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Oil Sector
Citation preview
Understanding the Oil & Gas Sector
Dharminder Dargan – Principal Cyber Security Architect Houston, Texas
0
20
40
60
80
100
120
1970 1975 1980 1985 1990 1995 2000 2005 2010
Oil Production CapacityO
il R
ate
MM
bd
World Production Capacity
World Demand
Source: BP Statistical Review, IEA WEIO, Salomon Smith Barney
ExcessCapacity
Oil Demand vs Production Capacity
E&P
Expe
nditu
res
$ Bi
llion
Oil Price $/B
E&P Expenditure
0102030405060708090
100110120
1970 1975 1980 1985 1990 1995 2000 2005 2010020406080100120140160180200220240
ExcessCapacity
Oil
Rate
MM
bd
Oil
Pri
ce $
/bb
l
WorldCapacity
Projected Demand growthat 1.6% per year
Source: BP Statistical Review, IEA Oil Market Annual Summary, OPEC Secretariat, Salomon Smith Barney. Data Revised January 2006.
WorldDemand
Source: BP Statistical Review, IEA WEIO, Salomon Smith Barney
Terminology Check…
• SCADA = Supervisory Control and Data Acquisition Systems
(these open and close valves, read flow, and give input into companies’ accounting systems)
• BTU = British Thermal Unit = Caloric Value = how natural gas is measured
0
100
200
300
400
500
600
700
0.4
5.9
47.3
17.4
28.9
%Share
Qu
ad
rillio
n B
tu
Nuclear
38.9
21.6
26.1
5.96.5
%Share
Coal
Hydro, Geothermal, Solar
24.4
6.3
7.0
%Share
22.1
25.9
%Share
15
3.5
8.1
47.5
0
600
700
0.4
5.9
47.3
17.4
28.9
%Share
%Share
38.9
21.6
26.1
5.96.5
%Share
%Share
%Share
Coal
Hydro, Geothermal, Solar
%Share
%Share
%Share
25.9
%Share
%Share
%Share
15
3.5
8.1
47.5
0
600
700
0.4
5.9
47.3
17.4
28.9
%Share
%Share
38.9
21.6
26.1
5.96.5
%Share
%Share
%Share
Coal
Hydro, Geothermal, Solar
6.8
%Share
%Share
%Share
25.9
%Share
%Share
%Share
15
3.5
8.1
47.5
0.4
5.9
47.3
17.4
28.9
%Share
%Share
1970 1988-2001 2001 2010 20201970 2010 20201970 2010 2020
38.9
21.6
26.1
5.96.5
%Share
%Share
%Share
%Share
Coal
38.7
23.7
7.0
%Share
%Share
%Share
%Share
22.7
Oil
Gas
%Share
%Share
%Share
%Share
15
3.5
8.1
47.5
%Share
%Share
15
3.5
8.1
47.5
Economides & Oligney: World Energy Consumption
Poll
• Question: Which term is used to refer to the Exploration and Production part of the oil cycle?
• Multiple Choice Answers:- Downstream
- Transcontinental
- Upstream
- Midstream
Where does Oil come from?
Oil Exploration & Extraction• Oil is a fossil fuel formed from the remains of
tiny plants and animals (plankton), 10 million-600 million years ago, which fell to the bottom of the sea.
• There, little or no oxygen was present, allowing microorganisms to break down the remains into carbon-rich compounds that form organic layers. The organic material mixed with the sediments to form fine-grained shale, or source rock.
• As the rocks layer, they exert extreme heat and pressure to distill the organic material into crude oil and natural gas.
• The oil then flows from the source rock and accumulates in thicker, more porous limestone or sandstone known as reservoir rock.
• When the earth moves the oil and natural gas is trapped in reservoir rocks, which are between layers of impermeable rock, or cap rock– usually granite or marble.
• The whole process takes millions of years.
Source:Howstuffworks.com
Finding Oil
• Government and Oil companies usually assign finding oil to contracted geologists
• The Geologists make an average of $100,230 making it an incentive to find new reserves
• Oil geologists examine surface features, surface rock, reservoir rock, entrapment, satellite images, sensitive gravity meters and magnometers. They can also detect the smell of hydrocarbons using electronic noses called sniffers.
• The most common technique for finding reserves is seismology which uses shock waves that interpret waves reflected back to the surface.
• Despite all the technology, modern oil exploration methods are only 10 percent successful.
Once the Site is Selected
Getting the land ready
• Area surveyed to determine boundaries.• Environmental studies done.• Land cleared and access roads built.• Water is drilled if no natural sources available.• A reserve pit is dug to dispose of rock cuttings and mud. It is lined with plastic to
“protect” the environment only if the area is considered to be “ecologically sensitive.”
Making way for the Rig
• Holes dug to make way for the rig and main hole• A rectangular pit (cellar) is dug around the location of the drilling hole. (This provides
a workspace.)• Crew drills a main hole • Additional holes dug to the side to store equipment
Source:Howstuffworks.com
Setting Up the Rig
Once the land is ready, several holes are dug to make way for the rig and main hole. A rectangular pit called a cellar is dug around the location of the actual drilling hole. The cellar provides a workspace around the hole. The crew then drills a main hole. Here’s how a rig is set up.
Drilling
• Drill bit, collar and drill pipe placed in the hole.
• Kelly and turntable attached; drilling begins.• As drilling progresses, mud is circulated
through the pipe and out of the bit to float the rock cutting out of the hole.
• New sections (joints) of drill pipes added as the hole gets deeper.
• Remove (trip out) the drill pipe, collar and bit when the pre-set depth (anywhere from a few hundred to a couple thousand feet) is reached. Photo courtesy Institute of Petroleum
Directional Drilling
Confirming the Presence of Oil
• After the pre-wet depth is reached, the workers run and cement the casing –pipe sections into the hole to prevent it from collapsing.
• Drilling continues in stages. • When the rock cuttings from the mud
reveal the oil sand from the reservoir rock, they may have reached the final depth.
• Then, they remove the drilling apparatus from the hole and perform several tests to confirm the presence of oil.
• These tests are Well Logging, Drill-stem Testing, and Core Samples.
Extracting the Oil• Once the well is completed, the operators
must start the flow of oil into the well. • For limestone reservoir rock, acid is pumped
down the well and out the perforations. • For sandstone reservoir rock, a special
blended fuel containing proppants is pumped down the well and out the perforations.
• The pressure from this fluid makes small fractures in the sandstone that allow oil to flow into the well, while the proppants hold these fractures open.
• Once the oil is flowing, the oilrig is removed from the site and production equipment is set up to extract the oil from the well.
Source:Howstuffworks.com
Extracting Oil
Source:Howstuffworks.com
Electric SubmersiblePump Systems
Production Logging
Oilfield Chemicals
Fishing Services
Workover Services
Progressing Cavity Pumps
Drill Bits
Directional Drilling
Drilling Fluids
Drilling Optimization
LoggingWhile Drilling
FluidSampling
IntegratedFormationEvaluation
Wireline
Logging
Coring
PerforatingIntelligent Well
Systems
ExpandableCompletions
FlawlessExecution
Sand ControlCompletions
PumpingServices
MultilateralSystems
Oilfield ServicesD
rilli
ng
Com
ple
tion
Pro
duct
ion
Form
ati
on E
valu
ati
on
Oil Refining - Cracking
• Further chemical processing is needed to make products such as gasoline of various grades, lubricating oils, kerosene, jet fuel, heating oil, chemicals for plastics and other polymers. It is possible to change one fraction into another through these three methods; cracking, unification, and alteration.
• Cracking takes large hydrocarbons and breaks them into smaller ones.
Oil Refining - Cracking
Poll
• Question: Which of these day-to-day activities is not touched by oil at some point?
• Multiple Choice Answers:- Air Travel
- Dry Cleaning
- Driving a Toyota Prius/Hybrid Car
- Paddling a Wooden Canoe
Products Produced from Crude
Pipeline System Sample Map
CO2 Pipelines
CO2 Field
Terminals
Products Pipelines
Products Pipeline Terminals
Transmix Facilities
Natural Gas Pipelines
Natural Gas Storage
Natural Gas Plants
Indicates # of Facilities(2,3,8)
NGPL
NGPL Storage
Natural Gas Pipelines
Natural Gas Storage
Gas-Fired Power Plants
Retail Natural Gas Division
2
2
2
4
8
2
2
2
2
KMCO2
PACIFIC COCHIN
PACIFIC
PACIFIC
CALNEV
NORTH
PLANTATION
CFPL
KMIGT
KMTP
KM TEJAS
2
NGPL
3
2
4
2
2
2
MONTERREY
2
Source: Kinder Morgan
Oil Exploration
Oilfield Development
Crude Oil Extraction
Refinery
Gasoline Retailing
Transportation / Storage
Downstream Distribution
Oilfield Data
• Pipeline Data, Operation, Security
• Well-head Data
• Seismic Data • Wireline and Logging Data
Land Land
streamer
OBC
land cable
Deep Water Shallow Water
Seismic Data Acquisition Overview
Seismic Data Utilization Overview
Well Mapping
Real-Time Decision3D Map creation
Visualization
Remote Well Operations & Completions
Onshore Facilities
Decision Centers
Offshore Facilities
Source: Peter Breunig (CVX)
Real-time Oil & Gas Operations
Integrated Global Operations
External Experts
Control Room Offshore
Service Company’sOnshore Operation Center
Decision Center
RemoteCollaboration
RoomRemote Monitoring
Business Challenges facing Oilfield Sector
1. Maintain high production while prices are high.2. Manage production decline at existing sources.3. Manage/effectively use huge amounts of data (seismic, wireline etc.).4. Integrate/manage continuous data from multiple sources5. Optimize production operations with real-time decision support.6. Applying technologies effectively, and not “owning” technology.7. Direct support and close collaboration with the industry and partners working on
the projects internationally.8. Staying compliant with accounting, privacy, safety, and environmental laws in the
countries where they are working.9. Managing the growing shortage of skilled workers.10. Securing data and information in a world of contract employees and multiple
partners on every job.
CA as a Player in Oil and Gas
• EITM is highly relevant to the industry- Security Management
- Project & Portfolio Management
- Compliance Management
- Records Management
- Service Management
• Upcoming webcasts will drill into these solutions with a number of use cases
Further Reading / Reference
• U.S. Energy Information Administration: Oil Market Basics http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/oil_market_basics/default.htm
• UK Government Energy/Regulatory site – includes links to other useful sites http://www.dti.gov.uk/energy/statistics/index.html
• Society of Petroleum Engineers http://www.spe.org/spe-app/spe/index.jsp