Oil Exploration and Production

Oil Exploration and Production

Birth of the Oil Industry 

In the United States, during the first half of the 19th century, people collected “rock oil” (later called petroleum, from the Latin words petra, meaning rock, and oleum, meaning oil) at seeps and used it to grease wagon axles and to make patent medicines. But such oil was rare and expensive. In 1854, George Bissel, a New York lawyer, came to the realization that oil might have broader uses, particularly as fuel for lamps, to replace increasingly scarce whale oil. Bissel and a group of investors contracted Edwin Drake, a colourful character who had drifted among many professions, to find a way to drill for oil in rocks beneath a hill near Titusville, Pennsylvania, where oily films floated on the water of springs. Using the phony title “Colonel” to add respectability, Drake hired drillers and obtained a steam-powered drill. Work was slow and the investors became discouraged, but the very day that a letter arrived ordering Drake to stop drilling, his drillers found that the hole, which had reached a depth of 21.2 m, had filled with oil. They set up a pump, and on August 27, 1859, for the first time in history, pumped oil out of the ground. No one had given much thought to the question of how to store the oil, so workers dumped it into empty whisky barrels. This first oil well yielded 10 to 35 barrels a day, which sold for about $20 a barrel (1 barrel equals 42 gallons). Within a few years, thousands of oil wells had been drilled in many states, and by the turn of the 20th century, civilization had begun its addiction to oil. Initially, most oil went into the production of kerosene for lamps. Later, when electricity took over from kerosene as the primary source for illumination, gasoline derived from oil became the fuel of choice for the newly invented automobile. Oil was also used to fuel electric power plants. In its early years, the oil industry was in perpetual chaos. When “wildcatters” discovered a new oil field, there would be a short-lived boom during which the price of oil could drop to pennies a barrel. In the midst of this chaos, John D. Rockefeller established the Standard Oil Company, which monopolized the production, transport, and marketing of oil. In 1911, the Supreme Court broke down Standard Oil into several companies including Exxon (Esso), Chevron, Mobil, Sohio, Amoco, Arco, Conoco, and Marathon some of which have recombined in recent decades. Oil became a global industry governed by the complex interplay of politics, profits, supply, and demand. 

The Modern Search for Oil 


Wildcatters discovered the earliest oil fields either by blind luck or by searching for surface seeps. But in the 20th century, when most known seeps had been drilled and blind luck became too risky, oil companies realized that finding new oil fields would require systematic exploration. The modern-day search for oil is a complex, sometimes dangerous, and often exciting procedure with many steps. Source rocks are always sedimentary, as are most reservoir and seal rocks, so geologists begin their exploration by looking for a region containing appropriate sedimentary rocks. Then they compile a geologic map of the area, showing the distribution of rock units. From this information, it may be possible to construct a preliminary cross section depicting the geometry of the sedimentary layers underground as they would appear on an imaginary vertical slice through the Earth.

To add detail to the cross section, an exploration company makes a seismic-reflection profile of the region. To obtain a seismic profile, a special vibrating truck or a dynamite explosion sends seismic waves (shock waves that move through the Earth) into the ground. The seismic waves reflect off contacts between rock layers, just as sonar waves sent out by a submarine reflect off the bottom of the sea. Reflected seismic waves then return to the ground surface, where sensitive instruments (geophones) record their arrival. A computer measures the time between the generation of a seismic wave and its return, and from this information defines the depth to the contacts at which the wave reflected. With such information, the computer constructs an image of the configuration of underground rock layers and, in some cases, can “see” reserves of oil or gas. 

Drilling and Refining 


If geological studies identify a trap, and if the geologic history of the region indicates the presence of good source rocks and reservoir rocks, geologists make a recommendation to drill. (They do not make such recommendations lightly, as drilling a deep well may cost over $50 million.) Once the decision has been made, drillers go to work. These days, drillers use rotary drills to grind a hole down through rock. A rotary drill consists of a pipe tipped by a rotating bit, which is a bulb of metal studded with hard metal prongs. As the bit rotates, it scratches and gouges the rock, turning it into powder and chips. Drillers pump “drilling mud,” a slurry of water mixed with clay and other materials, down the center of the pipe. The mud flows down, past a propeller that rotates the drill bit, and then squirts out of holes at the end of the bit. The extruded mud cools the bit head, which otherwise would heat up due to friction as it grinds against rock, then flows up the hole on the outside of the drill pipe. As it rises, the mud carries “rock cuttings” (fragments of rock that had been broken up by the drill bit) up and out of the hole. Mud also serves another very important purpose its weight counters the pressure of the oil and gas in underground reservoir rocks. By doing so, it prevents hydrocarbons from entering the hole until drilling has been completed, the hole has been “finished” (by removing the drill pipe and sealing the walls of the drill hole with concrete), and the hole has been capped. Were it not for the mud, the natural pressure in the reservoir rock would drive oil and/or gas into the hole. And if the pressure were great enough, the hydrocarbons would rush up the hole and spurt out of the ground as a gusher or blowout. Gushers and blowouts can be disastrous, because they spill oil onto the land and, in some cases, ignite into an inferno. Early drilling methods could produce only vertical drill holes. But as technology advanced, drillers developed methods to control the path of the drill bit so the hole can curve and become diagonal or even horizontal. Such directional drilling has become so precise that a driller, using a joystick to steer the bit, and sensors that specify the exact location of the bit in 3-D space, can hit an underground target that is only 15 cm wide from a distance of a few kilometres. Drillers use derricks (towers) to hoist the heavy drill pipe. To drill in an offshore hydrocarbon reserve, one that occurs in strata beneath the continental shelf, the derrick must be constructed on an offshore-drilling facility. These may be built on huge towers rising from the sea floor, or on giant submerged pontoons. Using directional drilling, it’s possible to reach multiple targets from the same platform. On completion of a hole, workers remove the drilling rig and set up a pump. Some pumps resemble a bird pecking for grain; their heads move up and down to pull up oil that has seeped out of pores in the reservoir rock into the drill hole. You may be surprised to learn that simple pumping gets only about 30% of the oil in a reservoir rock out of the ground. Thus oil companies may use secondary recovery techniques to coax out more oil (as much as 20% more). For example, a company may drive oil toward a drill hole by forcing steam into the ground nearby. The steam heats the oil in the ground, making it less viscous, and pushes it along. In some cases, drillers create artificial fractures in rock around the hole by pumping a high-pressure mixture of water, various chemicals, and sand into a portion of the hole. This process, called hydrofracturing (or “fracking”) creates new fractures and opens up pre-existing ones. The sand left by the fracturing fluid keeps the cracks from closing tightly, so they remain permeable. The fractures provide easy routes for the oil to follow from the rock to the well. Once extracted directly from the ground, “crude oil” flows first into storage tanks and then into a pipeline or tanker, which transports it to a refinery. At a refinery, workers distil crude oil into several separate components by heating it gently in a vertical pipe called a distillation column. Lighter molecules rise to the top of the column, while heavier molecules stay at the bottom. The heat may also “crack” larger molecules to make smaller ones. Chemical factories buy the largest molecules left at the bottom and transform them into plastics.

Where Does Oil Occur? 

Reserves are not randomly distributed around the Earth. Currently, countries bordering the Persian Gulf contain the world’s largest reserves in 25 supergiant fields. In fact, this region has almost 60% of the world’s reserves. Reserves are specified in barrels (bbl); 1 bbl 42 gallons 159 liters. Why is there so much oil in the Middle East? Much of the region that is now the Middle East was situated in tropical areas between latitude 20n south and 20n north between the Jurassic (135 Ma) and the Late Cretaceous (65 Ma). Biological productivity was very high in these tropical regions, so the muds that accumulated there were very organic rich and lithified to become excellent source rocks. Thick layers of sand buried the source rocks and eventually became porous sandstones that make excellent reservoir rocks. Later, mountain-building processes folded the layers into large anticlines, which are excellent traps. The Middle East is not the only source of oil. Reserves also occur in sedimentary basins formed along passive continental margins, such as the Gulf Coast of the United States and the Atlantic Coasts of Africa and Brazil, as well as in intracratonic and foreland basins within continents.

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