, Employment, Labour Income, and Equatorial Guinea, Gabon, Iran, Iraq, Value Added. Kuwait, Libya, Nigeria, Qatar, Saudi o Employment is defined as the Arabia, United Arab Emirates, number of employees and self- Venezuela employed jobs, including part- Impact of Oil Prices Drop time jobs. o Labour income is defined as The positive impact would come from wages and salaries and benefits. two (2) main channels: o Value added consists of: o On the DEMAND side, the lower employees’ compensation, oil prices will increase the real property owners’ income, and income of households, indirect business taxes. prompting them to increase Malaysia is overly dependent on oil consumption. revenue (57%); its transportation and o On the SUPPLY side, the lower industrial sectors are still heavily oil prices will reduce production dependent on oil products. costs and may induce firms to With the depleting hydrocarbon increase output resources, other form of revenue Oil imports bill would be reduced, generating alternatives need to be resulting in lower cost of doing business developed and quickly. and higher production amid the positive Among the 10 countries of the demand effect. Association of South East Asian On the other hand, the lower oil price Nations (ASEAN) there are two major will lower the government’s oil revenue oil exporters: Indonesia and Malaysia. stream. Over the last decade, Indonesia’s oil There are two major components of production has been declining, which government oil revenue which is eventually led to the country becoming Petroleum income tax (roughly 44% of a net oil importer and it withdrew from oil related revenues) and PETRONAS the Organization of the Petroleum dividends (45% of oil revenues) Exporting Countries (OPEC) in 2008. OIL IMPACTS ON THE ECONOMY: OIL Four Scenarios for Malaysia to be A Net PRICES TRENDS AND KEY DRIVES Oil Exporter o Increase oil production – Factors Affecting Oil Prices enhanced oil recovery (EOR) to Geopolitical risks increase production level (example Dulang oil field). PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 4  o Increase oil production – Increase investment in exploration and production. o To reduce oil consumption – Subsidy elimination (to suppress energy consumption). o To reduce oil consumption – Technology advances to improve overall energy efficiency in the industrial sectors. 12 National Key Economic Areas (NKEAs) o Great Kuala Lumpur/ Klang Valley o Oil, Gas and Energy o Palm Oil and Rubber o Wholesale And Retail o Financial Services o Tourism o Electronics and Electrical o Business Services o Communication Content & Infrastructure o Education o Agriculture o Healthcare PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 5 TOPIC 2: INTRODUCTION TO OIL & Because this rock changes, it is called GAS EXPLORATION metamorphic. Metamorphosis can occur in rock when they are heated to ORIGIN OF PETROLEUM: ROCK CYCLE 300 to 700 degrees Celsius. When Earth's tectonic plates move around, they produce heat. When they collide, they build mountains and metamorphose the rock. The rock cycle continues. Mountains made of metamorphic rocks can be broken up and washed away by streams. New sediments from these mountains can make new sedimentary rock. The rock cycle never stops ORIGIN OF PETROLEUM: SEDIMENTARY Igneous rock forms when magma cools BASINS and makes crystals. Magma is a hot The official definition of a sedimentary liquid made of melted minerals. The basin is: a low area in the Earth’s crust, minerals can form crystals when they of tectonic origin, in which sediments cool. Igneous rock can form accumulate. Sedimentary basins range underground, where the magma cools in size from as small as hundreds of slowly. Or, igneous rock can form meters to large parts of ocean basins. above ground, where the magma cools The essential element of the concept is quickly. tectonic creation of relief, to provide When it pours out on Earth's surface, both a source of sediment and a magma is called lava. Yes, the same relatively low place for the deposition of liquid rock matter that you see coming that sediment. out of volcanoes. A depression in the crust of the Earth On Earth's surface, wind and water can formed by plate tectonic activity in break rock into pieces. They can also which sediments accumulate. carry rock pieces to another place. Continued deposition can cause further Usually, the rock pieces, called depression or subsidence. sediments, drop from the wind or water Sedimentary basins, or simply basins, to make a layer. The layer can be vary from bowl-shaped to elongated buried under other layers of sediments. troughs. If rich hydrocarbon source After a long time the sediments can be rocks occur in combination with cemented together to make appropriate depth and duration of sedimentary rock. In this way, igneous burial, hydrocarbon generation can rock can become sedimentary rock. occur within the basin. All rock can be heated. Inside Earth there is heat from pressure and friction. ORIGIN OF PETROLEUM: CONVENTIONAL There is also heat from radioactive AND UNCONVENTIONAL RESERVOIRS decay (the process that gives us Conventional: traditional way to drill for raw nuclear power plants that make natural gas, crude oil, and petroleum electricity). Baked rock does not melt, but it does After a well is drilled, oil and gas is change. It forms crystals. If it has extracted by the natural pressure from crystals already, it forms larger crystals. the wells and pumping operations. PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 6  Over time, the well may decrease in production. At this time, a conventional well will use an artificial lift or water and gas injections to help increase production. After production gets to a point where the profits of oil are not enough to cover expenses, the well will usually stop production. If methods beyond an artificial lift or classic methods are used to increase production, then it would be classified at PETROLEUM SYSTEM: RESERVOIR ROCK unconventional oil A reservoir rock is a place that oil Unconventional: method that allows to drill migrates to and is held underground. down, drill horizontally, and fracking occurs. A sandstone has plenty of room inside itself to trap oil, just like a sponge has Sometimes unconventional drilling room inside of itself to soak up spills in methods are used due to increasing your kitchen. scarcity of retrieving oil and gas using It is for this reason that sandstones are conventional methods. the most common reservoir rocks. Not always, is the oil and gas available Limestones and dolostones, some of to be retrieved by drilling and pressure which are the skeletal remains of naturally allowing the flow of gas. ancient coral reefs, are other examples Unconventional drilling comes in of reservoir rocks. handy. Here we see what a reservoir rock This allows oil and gas to be flowing would look like through a magnifying from tight sands that we normally could lens. The yellow objects represent sand not retrieve with conventional methods grains that are packed together. of drilling Notice, however, the purple areas PETROLEUM SYSTEM: SOURCE ROCK between the sand grains. These areas (also known as "pore spaces") are A rock rich in organic matter which, if where the oil fits into the rock. In a very heated sufficiently, will generate oil or "porous" rock (one with many pore gas. spaces), oil can move freely through Typical source rocks, usually shales or these spaces. limestones, contain about 1% organic Example: Sandstone matter and at least 0.5% total organic carbon (TOC), although a rich source rock might have as much as 10% organic matter. Rocks of marine origin tend to be oil- prone, whereas terrestrial source rocks (such as coal) tend to be gas-prone. Preservation of organic matter without degradation is critical to creating a good source rock, and necessary for a complete petroleum system. PETROLEUM SYSTEM: SEAL ROCK Under the right conditions, source rocks may also be reservoir rocks, as in the Also known as cap rock case of shale gas reservoirs. PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 7  A relatively impermeable rock, Magnetic measurements in commonly shale, anhydrite or salt that geophysical exploration record forms a barrier or cap above and variations in the magnetic field due to around reservoir rock such that fluids lateral variability in the magnetization of cannot migrate beyond the reservoir. the crust. A seal is a critical component of a The lateral variation may produce complete petroleum system. The anomalous regions which are indicative permeability of a seal capable of of structural or lithological contrasts in retaining fluids through geologic time is the subsurface. ~ 10-6 to 10-8 Darcie’s. These data can be collected at the earth's surface, from the air, the sea or PETROLEUM SYSTEM: OVERBURDEN in a borehole environment ROCK EXPLORATION TECHNIQUES: Overburden rock is the total GRAVIMETRIC SURVEY stratigraphic section above the source rock. Gravimetric was one of the first The thickness and age of overburden geophysical methods to be used in rock provides a history of the rate of exploring for oil and gas. burial of a source rock toward and As the name suggest, this method uses through the increasing temperature accurate measurements of the Earth's domains of the basin. gravitational field to locate horizontal This includes the range of temperatures and vertical variations in the density of necessary for cracking kerogens into subsurface rocks. hydrocarbons. The precondition is that the geological structures have to be distinguishable through clear differences in density. Gravimetric surveys are carried out using extremely sensitive instruments capable of measuring tiny variations in the gravitational field. Geophysical surveys are performed with gravimeters and are always accompanied by a high-precision topographic survey Gravimetric applications include: o Regional geological mapping; EXPLORATION TECHNIQUES: MAGNETIC o Detection of karsts and voids; TECHNIQUES o The determination or improvement of terrestrial geoid; The magnetic method is the study of the o The oil and gas exploration distribution of magnetic minerals in the o Mineral exploration; upper 20-30km of the earth's crust. o Measurements of sediment The magnetic method may also be thickness; used to estimate the thickness of the o The archaeological surveys. crust or to constrain temperatures in the crust using the Curie isotherm (the EXPLORATION TECHNIQUES: SEISMIC temperatures at which minerals lose METHOD their strong magnetic properties), Seismic ground geophysical methods whichever is shallower. are techniques based on the study of the propagation of seismic waves. PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 8  The techniques outlined below involve The data are collected on the surface variations in data acquisition and without the need of borehole. MASW processing, the choice of which will data collection may be extended to 2D depend on the project goal. or 3D profiling/imaging. Each technique can yield new insights The MASW seismic method allows to into the subsurface. obtain the shear wave velocity (Vs) o Refraction distribution in the ground and bedrock. o Reflection It can be applied as a 1D sounding or o Multi-channel Analysis of as 2D profiles. Surface Waves (MASW) Seismic Method: Resonance o Resonance o Borehole The seismic resonance, or TISAR (Testing & Imaging using Seismic Seismic Method: Refraction Acoustic Resonance) method is a new The seismic refraction method involves technique based on the frequency measuring the shortest time required analysis of seismic records for high for an induced seismic pulse to travel resolution seismic investigation. from the source location to a series of It considers the seismic resonance receivers. within the signal. From this travel time data, seismic The method was originally developed velocities and layer depths can be for geological sub-surface profiling (1 to calculated. 15 m deep); however it has been shown Seismic refraction remains the to be effective or ranges smaller than preferred method for accurately 0.1 m for testing of concrete/asphalt mapping the depth to competent structures, as well as for 100 m deep bedrock under most conditions. geological investigations. Seismic Method: Reflection Seismic Method: Borehole The seismic reflection method involves Borehole seismic surveys can be inducing a seismic wave into the earth carried out in several different ways. and recording the waves that are The Down-hole technique consists of reflected from sub-surface layers. measuring the arrival of seismic waves Seismic reflection is ideal for mapping emitted from the surface in increments geology at depths exceeding 50 m. down the borehole. Deep seismic reflection surveying is the The Cross-hole technique uses a most advanced technique in seismic source located in an adjacent geophysics today, thanks to its borehole. application on a huge scale for oil and The receiver in both cases is a tri-axial gas exploration geophone. This enables profiles of seismic Seismic Method: Multi-channel Analysis of velocities from compressional (P) Surface Waves (MASW) waves as well as shear (S) waves to be The Multi-channel Analysis of Surface obtained. Waves (MASW) is a seismic method Accurate 2-D maps of seismic velocity used to evaluate the shear-wave variations between boreholes can be velocities of subsurface materials produced by processing the data using through the analysis of the dispersion specialised software. properties of Rayleigh surface waves Borehole seismic techniques include ("ground roll"). down-hole, cross- hole and seismic tomography methodologies PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 9 EXPLORATION AND APPRAISAL WELL Exploration Well An exploration well is a deep hole that is drilled into the Earth’s surface with the aim of locating a new source of hydrocarbons such as oil and natural gas. Drilling of an exploration well poses a risk to the company, as it is uncertain how much the company will reap from the new source. Every new oil well was an exploration well at some point. Exploration depends on the technology that is used to detect and determine the amount of these deposits using exploration geophysics. Appraisal Well An appraisal well is a vertical or deviated well that is drilled so as to understand the potential of a hydrocarbon reservoir before commercial production of oil from a well can commence. The drilling of this well is an important part of the exploration and production activities of an organization. In the chronology of asset development program, appraisal drilling is performed before starting the commercial production. During field appraisal programs, appraisal wells are drilled in order to ensure that the discoveries made during exploration field have enough hydrocarbons that can last long and give an economic appreciation to the organization findings. Once the appraisal wells are drilled they provide information such as physical extent of hydrocarbons, likely production rate from the field, flow of fluids and volume of fluids, etc. PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 10 TOPIC 3: OIL AND GAS RECOVERY In the absence of experimentally TECHNIQUES measured properties, empirical correlations are used. RESERVOIR ROCK AND FLUID A hydrocarbon reservoir may be with PROPERTIES both gas and oil or with one of them and Understanding of the physical water. properties of the rock and its interaction Below are the main reservoir fluid with the hydrocarbon system is very properties: important to be able to evaluate o Specific gravity performance of a reservoir. o Density Rock properties are determined by o Isothermal compressibility 𝛥𝛥𝑉𝑉 performing laboratory tests on cores coefficient - 𝛥𝛥𝑃𝑃 samples from the reservoir. o Formation volume factor - the Important rock properties that can ratio of the volume of reservoir determine the quality and distribution of fluid at the prevailing reservoir hydrocarbon are: temperature and pressure to the o Porosity - ratio of the pore volume at standard conditions. volume to the total volume o Viscosity - the internal o Permeability - the capacity and resistance of the fluid to flow ability of the formation to OIL RECOVERY TECHNIQUES transmit fluids o Saturation - fraction of the pore Flow in porous media is a very complex volume occupied by a particular phenomenon and as such cannot be fluid (oil, gas, or water) described as explicitly as flow through o Overburden pressure – pressure pipes or conduits. due to overlying formations. It is rather easy to measure the length o Capillary pressure – pressure and diameter of a pipe and compute its difference between two flow capacity as a function of pressure; immiscible fluids. in porous media, however, flow is o Relative permeability - the ratio different in that there are no clear-cut of the effective permeability to a flow paths that lend themselves to given fluid at a definite saturation measurement. to the permeability at 100% The flow of fluid in porous media is saturation. affected by rock properties (porosity o Wettability - the tendency of one and permeability), fluid properties fluid to spread on or adhere to a (compressibility and viscosity). solid surface in the presence of Darcy equation other immiscible fluids o Surface (between gas and liquid) and interfacial (between two liquids)– tension the acting force between two immiscible fluids. Knowledge of reservoir fluid types and their properties is also very crucial as Where the pressure gradient is the they can determine the volumetric energy that determines the flow of fluid behaviour of hydrocarbon reservoirs. to the wellbore and it is described for The properties are determined from linear flow as: laboratory experiments performed on samples of actual reservoir fluids. PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 11  usually results in the recovery of only a small percentage of the total oil in place Driving Mechanism: Depletion drive The terms primary recovery, secondary recovery, and tertiary (enhanced) oil recovery are traditionally used to describe hydrocarbons recovered according to the method of production or the time at which they are obtained. Reservoir engineers are required to determine the best oil recovery methods (primary, secondary, and tertiary) that extend the life of reservoir and recover higher percentage of Also known as solution gas drive, original oil in place. dissolved gas drive, internal gas drive Original oil in place is the total In this type drive mechanism, the main estimated amount of oil in reservoir, source of energy is from gas liberation which cannot be fully recovered. from the crude oil and subsequent The ratio of producible oil to the original expansion of solution gas as the oil in place is called recovery factor. reservoir pressure reduces. The ultimate recovery vary as 5 to 30%. Driving Mechanism: Gas cap drive The average worldwide oil recovery is 35%, which leaves >60% of the oil in the reservoir. Thus, the need to implement other recovery methods to increase the recovery factor OIL RECOVERY TECHNIQUES: PRIMARY RECOVERY METHODS Primary oil recovery describes the production of hydrocarbons under the natural driving mechanisms present in the reservoir without The expansion the gas in the gas cap is supplementary help from injected fluids such the source energy. as gas or water. (Like a carbonated bottle The ultimate recovery is expected to drink) range from 20% to 40% Driving Mechanism: Rock and fluid expansion Driving Mechanism: Water drive drive As the expansion of the fluids and reduction in the pore volume occur with decreasing reservoir pressure, the crude oil and water will be forced out of the pore space to the wellbore. This driving mechanism is considered the least efficient driving force and PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 12  OIL RECOVERY TECHNIQUES: TERTIARY RECOVERY METHODS Tertiary (enhanced) oil recovery is that additional recovery over and above what could be recovered by primary and secondary recovery methods EOR (Enhanced Oil Recovery) – any method that increases oil production by using techniques or materials that are not part of normal pressure It is due to the movement of water into maintenance or water flooding the pore space that was originally filled operations. with oil, replacing and displacing it to It involves changing of the properties of the producing wells. the oil so that it can flow more easily. The ultimate recovery is expected to Thermal Recovery range from 35% to 75% Thermal recovery such as Steam Driving Mechanism: Gravity drainage drive flooding is the most widely used and profitable enhanced oil recovery technique for heavy crude oils. The process involves the injection of steam generated at the surface or downhole continuously or in cycles Recoveries from steam flooding are typically in the range of 50 to 60% OOIP, while the ultimate recovery from cycle steam is lower in the range of 10 to 25% OOIP. Gravity drainage occurs as result of Steam costs are very high and can differences in densities of the reservoir amount to up to 50% of the value of the fluids. produced oil The ultimate recovery can be >80% Miscible gas injection OIL RECOVERY TECHNIQUES: Gas is injected above Minimum SECONDARY RECOVERY METHODS Miscible Pressure such that gas Secondary oil recovery refers to the additional becomes miscible in oil in the formation. recovery that results from the conventional Viscosity of oil is reduced providing methods of water injection and immiscible gas more efficient miscible displacement. injection The process involves the injection of steam generated at the surface or Secondary recovery methods are downhole continuously or in cycles processes in which oil is subject to Gas is injected below minimum miscible immiscible displacement with injected pressure such that it sweeps the oil in fluids such as water or gas. front of it towards the production wells. Commonly water is injected into the This process can also be used to reservoir to force additional petroleum mitigate permanently the CO2 produced out of the pores in the reservoir rock from Power Plants Can recover up to 50% Chemical EOR PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 13  Chemical EOR involves a variety of Reservoir surveillance is a continuous techniques used to mainly to reduce the process of generating opportunities for interfacial tension and to modify the improving reservoir performance. mobility of the aqueous phase during oil It is important to identify well patterns displacement. and enhance injection processes. Chemical EOR methods utilize: It is a process of acquiring and o Surfactant analysing data to: o Polymer o Monitor reservoir performance o Alkaline o Provide information on o Alkaline -Surfactant –Polymer performance parameters to (ASP) improve ability for prediction Purposes o Identify barriers to meeting or o To reduce the interfacial tension exceeding forecast performance o To improve the flooding and provide methodologies to efficiency mitigate the impact The function of the surfactant is to RESERVOIR MANAGEMENT: RESERVOIR produce an ultra-low interfacial tension MODELLING AND SIMULATION between the crude oil and the injection solution Reservoir modelling is construction of a The function of the alkaline: computer model of a petroleum o To form in-situ surfactant. reservoir for the purpose of simulating o To reduce the interfacial tension fluid flow in a porous media. between crude oil and the The objectives of reservoir simulation injection solution. are to improve estimation of reserves o To reduce the amount of and making decisions regarding the surfactant adsorption onto development of the field, predicting formation. future production, placing additional The function of the polymer: wells, and evaluating alternative o To drive ASP slug. reservoir management scenarios. o To increase the sweep RESERVOIR MANAGEMENT: RESERVOIR efficiency. MANAGEMENT TEAM RESERVOIR MANAGEMENT The reservoir management team comprises of It is a very crucial process that aims to multidiscipline: maximize economic recovery of a Reservoir engineers reservoir using geology, geophysics and petroleum engineering. Geophysicists It helps engineers to understand and Geologists model a reservoir to evaluate Petro physicists operational changes and provide Drilling engineers necessary data to determine the Facility engineers economic viability of any potential Production engineers changes. It requires information such as reservoir fluid and rock properties, flow rate, temperature, pressure, and seismic data. RESERVOIR MANAGEMENT: RESERVOIR SURVEILLANCE PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 14  TOPIC 4: DRILLING OPERATION & Roles of Drilling Engineers: Drilling engineers FACILITIES facilitate the efficient penetration of the earth by wellbore and cementing operations from DRILLING OVERVIEW the surface to an optimum target depth. Specific duties include Oil well drilling is the process of creating holes in the earth’s surface in Plan the well before drilling preparation of extracting oil. Monitor drilling operations The earliest known oil well was drilled Review drilling results and recommend in China in 347BC using bamboos as future improvement modern drill pipe to extract oil. Prepare drilling reports Canada was the first to produce oil in commercial quantities in 1857 at 37 Drilling Crew: Personnel who operate the barrels per day. drilling rig. Typical crew are In 1859, the first well was drilled in USA Roustabout: Any unskilled manual by Colonel Drake at about 69 feet deep labourer on the rig site. Why do we drill a well? Roughneck: A floor hand who makes or o Geothermal power: to generate breaks connections as drill pipe is steam for electricity. tripped in or out of the hole. o Hydrocarbon production: to Motorman: Looks after the engine and produce oil and gas. other machinery o Gas or water injection: for Derrickman: He climbs the derrick to reservoir maintenance and gas 25m above the rig floor where he conservation. guides the top of the drill pipe o Fresh water production: to Tool Pusher: Experienced individual produce fresh drinkable water. who ensures that there are sufficient o Gather information: for materials, spare parts and skilled subsurface evaluation personnel. DRILLING WELL AND PERSONNEL Driller: A supervisor responsible for efficient operation of the rig site. He Oil Well Classifications: Oil wells are drilled to also operates all the machinery in a meet a defined purpose. The well control room. classifications include the following. DRILLING RIGS Wildcat: A small exploratory well drilled not known to be an oil field to get Drilling rigs are steel structures with geological information, to determine the drilling equipment and other potential for oil or gas deposits and to components used for drilling a well. identify specific targets. They are most classified into: onshore Appraisal: A well drilled after and offshore rigs. hydrocarbon presence is identified from Onshore rigs are primarily used on land the wildcat well, to establish the extent whereas offshore rigs are mainly used and size of the hydrocarbon deposit in shallow and deep waters and how to develop it most efficiently Onshore Rigs: Development: A well drilled in a proven producing field for the production of oil They are capable of drilling more than or gas. The intent of an oil company’s 30,000ft. deep development well drilling phase is to Example: Portable Mast, Conventional maximize the economic production and Land Rig, Coiled-tubing Rig recovery of a reservoir’s known reserves Fixed-Bottom Type: PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 15  Swamp Barge Hoisting System o This rig type is capable of drilling The hoisting system is used to lower or in water depths from 2 to 7 m. raise the drill string, casing, and other o After being towed to location, the equipment rig’s hull is filled with water until it rests on the bottom of the river bed. Jack-Up Rig o Jack ups are used for most the offshore exploration drillings worldwide. o They are mounted in relatively shallow water of depth less than 120 m. o They are towed to location and few are self-propelled Floating Type: Semi-submersible o This rig has a pontoon and columns that help to flood and caused the unit to submerge in water to a predetermined depth. o Capable of drilling in water depth of up to 3000 m. Drillship o Drill ships are not as stable as semi-submersible rigs. o They position themselves with Power System either anchors or dynamic positioning systems (DPS). The power system is used to provide o Capable of drilling in water depth raw power (prime mover) to carry out more than 3500 m. the drilling operation. Raw power includes: diesel engines, Other offshore rigs: steam engines, and spark ignition Jack up engines. Deep water jacket Raw power is transmitted through AC, Gravity based structure DC and mechanical drives Compliant tower Tension leg platform Classic spar Truss spar DRILLING COMPONENTS Rotary System The rotary system provides rotational motion to the drill string Example: Top drive, Rotary table and Kelly PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 16  Well control system is used to contain the pressure while drilling to ensure safe drilling operation. Example: Derrick Well monitoring system use real time devices to monitor the drilling operation for safety and security. Example: Driller’s control Drill string Components Drill pipe: A steel pipe available in three length ranges:18 – 22ft, 27 – 30ft and Circulating System 38 – 45ft. Stabilizer: A short pipe with either The circulating system is used to straight or spiral blades on the external circulate drilling fluid (mud) from the surface. It reduces buckling and surface to the hole and back to the bending stresses. surface Drill collar: Thicker steel pipe than the drill pipe that provides weight on the drill bit. Drill bit: A cutting tool used to create cylindrical holes. Drill bits Drill bits are special tools used to break Functions of some parts the formation rock during drilling o Mud pump : circulates drilling operation. mud in the system Most bits work by scraping or crushing o Shale shaker : removes drilled the rock, or both, usually as part of a cuttings from the drilling mud rotational motion. o Desander: removes granular The broken rocks usually referred to as waste from the drilling mud “cuttings” are removed from by well o Desilter: removes fine particles through the annulus during circulation. from the drilling mud o Degasser : removes entrained gases from the drilling mud Well Control & Monitoring System PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 17  Drill bits Classification: Diamond Cutter Bits high performance is achieved when used in abrasive and heterogeneous formations Drill bits Classification: PDC Drill bits Classification: Coring Bits PDC bits with matrix body has more erosion and wear resistance Mostly used to cut out rock samples for PDC bits with steel body has better hole data analysis cleaning capacity for higher rate of penetration (ROP) Drill bits Classification: Hybrid Bits A combination of two bit types Drill bits Classification: Roller Cone Roller cone bits have three cones that roll as the bit turns. Mill tooth bits have steel cutters fabricated as part of the bit cone. PROCESS OF DRILLING TCI bits have tungsten carbide pressed Sequence of Drilling Operation into the bit cone. For soft formations, mill tooth bits are 1. Drilling program best used to gouge the rock. 2. Rig setup For hard formations, TCI bits are used 3. Make a hole by drilling to crush the abrasive rock. 4. Casing setup o Conductor casing: Prevents washing out of surface soil. o Surface casing: Protects freshwater sources and for installing BOP. o Intermediate casing: Protects abnormal zones. o Production casing: Isolates reservoir from damage. PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 18  o Running in the production tubing and its associated down hole tools. o Perforating and stimulating the well. Well completion can be grouped into: open hole and cased whole completion. Open-Hole Completion Also called barefoot completion. The production casing is set and cemented at a depth just above the pay zone. This completion type is preferred in 5. Cement the gap between casing and consolidated formations which can hole (annulus) prevent caving and sloughing. o This refers to the process of This completion type is liable to sand introducing cement slurry to the production in the future life of the well. annular space between the wellbore and casing or between Slotted Liner Completion two successive casing strings The casing is set and cemented at a o The function is to achieve zonal depth just above the pay zone and isolation and a good cement to uncemented slotted liner installed pipe bond across the pay zone. This completion type is used where there is the risk of wellbore instability such as wellbore collapse. External Gravel Pack Completion An open hole or cased hole gravel pack is used when the sand particles are too fine or abrasive for a plain screen Mostly used in weak sandstones and unconsolidated rocks Perforated Liner Completion A liner is casing that hangs from the 6. Repeat steps 3, 4, & 5, using smaller bottom of the intermediate casing. drill bit and casing It is cemented and perforated 7. At reservoir zone (pay zone), complete selectively for production. the well by perforation with tubing The production casing is cemented and installation. perforated using a perforation gun for WELL COMPLETION TYPES hydrocarbon production. Well completion is the process of making a well ready for production. This principally involves: o Preparing the bottom of the hole to the required specifications. PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 19 Multiple Zone Completion A multiple zone completion is a type of completion which allows operators to selectively produce or commingle reservoir fluids from different pay zones in one well. A multiple zone completion can be divided into two parts, which are single string completion and multiple string completion. Single String Completion o This completion type consists of a single tubing string in a well. o Packers are set above each pay zone in order to isolate fluid from each zone. o The packer isolate each pay zone to prevent corrosion in the production casing due to the reservoir fluid. Multiple String Completion o This type of completion consists of two or more tubing strings in a well. o This has the ability to produce and inject into different pay zones simultaneously. o This is however very expensive to install. PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 20  TOPIC 5: PRODUCTION Block valves are also required to OPERATIONS AND FACILITIES perform regular maintenance on the choke. SUBSEA DEVELOPMENT PROCESS: SUBSEA HARDWARE Xmas Tree Introduction The fluids produced from wells are usually directed through flow lines and manifolds (gathering system) to a central location for processing and treatment. Manifold When the production of two or more wells is commingled in a central facility it is necessary to install a manifold to allow the production of the wells into the common production line or the well test line Wet Tree PROCESS DESIGN Flow Diagram Schemes of flow charts are commonly used to present details of the process. It is very important to understand the symbol convention used in those charts Design of Equipment depends on Physical Properties, Phase Behavior and Flow of Hydrocarbon Fluids. Well Head Physical Properties affecting The gathering system begins at the equipment design are: vapor pressure, wellhead. density, molecular weight, viscosity, The wellhead should include at least surface tension, composition and one choke used to control the well gas/liquid volumes. production. Phase Behavior is the change in If the upstream pressure is too high it is relationship between phases at various recommended to use a positive choke conditions. in series with an adjustable choke. In Fluid Flow properties affecting case the adjustable choke fails, the transmission system design are: positive choke keep the production viscosity and type of flow limited. An automatic shut-down valve can Physical Properties quickly interrupt production in case of Physical properties an event. o Density o Viscosity PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 21  o Formation volume factor Separation is required - gas and liquid o Compressibility require different processing methods. o Thermal expansion Separators are classified by physical o Surface tension shape, function or number of phases Need to predict pressure-volume- they separate. temperature (PVT) behavior of gas to o Separator – separate a estimate its properties combined liquid-gas flow Techniques used to predict PVT  Two-phase – gas and behavior are liquid separation o Equation of State (EOS)  Three-phase – gas, liquid o Corresponding States Principle and water separation o Empirical Correlations Fluid Flow Transport properties of oil and gas are significant in the design of equipment and flowlines o Viscosity - indicates fluids resistance to flow o Reynold's number - used to identify flow regime o Scrubber: Handles stream with o Laminar Flow exist at Re < 2000 unusually high Gas-Liquid o Turbulent Flow exist at Re > Ratios (GLR) 4000 o Water knockout: Separates free water. o Filter: Removes solids from gas/liquid stream. Vertical Separator Advantages o Liquid level and fluids control not critical o Easier and cheaper to design for surge capacity o Can handle solids with certain SEPRATION SYSTEM design o Easier to clean Basic Separation Disadvantages o More expensive o Does not adapt to skidmounted assemblies well o Requires larger diameter for same gas capacity. PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 22  Gas Separation System Gas and condensate flow from wellheads to the 3- phase production separator which separate water from the condensate and gas Gas is then sent to the glycol dehydration system, condensate to Horizontal Separator condensate Flash Tank and produced Advantages water to skimmer o Less expensive Produced gas is dried by contacting it o More adaptable to skid- with Triethylene – Glycol (TEG) liquid mounting Condensate from Flask Tank is passed o More available area for settling to Coalescer which allow nearly total o More adaptable to removal of remaining produced water accommodate heating coils or WATER TREATMENT sand jets o Can more effectively handle Two primary needs for water processing: foamy crude Disadvantages Disposal o Has less liquid surge capacity o Treatment of produced water o Liquid level control is more separated from oil and gas prior critical to disposal in an environmentally acceptable manner Multistage Separation Injection o Cleaning of source water from Oil and gas separation carried on in rivers or sea before wellbore several stages at successively lower injection in EOR projects to pressures. minimize zone plugging and The more stages of separation the maintain high injection rates fluids go through the more perfect the The contents of an oil reservoir may be overall separation will be. considered as consisting of three major Separation efficiency increases components – gas, crude oil and water. resulting in higher percentage of Of these three, gas and oil are saleable recoverable liquids. products, whereas water unless used for injection purposes, is a WASTE PRODUCT. The water, separated from the oil and gas in the platform separation trains, is known as PRODUCED WATER. PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 23  Before Produced Water can be either o Hydraulic Lift disposed of into the sea or used for o Hydraulic Jet injection purposes it requires treatment. o Electric Submersible Pump CRUDE & GAS STORAGE Major goals in providing clean product storage: o To furnish sufficient storage volume to minimize production operations down-time. o To prevent volumetric loss or quality degradation while product is in storage Water collected from processing o To avoid pollution. facilities contains: Factors governing selection of storage o Suspended oil droplets mode are: o Dissolved gases o Economic considerations o Entrained solids o Safety considerations Selected treatment and disposal o Pollution Control. method determines: Economic considerations: o Water quality target at minimum o Unit cost of storage and cost and associated facilities o Satisfies applicable rules, o Operating and maintenance regulations or laws. costs o Capability of future expansion PRODUCTION SUPPORT FACILTIES o Cost of land Artificial Lift System o Oil conservation and vapour prevention Completed producing wells will usually Safety considerations: produce fluids from Wellbore to the o Proximity to property line. surface by means of natural reservoir o Spacing requirements. energy. o Prevention of hydrocarbon Artificial lift is supplemented into well release to the atmosphere. tubing pressure during their Economic o Vapour pressure and other Life in order to obtain maximum physical properties of the recovery of oil for maximum profit product to ensure safe storage. before its Economic Limit of producing o Dike (or Dyke) wall life is reached. requirements. Notable exceptions are wells o Pressure vacuum relief valves. completed in a prolific water drive reservoir where wells may continue to Tank Types Storage flow until as much as 100 % saltwater production is obtained. The usual experience is that a well will require some means of artificial lift. Example: o Reciprocating Rod Lift o Progressive Cavity Pump o Gas Lift o Plunger Lift Non-Conventional Storage PEB1012/PDB1012: Introduction to Oil and Gas Industry and Sustainable Development | Compiled by Wayne 24 CRUDE & OIL EVACUATION Rotating Equipment Transfer mechanical energy to a process fluid or convert the fuel energy (chemical energy) to shaft work. Two basic categories: o Driven Equipment – pumps, compressors, generator o Prime Movers – reciprocating Metering engines, gas turbine, electric motor, steam turbine Fluid measurement commonly called A rotating equipment installation metering consists of driven equipment connected Purpose of metering to a prime mover through a coupling or o Contractual requirement a gear box. o Production planning Pumps: o Product quality control o A equipment device that applies o Process control mechanical energy to fluid. o Safety Accuracy o Well testing – deviations less than 5% acceptable o Custody transfer – deviations of 0.5% is the maximum allowed. o Dependent on two factors – repeatability and accurate determination of correction factors Compressors: Pipeline Pigging o Used for compressing natural gas from separators for fuel and Reason for pigging sales, gas pipeline transmission,