Post on 26-May-2015
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The “Oil Patch”
A Broad Overview
for Non-technical Persons
Glenn R. Power: Resource Management Senior Geologist
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The following PowerPoint Presentation is intended to provide non-technical persons and ‘junior staff’ with insight into the Oil and Gas Industry (the “Oil Patch”).
It is impossible to completely avoid the use of technical terms. Some of these terms have been intentionally included because many people in this industry will hear ‘technical persons’ use these terms in presentations.
This broad overview of the many aspects of the Oil and Gas Industry should help the non-technical person have some confidence that the technical persons use lots of data to look for, find, and produce oil and gas safely.
There is no exam; nobody will be asked what you are able to recall. Relax, enjoy, just try to take in the “bigger picture”.
Glenn Power
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The ‘Oil Patch’ in a Clamshell
Chapter 1:
Where does oil come from?
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Exploration, discovery, delineation and production…
Familiar words in the “Oil Patch”…
But where does oil and gas come from?
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For the most part, ALL of Earth’s energy is provided by our Sun.
Plants harness that energy and produce sugars and fats that are consumed as food by animals.
This food can be considered as ‘energy packets’ and when plants and animals die this energy gets ‘trapped’ as organic matter.
The organic matter that doesn’t get consumed gets buried in lakes, swamps and oceans along with sediments, grains of ‘dirt’ (mud, clay, silt and sand).
Over vast amounts of time this organic matter (trapped in layers of mud) gets buried deeper and deeper into the earth. It forms layers of rock which are known as “source rock” from which oil and gas are generated.
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The plants and ‘critters’ that make up the organic matter, the ‘storehouses of energy’, can not be seen with the ‘naked eye’. Microscopes allow us to see their incredible structure.
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Algae can reproduce in astounding numbers in lakes and seas giving rise to what is referred to as an ‘algal bloom’.
Green algae blooms in lakes is often referred to as “pond scum” and Red algae blooms in oceans is often referred to as “Red tides”.
In a single season some algal blooms can cover hundreds of square miles. Multiply that by hundreds and even thousands of years!
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Algal ‘blooms’ can be seen by satellite. This one (off the coast of SW England) covers an area in excess of hundreds of square kilometers! The inset white line is 80km in length.
This is a singular occurrence. Imagine the volume of algae in a hundred years, a thousand, a million or more!
That’s an incredible amount of organic matter which can eventually be converted into oil and gas.
80 Km
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‘Fossil fuel’ is a “non-renewable” energy source with a finite supply.
Despite decades of ‘warnings’ and ‘cautions’ to reduce consumption mankind’s insatiable appetite for energy continues to grow.
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As “conventional oil” reserves diminish modern technology is being challenged to replace those reserves with “renewable energy”. One potential source is the growth of algae on an industrial scale to generate biodiesel.
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Another potential source of “unconventional” oil and gas reserves is the “Shale Plays”. What was once considered “source rock” with little to no permeability is now being drilled and fractured to produce gas and oil.
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The ‘Oil Patch’ in a Clamshell
Chapter 2:
What makes up a reservoir?
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The amount of porosity and permeability in reservoir rocks is often a function of the ‘parent rocks’ that the grains are eroded from.
The distance that those grains travel before they are deposited will also affect the grain size and shape and degree of sorting; all are factors which affect the porosity and permeability.
Additionally, sand grains that are deposited in a beach environment will likely be reworked over and over by wave action and tides. This results in angular grains becoming rounded, clays are removed and the sorting is increased.
Geologists need to study the source of the sediment and the environments of deposition in order help them predict where the best reservoirs can be found.
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In a later section we will be shown more detail on HOW a well is drilled.
At the moment it is sufficient to say that a drilling rig uses a “drill bit” to drill down into the solid rock layers.
The drill bit breaks up the rock layers into small pieces called “cuttings”. The geologist, or ‘mudlogging geologist’ at the “well-site” examines these cuttings under a microscope to determine what is the rock type (sandstone, shale, limestone) and whether or not there is any porosity and permeability.
The geologist also looks at these cuttings for their size (fine or coarse) and shape (angular or round) and other parameters that help to determine the “environment of deposition” of the sediments that make up the ‘rock layers’.
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Oil comes out of the ground from microscopic holes in the rock called “pores” or “pore spaces”. The measure of the amount of pore space relative to the amount of solid rock is called porosity and it is expressed as a percentage. Some estimate of the porosity is essential to determine how much oil there could be in a potential reservoir (the size of the resource).
The next essential component of a reservoir is how well connected those pore spaces are and how well oil or gas can flow through the rock. This is called permeability and is typically measured in units of millidarceys. The higher the permeability of the rock the better the flow rate and the more oil or gas you can produce (the larger the reserves).
Key Reservoir Rock Properties
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A pore is a small open space.Connected pores give a rock permeability.The ability to flow fluids through them.
Porosity and Permeability
Touch a sugar cube to coffee and watch the coffee ‘flow’ into the cube!Quartz sand grains with visible pore spaces.
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Porosity
If all of the particles that make up the rock are the same size and shape and are stacked on top of each other like the diagram on the top left, there would be a very high porosity percentage (48%).
If the particles get pressed together (as they do when they get buried) the rock will lose some of the initial porosity. The diagram to the left shows that the porosity has been almost cut in half (reduced from 48% to 26%).
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Effects of Size and Shape on Porosity and Permeability
Porosity and permeability of the reservoir rocks is affected by the size and shape of the individual grains.
Angular grains that are not very spherical tend to decrease the porosity and permeability, rounded grains that are highly spherical tend to have the highest porosity and permeability.
Another factor is how well sorted those grains are.
Generally speaking, the maximum porosity is achieved when all of the grains are the same size and ‘highly’ spherical. If there is a mix of grain sizes and shapes the porosity and permeability tend to be reduced.
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Effects of Sorting on Porosity and Permeability
If all of the particles that make up the rock are NOT the same size and shape (moderately sorted) then some of the smaller particles can fit in between the bigger ones and porosity is reduced further.
If there are lots of smaller particles mixed in with larger ones (poorly sorted) the porosity will be reduced further and the oil or gas will not flow through the rock as well, so the permeability is also reduced.
The geologist attempts to determine the ‘properties’ of the cuttings, their size and shape and degree of sorting.
These properties affect the reservoir porosity and permeability and ultimately, how much oil and gas you can produce from the reservoir.
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The ‘Oil Patch’ in a Clamshell
Chapter 3:
Environments of DepositionWhere do the reservoir rocks come from?
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Mountains get eroded, forming sediment (gravel, sand, silt and mud). Rivers move that sediment into lakes and oceans. Waves and tides continue to move that sediment around. Incredible volumes of organic matter ‘rain down’ to the sea floor and get deposited together with the sand, silt and mud. Sediments and organic matter get buried deeper and deeper over time, eventually forming source rocks and reservoirs.
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Very fine grainedWell roundedWell sortedFar
Very coarse grainedAngularPoorly sortedClose
SizeShapeSorting
Distance from source
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Generally speaking rivers meet the sea at right angles to the shoreline. Beach sands are close to shore and muddy sediments are further offshore. The continental shelf and slope run parallel to the shoreline. These ‘patterns’ can be recognized from the data collected from seismic and wellbores. The better we can recognize these patterns the more success we will have in finding oil and gas deposits.
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When the regional scale is determined, the explorationist can ‘zoom in’ on the type of environment that presents the ‘best chance’ to find oil and gas. The next slide will focus on the area outlined in the red rectangle above. Clastic shoreline deposits are common oil and gas reservoirs in the Jeanne d’Arc basin.
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We have seen some schematics or ‘cartoon’ pictures of these depositional environments,
now let’s look at the actual environments in ‘modern’ settings.
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Mountainous ‘highlands’ with alluvial fans at the base and terraced sediments deposited by rivers and streams.
Rivers redistribute the sediment and carve river valleys that form terraces (‘steps’) from ‘earlier’ incised valleys.
The eroded rock and sediment spills out onto floodplains. In addition to coarse grained sediments there are fine grained sediment (clays and muds) that support vegetation. This type of environment is ideal for farmland.
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Braided fluvial channels in an incised valley. Note the ‘rocky outcrop’ along the valley edges.
There is very little vegetation within the river valley which is typically evidence of high rates of water flow and relatively steep gradients. The fertile farmland in the background contains muds and clays from times when the river overflows its banks unto the ‘floodplain’.
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When the gradient of the river valley is low, ‘meandering’ river channels form. There is a high content of clay and mud which is ideal for establishing vegetation.
The water flow rate is typically low for most of the year but may have seasonal episodes where the rates are very high. Some of the ‘bends’ in the river system can be eroded and become cut off, forming ‘ox bow’ lakes (highlighted in the red rectangles). The one highlighted in the top of the picture has filled with mud and clay.
Sediment in the valley is constantly eroded and redeposited. The previous bends in the ‘loops’ are very obvious from this aerial photo.
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When the gradient of the river valley is low, ‘meandering’ river channels form. There is a high content of clay and mud which is ideal for establishing vegetation.
The water flow rate is typically low for most of the year but may have seasonal episodes where the rates are very high. Some of the ‘bends’ in the river system can be eroded and become cut off, forming ‘ox bow’ lakes (highlighted in the red rectangles). The one highlighted in the top of the picture has filled with mud and clay.
Sediment in the valley is constantly eroded and redeposited. The previous bends in the ‘loops’ are very obvious from this aerial photo.
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Where fluvial (river) systems merge with open ocean (marine) systems and sedimentation rates are high deltas may form.
This delta has multiple distributary channels that ‘fan out’ and distribute the sediment into the nearshore environment. These deposits are constantly modified by waves and tides.
‘Modern’ deltas have played a very important role in the history of humans on this planet. ‘Ancient’ deltas are frequently targeted for their oil and gas reserves.
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The Nile delta (shown here) clearly shows the importance of fresh water river systems for agriculture.
Arid conditions exist everywhere within only a very short distance from the ‘life sustaining’ waters of the Nile.
This is a ‘modern’ delta. ‘Ancient’ deltas are frequently targeted for their excellent oil and gas reservoir qualities.
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Satellite images of the Mississippi delta. The image on the right is color enhanced to show the extent of sediment distribution beyond the mouths of the rivers and into the Gulf of Mexico. The prolific oil and gas fields of the Gulf of Mexico are a result of millions of years of sedimentation and burial of both sediment and organic matter.
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Where rivers meet the sea you frequently find barrier Islands with sandy beaches, tidal inlets and muddy lagoons.
These environments are great places to live for a time but they are constantly changing, as sea level rises and falls through time.
Shoreline erosion and migration is constant despite man’s ceaseless efforts to prevent such change.
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From ‘modern’ depositional environments to ‘ancient’ depositional environments.
The following slides illustrate the types of depositional environments that contribute to the reservoirs found in the Jeanne d’Arc Basin.
Starting approximately 200 million years ago North America was being ‘torn away’ from Europe and Africa.
In the area of the Jeanne d’Arc Basin there were mountains being uplifted and eroded, large rivers, lakes, beaches and deltas were forming the sandstone reservoirs of the Jeanne d’Arc, Hibernia, Catalina and Ben Nevis Formations.
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Cartoon schematic of depositional systems active in the Jeanne d’Arc Basin from Jurassic through Cretaceous ages.
Hibernia
Hebron
Terra Nova
Whiterose
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Cartoon schematic of depositional systems active in the Jeanne d’Arc Basin with modern depositional environments superimposed.
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The ‘Oil Patch’ in a Clamshell
Chapter 4:
How do we find a reservoir?
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How do we determine where to drill for oil?
Data is acquired at every stage of the search for oil and gas. In the exploration phase seismic is the primary data set. Seismic surveys are carried out over vast areas (tens and even hundreds of square kilometers) on land and at sea.
Seismic provides a basin-wide view of the rocks and structures beneath the land surface or ocean floor. The data is necessary to reduce uncertainty and risk and to help identify locations to drill wells. Without seismic it would be akin to drilling ‘blind’.
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Early in the “Exploration Phase” seismic acquisition is used to ‘image’ the rocks below the land surface (or below the sea-floor for offshore areas).
The vast majority of the world’s oil and gas reservoirs are found in ‘layers’ of sedimentary rocks that reflect (and refract) sound waves. The seismic images are processed and drilling ‘targets’ (or prospects) are identified.
65A typical resultant 2D image is shown in the seismic line above.
66Note: The deeper layers are not continuous; they are ‘broken’ or faulted. Faulting makes it much more difficult to map and produce the oil and gas reservoirs.
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Multiple 2D seismic lines are processed so that a 3D image can be generated.
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3D image of the Hibernia Field. Two wells are displayed. The one on the left is an ‘up dip’ oil producer and the one on the right is a ‘down dip’ water injector. These are referred to as a “producer and injector pair”.
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3D image of the Hibernia Field with numerous wells displayed. Each new well enhances the understanding of the field and helps determine where the next well will be placed to maximize the oil recovery from the Field.
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The ‘Oil Patch’ in a Clamshell
Chapter 5:
How do we get the oil out of the ground?
The following slides illustrate the“drilling and completions process”
for oil and gas wells.
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It is not simply a matter of ‘digging’ a hole in the ground to produce oil and gas. It is a very complicated process that requires a great deal of technology.
Wells are drilled in stages, one section at a time, followed by what is called a “casing run” to ‘line’ the hole to prevent it from ‘caving in’ (and for other reasons).
The first stage drills the well to a relatively ‘shallow’ depth and then emplaces the first “casing string”; this is called the Conductor Casing.
This is followed by drilling to a ‘deeper’ depth and another “casing run” and so on until the well is drilled to the Final Total Depth (FTD).
Once a well has been drilled to the final depth of the reservoir and all of the casing is cemented in place, it is time to produce the oil and gas from well.
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There are four components which must be present for oil and gas to accumulate in commercial quantities.
Source: Organic material (plants and animals) that gets ‘cooked’ as the temperatures and pressures increase with burial.
Reservoir: Pore space that can store or hold the hydrocarbons.
Seal: Typically very fine grained, clayey material (shale) that is impermeable (fluids cannot move or ‘flow’ through it).
Trap: Typically a structural feature such as a fold or a fault that isolates and encloses an oil or gas reservoir.
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Hydrocarbons do not dissolve in water; they are less dense than water and (due to buoyancy) will try to rise to the surface.
Oil and gas will rise through the rock column until it reaches an impermeable layer that it cannot pass through (a seal). The hydrocarbons will then accumulate in the porous rock layers below the seal (the reservoir).
IF there is both oil and gas present in a reservoir the gas is less dense and will ‘float’ on the oil. Oil is less dense than water and will ‘float’ on the water.
The result is that there will be distinct ‘layers’ in the reservoir, a “gas cap”, an “oil leg” and a “water leg”.
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Hydrocarbons do not dissolve in water; they are less dense than water and (due to buoyancy) will try to rise to the surface.
Oil and gas will rise through the rock column until it reaches an impermeable layer that it cannot pass through (a seal). The hydrocarbons will then accumulate in the porous rock layers below the seal (the reservoir).
IF there is both oil and gas present in a reservoir the gas is less dense and will ‘float’ on the oil. Oil is less dense than water and will ‘float’ on the water.
The result is that there will be distinct ‘layers’ in the reservoir, a “gas cap”, an “oil leg” and a “water leg”.
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Multiple wells are drilled into an oilfield in order to maintain the pressure and maximize the amount of hydrocarbons that can be produced.
Well A penetrates the ‘water leg’; it does not intersect the gas or oil leg.
Well B penetrates the ‘water leg’ and the ‘oil leg’.
Well C penetrates the ‘reservoir in the gas, oil and water legs.
In this scenario, Well B would be the oil producer and Wells A and C would be “injection wells”. Well A would inject water in the ‘water leg’ and Well C would inject gas into the ‘gas cap’.
A CB
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Multiple wells are drilled into an oilfield in order to maintain the pressure and maximize the amount of hydrocarbons that can be produced.
Well A penetrates the ‘water leg’; it does not intersect the gas or oil leg.
Well B penetrates the ‘water leg’ and the ‘oil leg’.
Well C penetrates the ‘reservoir in the gas, oil and water legs.
In this scenario, Well B would be the oil producer and Wells A and C would be “injection wells”. Well A would inject water in the ‘water leg’ and Well C would inject gas into the ‘gas cap’.
A CB
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As the oil is produced it needs to be stored and then transported to market. In the offshore environment there are many types of vessels involved with the production, storage and transportation of oil and gas to markets.
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The Hibernia Platform is a Gravity Based Structure (GBS) that is attached to the seafloor. The produced oil is stored in the ‘legs’ till it is offloaded to tankers.
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Terra Nova and White Rose oil production is from large specialized ‘ships’ called FPSO’s (Floating, Production, Storage and Offloading).
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In an offshore environment gas is much more difficult to transport than oil. It is typically shipped via pipeline to a facility on land and may then be pressurized and liquefied so that it can be transported by sea to markets that are frequently very remote from where the gas is being produced.
This is a Liquefied Natural Gas tanker (LNG). There is not yet any commercial gas production from the Newfoundland and Labrador offshore. The gas that is produced from the oil is used for fuel and is also re-injected into the reservoirs which helps to increase oil production.
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The ‘Oil Patch’ in a Clamshell
Chapter 6:
Newfoundland and Labrador’s
“Crown Jewels”
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There are numerous Significant Discoveries in the NL offshore but to date, only three producing fields (Hibernia, Terra Nova, White Rose). The ‘Hebron Complex’ is the next field to be developed with first oil anticipated circa 2017.
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Significant Discoveries – Grand Banks
Discovered Recoverable Resources and Reserves:
2.7 Billion barrels of oil
6 Trillion cubic feet of natural gas
355 Million barrels of natural gas liquids
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Expenditures in the NL offshore approached $10 Billionprior to producing the first barrel of oil from Hibernia in 1997.
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A major milestone in the NL offshore was reached in the year 2010…More than ONE BILLION BARRELS of oil have been produced.
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Hibernia
Production Stats
Hibernia Field: Hibernia Formation Reservoir
Hibernia Field: Ben Nevis Formation Reservoir
Top Ten Hibernia Field Producing Oil Wells
Oil Recovery to end 2011
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Terra Nova
Production Stats
Terra Nova Field: Jeanne d’Arc Formation Reservoir
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Terra Nova FPSO offline for maintenance.
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White Rose
Production Stats
White Rose Field: Ben Nevis/Avalon Formations Reservoir
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White Rose Field
Producing Oil WellsOil Recovery to end 2011