By the end of this lesson, you should be able to:
To Read |
|
|
---|---|---|
To Do |
|
|
Note | You must score 100% on the Academic Integrity & Plagiarism Awareness Quiz and the Orientation Knowledge Quiz to unlock the remaining Canvas lesson modules. |
Please refer to the Calendar in Canvas for specific time frames and due dates.
If you have questions, please feel free to post them to the Course Q&A Discussion Board in Canvas. While you are there, feel free to post your own responses if you, too, are able to help a classmate.
The word “Petroleum” has its origin in the Greek words “petra” for “rock” and “oleum” for “oil”. Petroleum, or crude oil, is a naturally occurring liquid found in porous rocks (reservoirs) below the earth’s surface. It is an organic material comprised of hydrocarbon molecules (molecules formed by hydrogen and carbon atoms) with possible inorganic contaminates, such as nitrogen (N2), carbon dioxide (CO2), hydrogen sulfide (H2S), and others.
Crude oil is found in subsurface rock formations known as oil reservoirs. It is typically found in the presence of natural gas (associated natural gas). Associated natural gases are hydrocarbon gases that co-exists with the crude oil and may be present as: (1) gas dissolved in the crude oil (solution gas), (2) a distinct gas phase in contact with the crude oil (free gas), or (3) both. Natural gas may also exist with no crude oil present (non-associated gas) in natural gas reservoirs. In the context just described, the terms “associated gas” and “non-associated gas” refer to the association of the gas with a liquid hydrocarbon phase. This is illustrated in Figure 1.01.
The role of the International and U.S. Domestic Oil and Gas Industries is to perform the safe, environmentally sound, and efficient discovery, extraction, transport, refining, and marketing of petroleum and natural gas and their refined products. Petroleum and natural gas engineers typically work to extract the crude oil and natural gas from the subsurface reservoirs and also have a secondary role supporting exploration geologists in the discovery of new oil and gas reservoirs.
The oil and gas industry can be classified into three broad segments: the upstream, the mid-stream, and the downstream sectors of the industry. This classification system is based on the direction in which crude oil and natural gas flow from the subsurface reservoirs (upstream sector) to the refineries and the markets (downstream sector) and, eventually, the consumers.
The upstream sector of the oil and gas industry is responsible for the discovery, extraction, and field processing of the crude oil and natural gas. As such, petroleum and natural gas engineers typically work in this sector of the industry. In this sector, petroleum and natural gas engineers work with geologists, geophysicists, other engineering disciplines (e.g., mechanical and chemical engineers), and other petroleum professionals (e.g., petrophysicists, paleontologists, etc.) to extract the crude oil and natural gas and to process the produced fluids to the specifications required by the field export systems (pipelines, tanker ships, etc.).
The mid-stream sector of the oil and gas industry is responsible for the export of the crude oil and natural from the field locations and for the transport of these products to the refineries. These refineries may be continents away from the original oil and gas fields. This transport process may occur onshore using pipelines, trains, or tanker trucks; over oceans and seaways using large tanker ships; and on inland lakes and waterways using smaller barges.
The downstream sector of the industry is responsible for the storage, refining, and marketing of the refined products to the consumers. Storage of the oil and gas may occur on the surface in “tank farms,” underground in old, abandoned oil and gas reservoirs, or in engineered, subsurface formations (e.g., hollowed out salt caverns). Storage may be required for crude oil as an unrefined inventory awaiting processing in a refinery or for storage as a refined product during seasonal lows in demand caused by the weather (e.g., heating fuels). Refining is the process of converting raw crude oil and natural gas into products in demand by industrial or individual consumers.
The international and U. S. domestic oil and gas industries form an integral part of the global economy. Oil and gas production influence all industrial sectors and geographical regions of the world, either as producers, consumers, or both. Figure 1.02 shows the energy mix in the United States by major primary energy source in 2015.
Source | Percent |
---|---|
Petroleum | 36.35 |
Natural Gas | 29.10 |
Coal | 16.04 |
Nuclear | 8.57 |
Biomass | 4.83 |
Hydroelectric | 2.45 |
Wind | 1.87 |
Solar | 0.57 |
Geothermal | 0.23 |
Global energy consumption (Figure 1.03) has a comparable energy mix as in the U.S..
Source | Percent |
---|---|
Petroleum | 32.89 |
Natural Gas | 23.40 |
Coal | 29.16 |
Nuclear | 4.43 |
Biofuel | 0.57 |
Hydroelectric | 6.78 |
Wind | 1.45 |
Solar | 0.43 |
Other | 0.89 |
Besides providing fuels to run automobiles, planes, ships or machinery, the primary energy sources shown in Figures 1.02 and 1.03 are also used to power electrical generation plants to provide secondary energy sources to consumers.
In addition to fuels, refined crude oil and natural gas provide other valuable products including kerosene for illumination, lubricants for machinery, butane and propane for recreational and industrial uses, asphalts for road construction, and feedstocks for the petrochemical industry. Figure 1.04 shows the typical product yield from a standard 42 gallon barrel of crude oil.
Product | Gallons |
---|---|
Gasoline | 19.5 |
Diesel/Home Heating Oil | 9.2 |
Kerosene-type Jet Fuel | 4.1 |
Heavy, Residual Fuel Oils | 2.3 |
Liquefied Refinery Gasses | 1.9 |
Still Gas | 1.9 |
Coke | 1.9 |
Asphalt and Road Oil | 1.3 |
Petrochemical Feedstocks | 1.2 |
Lubricants | 0.5 |
Kerosene | 0.2 |
Other | 0.3 |
The petroleum and natural gas engineering profession is normally divided into three major areas of specialization based on the tasks assigned to the engineer. These areas are: Drilling or Drilling and Completions (D&C) Engineers, Production Engineers, and Reservoir Engineers.
Drilling Engineers, or Drilling and Completions Engineers, are responsible for planning, designing, and executing the drilling operations of a well. Drilling a well may take several years to properly plan. This is because of the depths and quality of the steel tubulars (drill pipe, casing, and production tubing) that are required by the oil and gas industry. For example, a ten-well drilling campaign to a total depth of 12,000 ft per well in a high temperature, high pressure, highly corrosive environment will take several miles of high-grade steel tubulars which cannot be purchased “off-the-shelf” from steel manufactures. These items are “Long Lead Time” items in the well design and must be considered years in advance of the actual drilling operations. In fact, an aggressive drilling campaign in a single oilfield may exhaust the world’s supply of a particular steel grade for several years. Coordinating the design of the well with the suppliers of the well components is an integral part of the planning process performed by the drilling engineer.
During drilling operations, the drilling engineer must also determine the appropriate drilling fluids to use to allow for safe drilling operations and select the appropriate drill bits to use to allow for optimal drilling efficiency (cost, speed, etc.). The drilling engineer must also decide on the appropriate depths to set casing and the appropriate steel grades of the casing to protect both the wellbore and the environment (Casing is used to isolate the well from the various geologic rock formations and aquifers that a well encounters and to isolate the individual rock formations from each other.).
Once the wellbore has reached the predetermined total depth and the final casing string has been cemented in place, the drilling engineer works with the production engineer to implement the well’s completion. The well completion is the portion of the well that connects the wellbore to the reservoir. This aspect of the well design has many considerations in order to achieve the long-term objectives of the well. Important considerations of a completion design include: selecting the appropriate size and grade of the production tubing; determining the need to stimulate the reservoir (hydraulic fracturing, acidizing, etc.) to allow for economical production rates from the reservoir to the well, and selecting the appropriate artificial lift system (natural lift, pump, gas lift, etc.) to aid in “lifting” the produced fluids from the reservoir to the surface.
The role of the Production Engineer is to monitor individual wells or groups of wells to ensure that they are producing (or, in the case of injection wells, injecting) optimally. Over time, downhole equipment may fail, produced hydrocarbons fluids may deposit waxes or asphaltenes on downhole equipment and tubing, minerals in produced water may create a scale on downhole equipment and tubing, steel tubing may corrode or erode, etc. All of these phenomena can negatively affect the performance of the well. In addition, due to changing reservoir conditions, equipment and tubing sizes that were optimal at the beginning of production may be suboptimal at depleted reservoir conditions.
To monitor wells, production engineers may install permanent downhole sensing equipment to continuously observe well performance in real time. In addition, the production engineer may perform discrete tests on the well by sending monitoring tools down the well to observe well performance as a “snapshot in time.” These discrete tests can either be (1) well logs, where tools are sent downhole that measure properties of interest to the engineer such as flow rates, temperatures, internal tubing diameters etc., or (2) well tests, where pressure gauges are sent downhole, well rates are adjusted in a controlled, known manner, and the corresponding pressure responses are recorded and analyzed. The analysis of the pressure responses during a well test provides a valuable insight into the near-well performance of the reservoir.
If a problem is identified with the well, it is then up to the production engineer to determine the appropriate remedial actions to resolve the issue. These well remediations may take the form of simple “wireline workovers” or more complex “major rig workovers (MRWO).” In a wireline workover, all work is performed with tools lowered into the well at the end of an electrical cable (wireline). Using a wireline, perforations (connections to the reservoir) can be added, tubing plugs can be set or retrieved, packers (downhole equipment used to isolate reservoir zones) can be set or retrieved, valves can be opened or closed, etc. In a major rig workover, a drilling rig or specialized workover rig is moved on location above the well and is used to re-enter the well to retrieve the original tubing or completion equipment, cement off depleted reservoir zones (to establish zonal isolation), or to restimulate the well.
In addition to monitoring wells and performing well remediations, production engineers look after the artificial lift systems used in the well. Typical artificial lift systems include beam pumps (see Figure 1.05), downhole electrical submersible pumps (ESPs), or gas lift.
By the nature of their jobs, production engineers interact with oilfield service providers to ensure that the appropriate technologies are applied to optimize well production or injection.
While production engineers focus on individual wells or groups of wells, Reservoir Engineers attempt to optimize production of the reservoir as a whole. Reservoir engineers work with geologists, drilling engineers, and production engineers to ensure that the entire reservoir system is running optimally. Typical tasks performed by reservoir engineers include: working with geologists to determine the original-oil-in-place in the reservoir and identifying future well locations; identifying the drive mechanisms (the physical phenomena which cause the oil and gas to migrate to the production wells); estimating the reservoir reserves (volumes of oil and gas that can be technically and economically extracted from the reservoir), recommending the appropriate development plans for a reservoir (and recognizing when it is time to modify a plan); forecasting future production and injection rates from the reservoir in its entirety; and determining the need for applying Improved Oil Recovery (IOR) or Enhanced Oil Recovery (EOR) methods.
Typically, petroleum engineering students have the option to choose which of these areas of specialization they would like to undertake during their careers; however, the Law of Supply and Demand also works in the petroleum and natural gas engineering job market. For example, a company in need of the services of Production Engineers will hire engineers with this particular skill set. Consequently, some degree of flexibility among these three areas of specialization is required when searching for an entry-level position in the oil and gas industry.
The modern approach to crude oil and natural gas extraction is the Reservoir Management approach. Reservoir Management is a team based methodology in which all disciplines (geologists, drilling engineers, production engineers, reservoir engineers, and other petroleum professionals) work together toward the common goal of efficient, safe, and environmentally friendly production of oil and gas.
Current status and future challenges of Reservoir Management can be summarized with the Resource Triangle [1]. Figure 1.06 shows the current status of Reservoir Management in the Resource Triangle. In this figure, the easy-to-produce resources (crude oil and natural gas) are at the top of the triangle. These resources are characterized by good, high-quality reservoir rock (high storage capacity and ability to easily transmit fluids) which are saturated with highly mobile (easily flowing) fluids. The base of the triangle represents the more difficult-to-produce or yet to be discovered resources. While the resources at the base of the triangle are more difficult to find and extract, they can still be produced at higher energy prices (allowing for more capital to be spent to find, drill, and apply cutting-edge technologies for their extraction) or with improvements in current technology.
Figure 1.06 also illustrates the status of producing assets in known, mature basins. Due to the time-scales of oil and gas production, we are still producing from fields that were discovered in the early to mid-twentieth century. Consequently, some of the equipment installed in the field may be legacy equipment (then-current technologies) and all of the pre-production, baseline data for these fields were acquired using legacy data acquisition technologies. This is the situation in which many newly graduated petroleum and natural gas engineers may find themselves. Consequently, these engineers must be well versed in past, present, and emerging production technologies and analysis techniques.
The Resource Triangle can also be used to illustrate the future challenges in Reservoir Management, as in Figure 1.07.
Figure 1.07 shows the same “easy-to-produce” and “difficult-to-produce” resources as in Figure 1.06. All of these resources, including the “easy-to-produce” resources, have various challenges associated with them. It is the role of petroleum and natural gas engineers to devise cost-effective solutions to these challenges.
Typically, even in the best quality reservoirs, only one-third of the original-oil-in-place can be recovered using conventional production technologies (typically 30 – 35 percent recovery efficiencies). Recovery efficiencies for natural gas reservoirs are normally much greater (typically 65 – 85 percent recovery efficiencies). The remaining in-place oil and gas after the application of conventional production technologies, therefore, represents a significant target for additional recovery.
[1] Reference: MRS Bulletin: Factors That Will Influence Oil and Gas Supply and Demand in the 21st Century [8]
Improved Oil Recovery (IOR) and Enhanced Oil Recovery (EOR) Methods are methods used to target the resources not capable of being produced with conventional production methods. IOR is defined as any recovery method used to improve oil recovery above the use of non-stimulated, naturally-flowing vertical production wells (Please note that with this definition, each reservoir will have a different baseline because each reservoir will respond differently to the application of these wells). This baseline represents the simplest production technology available to the petroleum and natural gas engineer and was a common development option up to the 1960s – 1970s and often resulted in recovery efficiencies of less than ten percent.
This definition of IOR encompasses a wide variety of production technologies including additional vertical wells (infill drilling) or complex well designs (deviated, or slanted, wells; horizontal, or single-lateral, wells; multi-lateral wells), well stimulation (hydraulic fracturing and acidizing), artificial lift (beam pumps, ESPs, and gas lift), secondary recovery methods (waterflooding and gas flooding), and EOR (thermal recovery, miscible displacement, and chemical flooding).
This definition of IOR allows for the use of additional vertical wells for greater well coverage (infill drilling) than considered in the initial development plan or the use of more complex well designs to improve well performance from a single surface location. Figure 1.08 shows some of the more advanced well designs used in the current Reservoir Management. As discussed earlier, the design and execution of these complex wells is the task of the drilling engineer.
Well stimulation is an IOR technology that is used to clean well perforations and improve the flow capacity of the reservoir rock in the near-well vicinity. The two most common well stimulation methods are hydraulic fracturing and acidizing. Hydraulic fracturing, or frac’ing, refers to the high-pressure injection of a fracturing fluid, typically water (slickwater), gas, or gel, into a reservoir causing the rock to mechanically fail or fracture. Injection of the fracturing fluid is normally followed by the injection of a proppant slurry, composed of natural sand or man-made ceramic beads, used to prop-open the induced fractures once pressure is relieved after the well stimulation treatment. Hydraulic fracturing can be applied to most rock lithologies, including sandstones, carbonates (limestones and dolomites), coals, and shales.
Acidizing is a well technology that uses the injection of an acid solution into a porous reservoir to dissolve any residual drilling fluids or natural sediments in the well perforations and the near-well vicinity. These residual drilling fluids may impair fluid flow to the well. Several variations of the acidizing process are used to stimulate a well including: matrix acidizing where the acid solution is pumped into the reservoir below the fracture pressure (or parting pressure) to clean pores near the well and acid-fracturing where an acidic fracturing fluid is injected above the fracture pressure in order to simultaneously fracture the reservoir and dissolve the formation (creating flow channels linking the rock to the fracture). Matrix acidizing is typically used in sandstone and carbonate reservoirs; while acid-fracturing is used in carbonate reservoirs which are susceptible to breakdown by acid.
Artificial lift was discussed briefly and is defined as an IOR technology used to ”lift” reservoir fluids once they enter the well. Early in the life of a well, the natural pressure in the reservoir is great enough to overcome gravity and to push fluids to the well and up the well to the surface. This is referred to as natural flow or natural lift.
As pressure is depleted from the reservoir by the withdrawal of oil, gas, and water (comparable to letting the air out of a balloon), the natural energy in the reservoir can no longer overcome the weight of the produced fluids and cannot force them up the production tubing. At this point, the application of artificial lift is required to keep the well flowing. A second situation may also occur which requires the application of artificial lift. As oil and gas are produced from the reservoir, these fluids are often replaced by increasingly greater volumes of produced water. The produced water is a much heavier fluid than the oil and gas and the fluid column in the well may become too heavy to flow by natural means. When this occurs, artificial lift is required to continue to produce the well. As discussed earlier, the tasks of well stimulation and artificial lift fall to production engineers.
Secondary Recovery is an IOR process used for increasing the recovery efficiency of many oilfields. In this context, Primary Recovery refers to Reservoir Management processes which deplete the reservoir energy from the natural drive mechanisms associated with the reservoir. In secondary recovery, water or natural gas are injected into the reserve to provide an external source of reservoir energy. Waterflooding is the most common form of secondary recovery used for crude oil production.
The terms, Primary Recovery and Secondary Recovery, refer to the historical order in which oil production techniques were applied. Primary recovery was typically applied as a first stage of development to take advantage of the natural drive mechanisms in the reservoir; while secondary recovery was applied at a later stage of development to supplement the depleted natural drive mechanisms. Reservoir Engineers typically determine the design and timing of the secondary recovery operations. Most oil reservoirs require some form of secondary recovery to achieve recovery efficiencies in the range of 30 – 35 percent.
In Figure 1.07, Enhanced Oil Recovery (EOR), or Tertiary Recovery, is also applied to large reservoirs. EOR involves the injection of fluids into the reservoir, which aids in crude oil production by means other than simply supplying external reservoir energy. The baseline for EOR is the incremental production after primary and secondary production. Note that this definition of the baseline for EOR differs from that for IOR. As the terminology implies, “Tertiary Recovery” technologies were historically used after primary and secondary recovery.
The type of EOR technology to be applied to a given reservoir depends on the nature of the reservoir and the fluids that it contains: polymer solutions can be used to improve the efficiency of a waterflood; miscible fluids or surface active agents (surfactants, or soup solutions) can be injected to reduce capillary forces (one of the forces that entrap crude oil in the capillaries in the reservoir); or steam can be injected into heavy oil reservoirs to reduce the viscous forces (another force that entraps crude oil) required to displace the oil. Again, the design and timing of an EOR project typically fall to the reservoir engineer.
Figure 1.07 also illustrates a current trend in Reservoir Management: the use of “Smart Technologies.” Smart technologies are capable of sensing changing reservoir conditions and modifying production characteristics in real time to continuously improve reservoir performance.
The very base of the Resource Triangle, “Emerging Frontiers,” may sound somewhat exotic; however, the last “emerging frontier” in the oil and gas industry occurred in western Pennsylvania. This was the Shale Boom that began in the mid-2000s.
It was the application of hydraulic fracturing, in conjunction with the application of the more complex, multi-lateral well designs, which made shale reservoirs commercially viable. One such shale formation, the Marcelus shale, is a massive oil and gas bearing formation located in western Pennsylvania, Ohio, West Virginia, and New York. Oil and gas production from the Marcellus shale, along with the Barnett shale (Texas), Bakken shale (North Dakota), and the Eagle Ford shale (Texas) have significantly reduced the dependency of the United States on foreign energy sources during the last decade and is projected to continue to produce for decades to come. As with all aspects of energy production, the longevity of the shale boom will depend on future oil and gas prices.
Throughout history, the engineering profession has played a pivotal role in generating growth and improving the quality of life of society. Due to its very nature, the engineering profession requires strict ethical standards to continue providing this growth in sustained, principled manner. The National Society of Professional Engineers has codified these ethical standards into its Code of Ethics. This ethical code is provided in the following three links:
In light of Climate Change and Global Warming, one aspect of engineering ethics that is becoming more critical to the petroleum and natural gas engineering profession is environmental stewardship. Environmental stewardship refers to the use of conservation and sustainable practices to protect the environment. This is done by using modern best practices to:
In this lesson, we learned about the basics of the modern oil and gas industry. In particular, we learned that naturally occurring hydrocarbons exist in subsurface, porous rock formation called reservoirs. We also learned that these naturally occurring hydrocarbons can be found as liquids (crude oil) or as gases (natural gas).
In addition, we learned about the structure of the oil and gas industry. The modern oil and gas industry is broadly composed of three sectors based on the role that sector plays in delivering petroleum products to consumers. These sectors are:
We also discussed the three disciplines in petroleum engineering and their roles in the industry. These petroleum engineering disciplines are:
In addition, we briefly discussed the career potentials of up and coming petroleum engineers. We learned that petroleum engineers are typically hired into the upstream sector of the industry. In addition, with the aid of the resource triangle, we discussed some of the challenges that future petroleum engineers can expect to take on during their careers in the oil and gas industry.
Finally, we discussed the ethics of the engineering profession, in particular, petroleum and natural gas engineering. We also discussed Environmental Stewardship and its role in crude oil and natural gas extraction.
You have reached the end of Lesson 1! Double-check the to-do list on the Lesson 1 Overview page [14] to make sure you have completed all of the activities listed there before you begin Lesson 2.
Links
[1] https://www.iea.org/
[2] http://www.seylenergy.com/shale_oil_and_gas.html
[3] https://commons.wikimedia.org/wiki/File:US_primary_energy_consumption_by_source.svg
[4] https://de.wikipedia.org/wiki/Datei:World_energy_consumption_by_fuel.svg
[5] http://petrobazaar.com/view.aspx?c=902&TitleID=10128
[6] https://www.geoilandgas.com/oilfield/artificial-lift-well-performance-services/lufkin-beam-pumping-units
[7] https://creativecommons.org/licenses/by-sa/4.0
[8] https://www.researchgate.net/publication/255202938_Factors_That_Will_Influence_Oil_and_Gas_Supply_and_Demand_in_the_21st_Century
[9] https://www.researchgate.net/publication/290019140_Assessment_and_evaluation_of_degree_of_multilateral_well%27s_performance_for_determination_of_their_role_in_oil_recovery_at_a_fractured_reservoir_in_Iran?_sg=SqRgUbb0AUQKM26NgaWLlqc57p8tjAMvBISTqEUx-3fO4yTqypLZm4oIxw9QkQlXvxg34aZbdg
[10] https://www.nspe.org/resources/ethics/code-ethics
[11] https://www.nspe.org/sites/default/files/resources/pdfs/Ethics/CodeofEthics/NSPECodeofEthicsforEngineers.pdf
[12] https://www.nspe.org/sites/default/files/resources/pdfs/Ethics/EthicsReferenceGuide.pdf
[13] https://www.spe.org/en/about/professional-code-of-conduct/
[14] https://www.e-education.psu.edu/png301/node/808