2/22/2013

Introduction to Hydrocarbon
Exploration and Production

Lisa Song
Feb 15, 2013

Disclaimer:
The views and opinions expressed in this presentation are
those of the author and do not necessarily reflect the
official policy or position of any companies. Examples of
analysis performed within this presentation are only
examples. Assumptions made within the analysis are not
reflective of the position of any of the authors employers.

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AGENDA

The Field Life Cycle

Exploration

Searching for Hydrocarbon

Reservoir Characterization Well logging

Appraisal
Development

10 mins Break

Drilling and Well Planning

Drilling System and Equipment
People on the Rigs

Production
Abandonment

Post Test (15 questions)

Open Q & A

Where does Upstream Fit?

Exploration &
Production

Trade/
Transport

Process/
Manufacture

Store/
Distribute

Market

Upstream

Midstream
Mid

D
Downstream
t

Exploration &
Production (E&P)

Gas Pipelines
Liquefied Natural Gas
(LNG)
Gas to Liquid (GTL)
Trading and Risk Mgt
Wholesale Trading

Liquid Pipelines
Lubricants
Refining
Supply & Trading
Retail

Accenture, 2007

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The Field Life Cycle

Key Phases of the E&P Lifecycle
EXPLORATION

APPRAISAL

DEVELOPMENT

ABANDONMENT

PRODUCTION

The Field Life Cycle

Exploration
EXPLORATION

APPRAISAL

DEVELOPMENT

PRODUCTION

ABANDONMENT

At the end of this session, you will be able to:

Mention the main objective of exploration phase.
Mention the 5 conditions for the existence of the hydrocarbon.
Describe the objective of well logging.
Mention the parameter to be solved in Archie equation.
Mention at least 4 different job positions in the exploration phase.

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The Field Life Cycle

Exploration
EXPLORATION

PRODUCTION

ABANDONMENT

Overview and Objectives.

Petroleum Migration & Accumulation
Seismic Data Acquisition
Subsurface Map from Logging

Reservoir Characterization Well Logging:

DEVELOPMENT

Searching for Hydrocarbons:

APPRAISAL

Wireline Logging Rig Up.

Logging Unit
Objectives of Well Logging
Archie Equation

The Exploration Team

Exploring E&P Assets Overview

Objective Find new hydrocarbons.
The primary way in which companies replace their reserves
d grow. It is
i a necessary core competency
t
t
and
off upstream
oilil
and gas company.
Typical sequence of activities:

More ex
xpensive
Narrow
wer area

Broad surveying gather information at low cost over an

extend of entire basin.
Develop a coarse seismic map to define exploration leads
play development.
Continue with more detailed investigations to define a
prospect.
Drill an exploration well a wildcat to collect well data to
generate subsurface map.

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Exploring E&P Assets Petroleum Migration

and Accumulations
Conditions for existence of
hydrocarbon accumulation:
1 Source
S
R k
1.
Rocks
2. Migration Paths
3. Reservoir
4.Trap
5. Cap Rock/Seals

https://learning2.chevron.com/content/ss/chevron_ETC/IHRDC3/

Exploring E&P Assets Seismic Data

Acquisition
Seismic

survey mechanics

Objective is to produce an acoustic image of the

subsurface.
Generation of artificial shock waves which
propagate through to the reservoir rocks and
beyond.

Jahn et al, Hydrocarbon Exploration and Production, 2008

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Exploring E&P Assets Subsurface Map

from Log

https://learning2.chevron.com/content/ss/chevron_ETC/IHRDC3/

Reservoir Characterization: Well

Logging - Wireline

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View of a Logging Unit

Wireline Engineer

Acquisition Equipment

Company Man
Unit Engine

Winchman
Cable drum

Wireline cable to
downhole tools

www.slb.com

Objectives of Well Logging

Lowering of sensors into the (open) wellbore using a
wireline cable to provide the customer with answers
such as:
Lithology the types of rock formations?
Resistivity what fluid is in the rock?
Porosity how much space is in the formation?
Fluid
Fluid type Hydrocarbon or not?
Formation Mechanical Properties

www.slb.com

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ARCHIE Equation

Sw

Rw
2 Rt

So 1 Sw

Rt = Formation resistivity (ohm)

Rw = Formation Water Resistivity (ohm)
= Porosity (%)
Sw = Water Saturation (%)
So = Oil Saturation (%)

Exploring E&P Assets The Exploration

Team

Geologist: a specialist in the application of geology to the search

for oil and gas in sedimentary basins.
Geophysicist:
a specialist
who applies
the laws of physics
(seismic)
p y
p
pp
p y
(
)
to the search for oil and gas in sedimentary basins.
Petrophysicist: a specialist who applies the laws of physics and
chemistry to the study the formation rocks and fluids properties by
utilizing well log measurement.
Drilling Engineer: an engineer who can plan and oversee the
drilling of exploration and appraisal wells.
Reservoir Engineer: a specialist in the technology and use of
reservoir simulation models to estimate resources and reserves
and to plan the optimal subsurface development plan for a
reservoir, including well locations and production profiles.
Financial Specialist: an individual who gathers data and uses
financial models to prepare financial projections for petroleum
prospects, including the petroleum industrys standard project
financial indices.

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The Field Life Cycle

Appraisal
EXPLORATION

APPRAISAL

DEVELOPMENT

PRODUCTION

ABANDONMENT

At the end of this session, you will be able to:

Mention the main objective of appraisal phase.
Define resources and reserves
Mention 5 parameters needed in resources calculation.

The Field Life Cycle

Appraisal
EXPLORATION
O
O

APPRAISAL

DEVELOPMENT

PRODUCTION

ABANDONMENT

The role of appraisal in the field life cycle.

Provide effective information to decide whether or not to develop the
field.
Reduce the uncertainty of reservoir description: producible volumes, etc
Look at various technical options to develop the field.

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Appraising E&P Assets Resource to

Reserve Classifications
Resources: Amount of oil originally in place (reservoir)
Resources are estimated based on interpretation of geologic
and/or engineering data.
Reserves: Amount of oil which can be recovered with the
current technology.
Reserves are categorized by their degree of uncertainty with
the two major classifications being proved or unproved.
Fundamentally, reserves can be considered as inventory.

Appraising E&P Assets Resource to

Reserve Classifications

Resources (STOOIP) = A*h* *So/Bo

Reserves = Resources * Recovery Factor

STOOIP = Stock Tank Oil Originally in Place

A = reservoir area
h = average reservoir thickness
= Porosity (%)
So = Oil Saturation (%)
Bo = oil shrinkage factor

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The Field Life Cycle

Development
EXPLORATION

APPRAISAL

DEVELOPMENT

PRODUCTION

ABANDONMENT

At the end of this session, you will be able to:

Mention the main objective of development phase.
Mention 3 basic functions during a drilling operation.
Mention 2 rig categories based on its location.
Mention 5 different people on the rig with their respective main duties.

The Field Life Cycle

Development
EXPLORATION

APPRAISAL

DEVELOPMENT

PRODUCTION

ABANDONMENT

The role of development stage in the field life cycle is to

provide and execute the field development plan which
includes:
Project objective and specification.
Well
drilling,
W ll engineering
i
i ((wellll type, d
illi etc).
)
Facilities engineering (extraction, separation, transportation,
processing plant etc).
Cost and manpower.
Operational and maintenance policy and standard.

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Developing E&P Assets Drilling and Well

Planning
Feasibility studies estimate number of wells based on: The type of
d l
((gas cap, water injection,
i j i d
l i d
i ) and
d Th
development
depletion
drive)
The
production/injection potential of individual wells. Reservoir simulation
efforts are important in this phase.
Drilling of a well requires a large capital expenditure.
Successful drilling engineering requires the integration of many
disciplines and skills that will be used throughout the life of the
potential field:

Geologists and geophysicists type and depth of rock formations, objectives zones,
etc.
Petrophysicists fluid distribution information.
Reservoir engineers Prognosis of subsurface pressures along well trajectory,
estimating well/field performance, typically acts as the project economist.

Accenture, 2007

Developing E&P Assets Drilling System and

Equipment

Three basic functions

during drilling operations:
Torque is transmitted
through the drill string to a
drill bit.
Drilling fluids are circulated
down the drill pipe and up
the annulus to carry cuttings,
clean the hole, cool bit, and
lubricate drill string
string.
Subsurface pressures are
controlled by the weight of
drilling fluids and by large
valve assemblies at the
surface.

Accenture, 2007

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Developing E&P Assets Drilling System and

Equipment
Drilling Problems Causes
of Downtime
Downtime or Lost
Lost
Time

Stuck Pipe - A situation where

the drill string cannot be
moved up or down or rotated in
the hole.
Fishing - Retrieval of a foreign
object
bj t ffrom th
the b
borehole.
h l

Accenture, 2007

Developing E&P Assets Rig Types and

Selection

Type of rig selected depends on

various factors:
Cost, availability, and
environmental requirements
Water depth or location
(offshore)
Mobility/transportability (onshore)
Depth of target zones and
expected formation pressures.
pressures
Prevailing weather conditions in
the area of operation.
Quality of the drilling crew
(including the safety record).

Dina #1 Overlooking Battle River Valley

in Saskatchewan (summer 1937)

Accenture, 2007

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Developing E&P Assets Rig Type and

Selection (Contd)
Land Rigs

A land rig can be found anywhere on the planet. It can be in a jungle or on top of a mountain, in the
desert sands or in the middle of city. Wherever the rig is placed, a large area must be cleared to
facilitate the operations.

www.slb.com

Developing E&P Assets Rig Type and

Selection (Contd)

Offshore Rigs
Offshore drilling operations and equipment are similar to those on land.
Major difference between onshore and offshore rigs is the platform upon which
the rig is mounted.
Costs typically increase with water depth.
Type of rig utilized depends on characteristics of operating environment.

Jahn et al, Hydrocarbon Exploration and Production, 2008

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OFFSHORE RIGS

The JACK-UP (above and

top-left)

Semi-Submersible
Also called a Floater or a Semi. This
rig can be used in relatively deeper
waters.

This rigs stands on

three-legs. This is
used in relatively
shallow waters.

www.slb.com

OTHER OFFSHORE RIGS

Artificial Island
In really shallow waters an artificial
island is created.

How will you get to the office?

You will nearly always fly to
the rigs on helicopters.

DRILL SHIPS
In ultra-Deep waters, Drill-ships like this one are often
used

www.slb.com

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OFFSHORE PLATFORMS

Many of the cased-hole operations occur on Production platforms such as this one.

www.slb.com

RIGS COMPONENTS
1. Crown Block

14. Fuel Tanks

2. Catline Boom and

Hoist Line

15. Electric House

3. Drilling Line
4. Monkey Board
5. Travelling Block
6. Top Drive
7. Mast
8. Drill Pipe
9. Dog House
10.
10 Blowout Preventer
11. Water Tank
12. Electric cable Tray
13. Engine generator
Sets

16 Mud Pump
16.
17. Bulk Mud
Components in
Storage
18. Mud Pits
19. Reserve Pits
20. Mud Gas Separator
21. Shale Shaker
22. Choke Manifold
23. Pipe Ramp
24. Pipe Racks
25. Accumulator

www.slb.com

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Crown Block

Mud Hose
Kelly
RotaryTable
Mud Pump

Traveling Block
Hook
Swivel
Draw Works

ing
Casing
Drill Pipee

Drilling Mud

Bit
24803

Accenture, 2007

People on the Rig-1

A COMPANY MAN is a representative of an oil-drilling company (e.g
Shell BP)
Representative
Shell,
BP). Other terms that may be used are Company Representative,
Drilling Engineer, or Rig site Leader. He has overall control of the rigsite and authority in all matters. All operational issues should be
discussed with the Company Man. He will give you all the information
you need about the well and the drilling.

The TOOL PUSHER is the person responsible for all operations

on a Drilling Rig
Rig. They are also known as rig managers
managers.
Tool pushers are in charge of keeping the rig and all necessary tools
and equipment, supplies, etc. They work closely in conjunction with
the company man in regards to the actual drilling of the well.
Tool-pushers also take on an administrative role.
Usually a tool pusher has started at the bottom and worked his way
up and has been in the industry for a number of years.

www.slb.com

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People on the Rig 2

A DRILLER is the supervisor of the Rig Crew
The driller operates the pumps, draw-works, and rotary table via the
drillers console - a control room of gauges, control levers, rheostats,
and other pneumatic, hydraulic and electronic instrumentation. The
driller also operates the draw works brake using a long-handled lever.
Hence, the driller is sometimes referred to as the person who is "on the
brake."

Roughneck is a low-ranking member of the Drilling crew. A

roughneck usually performs semiskilled and unskilled manual
labor. They report to the Driller
A Roustabout is an Un-skilled laborer that does general
duties around the rig. They can be promoted to become
Roughnecks. They also report to the driller.

Derrick-man reports directly to the Driller. The name derrick man

comes from the position that he normally occupies, which is at the top
of the Derrick. From this position, he guides the stands of drill-pipe
(typically 90 ft long) into the fingers at the top of the derrick while
tripping out of the hole. When tripping into the hole he will pull the
pipe out of the fingers and guide it into the top drive or the block.
www.slb.com

People on the Rig 3

Mud Engineers job is to determine the correct Mud, also called drilling fluid, to use for the
well, advising treatment and monitoring its condition. Main properties monitored are density,
viscosity, chemical parameters and solids content. If properties divert from mud program mud
g
will notify
y drilling
g crew and company
p y man and advise treatment.
engineer

A mudlogger tasked with gathering data and collecting samples during the
drilling of a well and organizing this information in the form of a graphic log,
showing the data charted on a graphic representation of the wellbore. Mudloggers
observe and interpret the indicators in the mud returns during the drilling process.
The mudlogger logs at regular intervals, properties such as drilling rate, mud
weight, flow line temperature, natural gas content and type, oil indicators, pump
pressure, pump rate, lithology (rock type) of the drill cuttings, and various other
items of interest
Oil companies use geologists' to help them locate oil and Gas deposits. They will look at
the Data from the well such as the mud-logs and the Wireline logs and make sure that the
geological objectives of the well are met. He may be the witness of the Wireline log.

www.slb.com

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People on the Rig 4

He or she is responsible for carrying out a host of complex, technical operations on the rig.
Normally, Rig personnel have no idea what the Wireline Engineer does. He or She is usually the
youngest person on the rig and very well educated. They always show great respect and
professionalism towards all rig-workers at all times on the Rig.

The WIRELINE
ENGINEER

www.slb.com

Developing E&P Assets Casing the Well

As the well is drilled, casing is set in the
wellbore. Casing serves to:
Protect groundwater supply
Protect the integrity and stability
of the wellbore.
Provide a framework for setting
completion equipment to permit
flow of hydrocarbons to the
surface.
Casing is set into place using cement.
Casing that does not extend to the
surface is referred to as a liner.

Accenture, 2007

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Developing E&P Assets Well Completions

Purpose of well completion is

to pprovide a safe mean for fluid
flow from reservoir to flow line.
Perforations provide
communication between
wellbore and reservoir.
Production packer isolates
reservoir and annulus.
Well completions tailored to
individual wells.
wells
Hydraulic Fracturing
Gravel packs

Accenture, 2007

The Field Life Cycle

Production
EXPLORATION

APPRAISAL

DEVELOPMENT

PRODUCTION

ABANDONMENT

At the end of this session, you will be able to:

Mention the 2 main categories of aspects in production phase.
Mention the main objective of abandonment phase.
y
g
Mention/draw the main components of the field life cycle
graph.

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The Field Life Cycle

Production
EXPLORATION

APPRAISAL

DEVELOPMENT

PRODUCTION

ABANDONMENT

The role of production stage to manage subsurface

characteristics and the surface facilities.
Subsurface Characteristics:

Surface Facilities:

Reservoir performance and

recovery.

Gathering,
separation,
Gathering separation
transportation and storage.

Reservoir Monitoring.

Managing capacity constraints.

Workovers and production

enhancements.

Producing E&P Assets Well Performance

Objective of managing well performance is to reduce the constraints the
on the pproduction of hydrocarbons
from the reservoir,,
well mayy impose
p
y
for examples:
Damage skin
Sand Production
Scaling
Producing Unwanted Fluids
Tubing String design with restriction to flow

To achieve reservoir potential, well constraints should be reduced

where economically viable.
Numerous techniques available: acidizing, workover, artificial lift
techniques, multi-lateral wells, infill, etc.
Accenture, 2007

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Producing E&P Assets Workover Activity

in Production Phase
Wells are worked over to increase
d i reduce
d
i costs, or
production,
operating
reinstate their technical integrity.
Well production can be negatively
affected by:

Mechanical damage
Flow restriction: sand, wax, scale
Water or gas breakthrough
Cross flow in well or behind casing

In extreme cases, the production

interval is plugged back and a sidetrack well is drilled.

Accenture, 2007

The Field Life Cycle

Abandonment
EXPLORATION

APPRAISAL

DEVELOPMENT

PRODUCTION

ABANDONMENT

Economic Life of a Field

Consideration in the Decommissioning Methods

Plugging and abandonment techniques isolation of all hydrocarbon bearing zone.

q
Isolation and pprotection of aquifers.
Removal of wellhead equipment.
Potential impact on human health, safety and environment.
Costs of the plan

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Abandoning E&P Assets Economic Life of

a Field

Jahn et al, Hydrocarbon Exploration and Production, 2008

The Field Life Cycle

Key Phases of the E&P Lifecycle
EXPLORATION

APPRAISAL

DEVELOPMENT

PRODUCTION

ABANDONMENT

Post
P t Test
T t

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