Introduction to oil and gas offshore expansion and manufacture

Introduction to oil and gas offshore expansion and manufacture

Intro to offshore manufacture and drilling

Based on preliminary drilling and well log results, a reservoir could also be deemed to be commercially economic.

Work then gets current to expand the prospect. Expansion incorporates planning, creating, constructing and putting in the whole needed production infrastructure, furthermore as drilling the assembly wells. The main components of a deepwater expansion are represented during this module. Deepwater manufacture typically refers to expansion on the far side depths were bottom based platforms could also be used.

Deepwater Floating Platforms

One Deepwater idea, the Tension Leg Platform (TLP) is delayed by buoyancy but is moored to the seafloor by vertical steel legs, known as tendons. The tendons put a stop to vertical motions, therefore supplying a stable platform to each drill and finish the manufacture wells. The TLP has been in style within the Gulf of Mexico in water depths concerning 4500 feet. Further away 4500 feet TLPs become uneconomical because of the quickly increasing weight of the tendons.

Another expansion idea with low vertical motion is the Spar. A spar may be a large cylinder that extends all the way down to about 350 feet below the water line. Shell most recently used a spar to expand the Perdido field in 8500-foot water depth. Spurs are continued on location by standard, unfold mooring lines that are made from synthetic material like polyester and Kevlar. Whereas high-priced, these synthetic lines are nearly neutrally buoyant. Steel mooring lines would be prohibitively heavy in the very deep water.

“Deepwater manufacture refers to expansions beyond depths wherever bottom discovered platforms are also used.”

Subsea completions and processing

Perhaps the foremost formidable technology advance in deepwater has been the utilization of subsea well completions. The TLP and Spar platforms antecedently delineated permit wells to be completed with the manufacturer trees are on the platform deck. This facilitates access to the well for downhole maintenance, known as work over or intervention.

Subsea completion refers to inserting the manufacture tree on the seafloor. Today many deepwater manufacture wells are finished on the seafloor once being drilled from a floating oil rig. The completion could also be performed by an identical rig, or by employing a smaller, specialized vessel.

Subsea completion approaches currently embrace moving oil-gas-water partition facilities from the platform on the seafloor. This has major benefits. For example, fluids parted from gas on the seafloor are pumped back to the exterior in parted conduits. This avoids the issue of pumping 2-phrase fluid flow, continuously a serious challenge.  The very Deepwater found within the Gulf of Mexico, off Africa and off Brazil, also needed main advances in conduit making and installation. Large new pipelay vessels were expanded to get the pipe from Deepwater fields to onshore facilities many miles away. Some vessels use large reels around which pipe is wound next to shore and so straight into the water way offshore.

Additional pipelay barges have large fastening lines into that straight sections of pipe are welded along. The continual pipe is then contended out over the strict and lowered to the seafloor because the barge moves on the conduit way. Additional technologies have conjointly been expanded to hide the pipe on the seafloor, to inspect it each inside and out, and to fix it.

“Today, many deepwater manufacture wells are finished on the seafloor after being trained from a floating oil rig.”

Control and Maintenance of Subsea Equipment

Critical to all or any phases of installation and operation of subsea instrumentation is the use of casually operated (subsea) vehicles (ROVs). They are available in a very wide selection of designs to perform a myriad of subsea monitoring and operation tasks.

Today subsea instrumentation is intended in conjunction with the ROV which will be used to maintain it. The standard style of the subsea instrumentation permits ROVs to make certain repairs, like removing and substitution modules, once failures happen. All instrumentation on the seafloor is controlled through massive point bundles having electronic or fiber optic communication lines, just like the image type Offshore magazine.

Operators settled on the surface receive an endless flow of information from the seafloor manufacture instrumentation. This provides operators real-time management over an oversized number of functions within the instrumentation.

Downhole Well Maintenance

Yet an additional main advance is in downhole good maintenance and reservoir stimulation.

Every manufacture well needs periodic intervention. It should be to repair downhole instrumentation, to get rid of sand or scale, to stimulate the reservoir, or perhaps to drill a sidetrack into a unique part of the reservoir. Until last years, intervention into a subsea well needed a mobilization of an expensive floating drill rig.

Today, new, smaller vessels are offered to perform this operation reducing well intervention price. Remote control and observation represented antecedently conjointly help scale back maintenance prices. These price reductions and also the magnified reliability of subsea instrumentation justify the main growth in subsea completions.

Introduction To Oil And Gas Manufacturing

Introduction To Oil And Gas Manufacturing

Intro to Manufacturing

Today, we’re planning to bring up the manufacturing business of Upstream. If you lost the previous lesson on Upstream, Exploration, and Drilling, make sure to go investigate those out. We’ll place the relevant links within the program notes.

The Production and Offshore Construction Module supplies a high-level summary of production operations. It introduces the offshore contractors and production service suppliers that assist E & P firms in expeditiously manufacturing oil and gas.We’ll additionally mask well completions and key measures and drivers that influence production business operations.

Just like the different lessons, we’ll additionally offer some historical perspective on this a part of upstream oil and gas operations.

 

Manufacturing

Once oil or gas is found with a wildcat or discovery well, the following step in adding price to reserves is to induce the reservoir fluids dropped at the surface or “manufacture” them. After all, Upstream is additionally known as E&P!

Once a reservoir has been found, and an exploratory well has been trained, the well should be completed. Well, completion demands to add the “bottom hole” instrumentation to create the well commercially viable, then getting ready the good fluids for manufacture at the surface.

One wide control read is that completion starts once a bit initial makes contact with a productive reservoir. The Economic prosperity of a well depends in massive half on however the well is completed. A prospering completion should first create the optimum mechanical association between the wellbore and therefore the reservoir.

That optimum association should do 3 functions. It should let oil or gas into the well, wherever it will then flow or be tense to the surface. It should additionally keep water out of the well. And eventually, it should keep the formation from falling down into the wellbore or reservoir.

Manufacture technology, instrumentation, and processes additionally concentrate on maintaining the well and therefore the necessary processing facilities throughout out their economic life.

 

 

 

Challenges in Manufacturing

The easy oil and gas throughout the planet have already been created, and there are new provocations to depart as very little valuable organic compound asset behind as potential, over what could also be a 100+ year lifetime of a field.

“Economic triumph of a well depends in massive half on however the well is accomplished.”

Estimated final recovery (or EUR) is outlined as obtaining as several hydrocarbons out of the bottom to maximize the worth of a lease holding. It is one amongst the best underlying themes for the longer term economic viability of the oil and gas trade.

This lecture concentrates on manufacture operations, which is the management of the technology of well completions, field evolution intentions and facilities.  Just like the drilling module, it is useful to divide the topic into four essential themes around the key factors that drive quality in managing manufacture. These four factors consist of:

  • Hydrocarbon sort, whether oil or gas
  • Reservoir sort, whether typical or unusual
  • Place, whether onshore of offshore or in different remote or severe climate domains
  • Eventually, the facilities together with surface and submarine completion and processing instrumentation

There are two necessary reasons to grasp the technical aspects of manufacture.

First, technology is the limiting factor in discovering and manufacturing ever additional scarce assets.

Second, it very supports to grasp the offshore industry that is massive and complicated. It manufactures, assembles and delivers the instrumentation to supply from offshore wells. As we tend to mention within the exploration module, a considerable portion of the planet’s reserves is being found offshore.

Historical perspective

Let’s take a step back, and bring up some historical points regarding manufacture.

Historical evidence shows that the Chinese first discovered well completions around one thousand BC; firstly, for seawater wells. With the invention of oil in Pennsylvania in 1859, the economic oil era, as we all know it, was born.

Soon, different massive gushers were founded. Spindletop, Texas was found in 1901 at 1.170 ft and made a 100,000 BPD. Known as the Lucas well gusher, it tripled US oil manufacturer overnight. Signal Hill, Golden State was found in 1921, wherever the Alamitos was accomplished at a depth of 3,114 feet and led to the growth of one of the foremost productive oil fields within the planet.

Oil from these wells came in therefore quickly that ditches were accustomed to moving it far away from the well. Therefore, the ancestry of the term upstream, toward the well, and downstream, toward the tanks and facilities.

“Technology is the limiting factor in discovering and manufacturing ever additional scarce assets.”

In the 1920s, the Lufkin Foundry and Machine Firm in Texas spread a pumping component for a Humble Oil company (now Exxon). At first utilized in the Goose Creek oilfield on the Gulf Coast it had been formed and therefore the pump jack style is currently seen around the world. Lufkin Industries became a part of GE Oil & Gas in 2013.

Another milestone happened in 1919, when George and Herman Brown partnered with their brother-in-law, Dan Root, to begin a construction business. Brown and Root created the planet’s initial offshore platform in 1947. We have a lot of fascinating and necessary milestones on the timeline of our History of Oil Page, and we’ll embrace a link within the program notes.

The manufacturing aspect of the business has come a long way since those days. Operators equipped with advanced technologies and equipment are now finishing wells at depths of 25,000 feet, in offshore waters as deep as 10,000 ft or 3,000 meters.

Life of an Oil Field

Another component touching manufacture operations are the lifetime of an oil or gas field.

The planet’s oldest manufacturing oiler, McClintock No.1 in Titusville, Pennsylvania, commemorated its 150th birthday in September 2011 and not long ago underwent remedial work to revive its health.

Now a possession of a State of Pennsylvania, McClintock No.1 was trained in August 1861, at a depth of 630 feet (190m). At one purpose, it created 50 BPD from the third sand. Today, it can manufacture 12 barrels a month, that’s if the pumps are turned on. But, salt water has to be taken care of as a result of the well currently pumps a lot of brine than oil.

With such increased well life there’s a requirement for accuracy and consistency in the recording of each operation done to the well, as a result of each operation influences the long-run economic viability of a well of the field.

Operations use this information, known as a good history to optimize the field growth intentions and methods required to recover the utmost quantity of hydrocarbons from every reservoir.

Texas produced more API than North Dakota in 2016

Texas produced more API than North Dakota in 2016

The United States, Energy Information Administration (EIA), reported that for the second year, most of the crude oil produced in the lower forty-eight states in the previous years was light oil with 40.1 or higher API gravity. The EIA also added that the trend of rising production of domestic crude derives from the E&Ps extracting oil from tight formations. In North Dakota, a major oil producer produced less light oil in the previous year. California, on the other hand, produced no light oil at all in the previous year. In Texas, things were a bit different. It actually produced lighter oil in the past year (2016) as compared to those other years before 2016. Besides, in 2016, it produced less oil with an API grade higher than 50. This was also higher basing on the previous statistics.
Performance of Texas oil production in relation to other oil drilling states

The Energy Information Administration reported, basing on the API gravity of crude, that Texas’ oil production was robust. It pointed out that Texas produces more oil in all categories of API grade as compared to both North Dakota and California. Those results or rather reports brought great future expectations to the economy of the United States as far as gas and oil investment is concerned. It was, however, until January 2017 that the expectation became a reality.
According to the reports made on 31 March, it was deduced that Texas outranked two federal and thirty states offshore areas in production inJanuary, 2017. However, despite the fact that it was the leading oil producer, it actually produced less as compared to the previous year (2016) production. To be precise, it actually produced 4.9% less in Jan 2017 as compared to its production in Jan 2016. Karr Ingham, an economist, reported that 2017 was going to be a year of both recovery and expansion in the Texas statewide oil and gas investment companies. He also added that there is still a long way to go.

Good news in the first quarter of 2017

Fortunately, to his words, on April 19 the alliance reported that in the first quarter of 2017, Texas oil producers recovered about 291.4 MMbbl of crude. Besides, it added that precisely in the Permian basin in the west Texas, production in May could rise to a satisfactory figure which could report a good progress in the industry. There are therefore several factors that had to be put in place for the recovery of Texas’ oil and gas firms. The rise in the Texas Petro Index (TPI) was brought about by factors such as increased drilling activities, a rise in the number of drilling permits issued, higher gas and oil prices and much more. The index (TPI) is basically very far from what it recorded in 2016. And therefore the above factors need to be considered to achieve a different and a better result in the coming months and years.
Karr Ingham reported that the activity levels will continue to flourish, that will result to increase in job opportunities and the industry will support the broader state economy again. There is, therefore, good expectation in the future of the Texas’ investment in oil and gas industry should the above-mentioned factors be put into consideration.

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What Factors Drive Oil Prices, Other Than The Cost Of Oil

What Factors Drive Oil Prices, Other Than The Cost Of Oil

The question about what really drives the oil prices is now a concern to many people. It is noted in many countries that oil controls the economy. Should the cost oil increase, the costs of other products too are affected. It is, therefore, a concern for many people on what exactly drives oil prices. Yes, there are other fundamental determinants of the price which most of the people are aware about. The EIA rules out that about two-thirds of your costs of oil are affected or rather determined by crude oil cost. And this is what basically most of the people are aware of. The question is apart from this, what another factor really determines the cost of the oil? This article will explain some of these factors that really determine the cost of oil.

There are many factors affecting the oil price. These elements can change with the seasons. And as a result, they influence business and consumer buying decisions. The following are the factors that determine the oil price.

  1. Economic growth

This is one of the factors that affect the cost of oil. Naturally, as the economy grows, so does the price of oil. The growth of the economy is well defined by growth in industries and commercial markets. These will definitely cause an increased demand for this resource. In a strong economy that reveals good growth, industries and companies experience an increase in demand for their commodities. This, in turn, raises the wanted level of oil as a source of power. Therefore, as more sectors in the economy, demand for oil, the price increases invariably. Most industries use natural oil, which most of the consumers are not aware of. Pharmaceutical companies, for instance, use butane, ethane, and propane to manufacture consumer health products. Besides, industrial companies use natural oil to manufacture cleaner burning fuel source like gasoline. Therefore, oil firms get high demands should there be economic growth.

  1. Competition among resources

This is the other factors that really determine the cost of oil. The use of natural resources among energy companies and industries changes regularly on the availability of the resources and price. The use of natural oil by power companies is rapidly increasing. This is because the fuel has a low-carbon footprint. It is also due to its domestic availability. Therefore, due to the large volume associated with the consumption of natural resources, even a slight decrease or increase in price can definitely be conspicuous enough on demand.

  1. Oil storage

This too is one factor that really affects the cost of oil. The underground field locations, known as storage levels, are the basic link in the supply chain for delivering natural oil to homes, companies, and businesses. Just a slight increase in fees associated with storage levels can, in turn, cause an increase in oil price.

  1. Oil supply

The  oil supply is another factor that determines the oil price. Just as the law of supply states, should there be an increase in the supply of the oil, there will be a corresponding decrease in the price too.

Generally, those are the factors other than the oil and gas price fluctuation that do determine the price of oil.

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Brighter Future Of Oil And Gas In The U.S Coming Sooner Than Expected

Brighter Future Of Oil And Gas In The U.S Coming Sooner Than Expected

Basing on the report recently completed by IHS Global, it was found that the future of oil and gas investments in the U.S is bright. The report found out that the U.S is now the world’s largest natural gas producer. The report, based majorly on the growth in investment in oil and gas transportation and storage. And what economic impacts it will impact in terms of contribution to GDP, tax revenue, and employment growth. This most recent report from IHS looked specifically at shale production and the impact it would have on the U.S economy in some years to come. There are several benefits to the economy that are perceived from the report. This article will highlight some of these benefits that oil and gas firms will contribute to the U.S GDP specifically by 2035. These are discussed below.
Creation of employment opportunities

In the past few years, the shale gas companies have been seen to support more than six thousand jobs. It is perceived from the reports that come or rather by 2035, more and more indirect and induced job opportunities will be created. A good example is the Marcellus. It maintains over 100,000 jobs in Pennsylvania. This figure, according to the report, is expected to grow to 250,000 by 2035. Besides, gas production in Pennsylvania got a boost to their local economy in the last few years. Therefore, job creation would mean a great contribution to the U.S GDP.

Reduction in consumer costs

The use of natural gas has been one mechanism to many households for savings. This is basically because the price of gas is relatively cheaper. Therefore, the savings generated from lower gas prices and the associated lower prices for those other consumer commodities results to an annual average summation of $926 in disposal income per household. And according to the report, this figure is perceived to increase to more than $2000 on an annual basis per household by 2035.

Stimulate economic growth

This too was one of the findings in the report. It was discovered that about $1.9 trillion investments in cumulative capital investments are expected to be made by 2035. This generally implies that economic growth resulted from oil and gas will contribute greatly to the U.S GDP by that year.
Increased tax revenue
Now, due to the fact that there will a tremendous economic growth, there definitely will be an increase in the tax revenue. The oil and gas industry, according to the report, will generate more than $933 billion in tax revenues. These revenues are for local, state and the federal governments.
Therefore, from the above well-discussed points, there is no doubt that U.S oil and gas firms are expected to contribute $1.9 trillion to the U.S GDP come 2035. This is a report that should everything go as reported, then there would be a great improvement in the U.S economy. And as pointed out earlier, the U.S is the country that is now the largest natural gas producer. That simply implies that they affect the world’s economy in some way. And therefore, should there be a breakthrough of the economy in the U.S by 2035, the whole world will too experience and enjoy the results.

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Upstream Oil And Gas Explained

Upstream Oil And Gas Explained

Introduction

The oil and gas industry are marked by three key segments which include, upstream, midstream and downstream. This section is dedicated to expounding on what really entails the upstream segment.

The upstream segment that is going to be discussed in this lesson will include the following sections:

  1. Exploration and Production (E and P)
  2. Drilling and “Unconventional” techniques
  3. Business characteristics of the upstream segment
  4. Participants in the upstream segment
  5. Oil field services

Upstream Expounded

Fundamentally this is the first section of the oil and gas business and it’s also referred to as the exploration and production (E&P) stage. This is because it relates to activities that are linked to the pursuit, recovery and production of crude oil and natural gas.

It can be said that this segment concerns, where to locate oil reservoirs, understanding how deep to drill for the oil, and how to design, construct, operate and manage the oil fields or wells in order to be able to return the immense investment that has been injected bearing the fact that there will be the lightest, safest and smallest operational costs.

“Upstream is concerned with oil wells”

Perhaps the segment needs to be called the exploration, drilling and production stage or EDP due to how the three components are all dependent on each other.

Exploration

This is the first component of the upstream segment and it involves the following activities:

Obtaining a Lease

Its common knowledge that the law requires one to get a lease and granted permission in order to be able to search or locate where there is oil and this has to be obtained from the owner of the land or area (whether onshore or offshore).

 

 

Geological surveys

Once that is sorted out geological and geophysical surveys are carried out in order to pick the specific first well site to be explored and the main hope of the operators is to find economically viable oil or gas deposits.

This decisive first well is referred colloquially as the “wildcat well”

Drilling

It’s the physical process of literally making a hole into the ground with the key aim of finding economically viable oil and gas accumulations. This activity is essentially done by rig contractors and service companies in the oil field business sector. In a given oil well site there could be 30 to 40 different service contractors providing an array of expertise to the operator.

Oil wells can be elaborated as being either simple or complex. They can be totally vertical for several miles or just deep and horizontal. They can also take the shapes of the alphabet letters J and S providing a complex structure with various branches or laterals, emerging from the main original or “mother hole”. They are usually referred to as “deviated wells.”

Production

This is the process where the discovery of an oil or gas accumulation deposit is commercialized. This is done through maximizing the recovering of hydrocarbons from below surface reservoirs, followed by treating them to make them marketable.

“Production involves commercializing a discovered reservoir”

The in depth specifics and coverage of exploration and production processes will be covered later.

Unconventional Oil and Gas Techniques

This refers to methods employed that shy away from the traditional vertical or complex J and S shaped deviated wells. The three techniques that are part of unconventional means of extracting oil and gas include:

Let’s examine them in detail!

Horizontal drilling

This has been there for quite some time but due to advancement in technology it has continued to be utilized. It involves the drilling of horizontal wells which tend to reduce the size of the drill pad footprint and thus facilitate production along the length of the reservoir. The horizontal holes can extend for several miles with recent indications showing excess of 7 miles has been achieved.

Hydraulic Fracturing

It’s also commonly referred to as fracking and it involves the process of pumping water, chemicals and sand into drilled wells under very high pressures. The result is fractures in surrounding rock formations which allow for microscopic hydrocarbons to be recovered and hydrocarbons make up oil!

Subsea (deep water) engineering

When offshore oil reservoirs are discussed it’s worth noting that some of the largest oil and gas discoveries continue to be discovered in deep sea water off the coast of Africa, South America and Mediterranean Sea. The advancement of technology has empowered this field innovations that have made production possible for economically viable oil and gas from depths in the sea exceeding 10,000 feet.

Business characteristics of Upstream Segment

The four critical aspects of the upstream segment include:

  • High risk-High return segment
  • Highly regulated
  • Affected by global politics
  • Technologically intensive

High risk-High return

Among the three segments of the oil and gas industry the upstream segment is the most complex. This therefore means it has many opportunities and thus high returns but also its marked by high risks. These high risks involve hundreds of millions of dollars plus dedication of time in terms of years before oil and gas deposits become productive especially when considering offshore deposits.

 

 

Highly regulated

Regulations concerning oil and gas production, access to reserves, pricing and taxation and the ever strict environmental regulations characterize this segment.

Affected by global politics

Generally oil and gas is a global business which drives the global economy and thus susceptible to interference from politics emanating from oil and gas producing countries and mega companies that are involved with the business which leads to various complications

“Perhaps, upstream is the most complex segment of the three in the oil and gas business”

Technologically intensive

Technology is very dynamic and over the last decades there have been quite remarkably revolutionary technological advancements that have become part of the upstream segment but which come at a high cost thus making this segment capital intensive.

Participants in the Upstream Segment

The key players are four, who can be classified into four categories that include:

  • The majors or integrated oil companies
  • The National Oil Companies (NOC)
  • Independents
  • Oil field services

Majors/Integrated Oil Companies

These companies operate assets that characterize this segment and are well known in the oil and gas business. They include the global giant companies: ExxonMobil, British Petroleum (BP) and Shell.

National Oil Companies (NOC)

These are companies that are basically owned by their respective governments around the world and deal with oil and gas. They include: PEMEX from Mexico or Saudi Aramco from Saudi Arabia.

Independents

They exist in all the three segments of the oil and gas industry. They are referred as independent because they are not integrated with the other segments. Concerning this context of the upstream segment they include: exploration and production companies that focus on only finding and producing oil and gas such as Apache and Anadarko plus many more.

Oil field Services

These are services provided by companies that provide specialized equipment, services and technical skills required for exploration, drilling, completion, testing, production and maintenance of the crude oil and gas wells. Basically they do not own the assets that contain the oil reserve or are involved in production.

“Oil field services form the infrastructure that connects E&P”