UpstreamOil&GasOverview

SteveBedford
C.Eng,FIMMM,Pet&DrillDiv.Chairman
WellFunctionalManager NorthSeaRegion
BPAberdeen,Scotland

DrFrankGordonKirkwood
C.Eng,FIMMM,Eur.Ing
IndependentOilIndustryAdvisor(BPRetiree)
BelizeCity,BelizeCA

IainMorgan
PerformanceAnalyst NorthSeaDrilling&Completions
KELTEC/BPAberdeen,Scotland

April2012

Contents

WhatisNeededtoHaveAnOilfield?
HowDoWeFindOilfields?
Seismic
TypesofWells
WellDrilling
TypesofRigs
CasingandCementing
WellControl
Evaluation
OilinPlaceandReserves
OilFieldDevelopment
Economics
Environment
Employment

WhatisNeededtoHaveanOilfield?

SourceRock

Late-moving
salt

(toCreatetheOil)
TRAP

StructureandSeal
(toTraptheOil)

RESERVOIR

SEAL

GoodReservoirRock
(toAllowustoProduce)
MIGRATION

Post
migration
trap

SOURCE

SourceRock
PreservationofOrganicmatter
NeedsBurial/Heat
Oil 110130C

2.5 3.5km

Gas >150C >4km

CommonSourceRocksCoal,limestone
andshale

TypesofRocks
What Are Rocks?
A rock is defined as an aggregate of mineral grains, which means that rocks are
a bunch of mineral grains all stuck together.
The Three Rock Types:
Igneous

Sedimentary

Igneous rock is any of various

crystalline or glassy,
noncrystalline rocks formed by
the cooling and solidification of
molten earth material
(magma).
Examples: Basalt, Granite and
Pumice

Sedimentary rock is a type of

rock that is formed by
sedimentation of material at the
Earth's surface and within
bodies of water.
Examples: Sandstones,
Limestone and Shale
[main rock type for oilfields]

Metamorphic

Metamorphic rock is the result

of the transformation of an
existing rock type, when
subjected to heat and
pressure.
Examples: Marble, Quartzite
and Slate

SealandReservoir
Seal(CapRock)
VerySmallPores
Strength
MudStones/
Evaporites

Reservoir
Porosity
Permeability
Sandstoneor
Limestoneare
MostCommon
6

HowDoWeFindOilfields?
OilSource
FindNaturalSeeps
StudyOtherWells
UnderstandtheGeology
[GeologicalTime=millions
ofyears]

Seal
SeismicSurveys

Reservoir
DrillaWell

SeismicSurveying Offshore

SeismicDataRecorded
[Showsrockstructure
Underground]

SeismicSurveys TransitionZone/Onshore

TransitionZoneSeismic
[BetweenOffshoreandOnshore
verydifficult]

OnshoreSeismic

TypesofWells
Exploration
- sometimes called a wildcat well, are drilled to probe the earth to determined
whether oil or gas are present

Appraisal
- are drilled to determine the extent of a field or the amount of area it covers,
once that field has been discovered

Development wells/Production
- are drilled in a discovered and appraised field to exploit the hydrocarbons.

PartsofaDrillingRig

TheMudSystem
Mudisimportantasitisusedto:
Controlthewellpressure
Coolthedrillbit
Carrycuttingsoutofthehole

TypesofRigs OffshoreMobileRigs(1)

DrillingBarge

[1030ftwater]

JackupRig

[30200ftwater]

TypesofRigs OffshoreMobileRigs(2)

Semisubmersible

[2005000ftwater]

Drillship

[10008000ftwater]

TypesofRigs OffshoreFixedRigs

OffshorePlatformRig

TypesofRigs Landrigs

TruckMounted
Modular/
Containerised

HydraulicHoist

HoleSectionTypesandCasing
Conductor:structuralloads
SurfaceCasing:isolationofsurface
formations,sectiontypicallydrilledwith
diverteronplatform
IntermediateCasing:Isolationof
pressure/problemzonesabovereservoir

ProductionCasing:Willseeproduction
loads;completionwillberuninsidethis
string
Completion:Runacrossreservoir,typically
loweranduppersectionstocarry
hydrocarbonstosurface
17

Cementing

18

WellControl

Pressure Ratings
5,000 psi
10,000 psi
15,000 psi

AccumulatorBank

BlowOutPreventer
BOPstack

19

NoWellControl BlowOut

10th August 2004 - GSF Adriatic IV Jack-Up ENI Operated - Temsah Gas field, Mediterranean Sea, Egypt

20

Evaluation
Mud Logging
and
LWD/MWD

Coring

Electric
logging

Drill Stem
Testing (DST)
21

OilfieldDevelopment
First - Some Terms
Oil in Place (million barrels) - How much oil is in the ground and where it is
Recovery Factor (%) - How much of the oil in the ground we expect to recover
Production Rate (Barrels per day) - How much oil we produce on any given day
Reserves (million barrels) How much oil we expect to recover over fieldlife

Field Development
-Development wells
-Production facilities
-Pipelines
-Oil Storage Terminals and Tanker Shipment

DifferentTypesofFieldDevelopment
LandRig

Fixed
Platform

Jackup

Semi
Submersible

FPSO

Tension
Leg

23

DirectionalDrilling

OnLand:
Surfaceconstraintdue
tolandowner,natural
event,topography
Horizontal

Offshore:
Savedevelopmentcost
Horizontal
ExtendedReach
MultiLateral

24

Completions XmasTrees

Onshore/PlatformTree

SubseaTree
25

OnshoreProduction

26

OffshoreProduction

FloatingProductionUnit(FPU)
FloatingProductionStorageOffloadingVessel(FPSO)

27
FixedPlatformProduction

OffshoreProduction SubseaSystems

28

OilfieldProductionProfiles
Offshore profile has a rapid build up
as wells are often pre-drilled
and a plateau of several years
to optimise the usage of the
facilities capacity

Onshore profile has a slower build up

As well are drilled and put on
production immediately. It also has a
higher peak and a shorter plateau
period as onshore facilities cost less
And are more flexible

OilfieldEconomics Cashflow
+ Revenue
OilSales

OperatingCosts
FieldOperatingCosts
TransportationCosts

CapitalExpenditure
GovernmentTake(RoyaltyandTaxes)
= Cashflow

OilfieldEconomics
GovernmentTake
DifferentTaxStructures:
TaxandRoyalty
ProductionSharing
ServiceAgreement
GovernmentParticipation

ExtractfromanArticleHigherPricesLowerGovernmentTake? ByDanielJohnston
Adapted(andupdated)fromhiscolumnforthePetroleumAccountingand
FinancialManagementJournal, Fall/Winter2004,Vol.23,No.3,pp.98104.

OilEnvironmentalImpact

SeismicSurveys:

LoudNoises/Explosions/Airguns:PotentialDamageto
Animals,Fish,MarineMammalsandScubaDivers

ExplorationWellDrilling:
RiskofContaminationofAcquifersUnderground
RiskofLossofWellControlandOilSpills
IndustrialDischargestoLandorSea
DrillingMudandCuttingsDisposal

OilDevelopmentandProduction:
DredgingPipelines
BuildingFacilities
WellDrilling(withRisksasAbove)
LongTermIndustrialDischarges
PipelineLeaks
TankerOilSpills

OilfieldEmploymentImpact
SkilledPositions
PetroleumEngineer
Geologist
Geophysicist
Chemist
Mudlogger
ElectricLogger
SeismicAcquisitionSpecialist
Surveyor
Toolpusher
MarineSuperintedent
Driller
Derrickman
Roustabout
Consultant
Accountant&Bookkeeper
LandAgent
Managers&Supervisors
ComputerProgrammer&Technician
HSEEngineer
Electrical,InstrumentationandMechanicalEngineer
ProjectEngineer
PipelineFabricator/Welder

SemiSkilledPositions
Roughneck
CraneOperator
WirelineOperator
WellTestOperator
ProductionOperator
Driver
SeismicOperator
Welder
Draftspeople
LogisticsCoordinator
Cateringandhousekeepingstaff
StoremanandMaterialsCoordinator
Medics/nurses
FirecrewandEmergencyResponsePersonnel
SecurityGuards

ThankYouforListeningAnyQuestions?