La Industria

What you need to know

1. What are hydrocarbons?

These are the chemical components produced by combining carbon with hydrogen.

2. What are petrochemicals?

This is the industry which works with all the products derived from oil and gas raw materials. The petrochemicals industry turns these into new products such as polyethylene and polypropylene, synthetic fibers such as nylon and polyester, acrylic substances, colorings, adhesives, paint, pharmacological products, cosmetics, fertilizers, herbicides and insecticides, lubricants, asphalt, etc.

3. What is coal?

This is a natural fossil fuel like oil and gas. It is mainly made of carbon and a small part of high-density hydrocarbons.

4. What is a field?

A location where something is accumulated, such as oil and gas for example. Oil or gas subjected to the pressures of the earth begin to migrate but often do not reach the earth’s surface as there are layers of rock in between. This is how reserves are formed, as accumulations of oil and gas beneath the earth’s surface.

5. How is a hydrocarbons field formed?

There must be the following:

  • 1-A sedimentary basin: this is a pocket filled with sedimentary rock, which is the only one able to generate hydrocarbons and is generally where these tend to accumulate. In a few cases, crude oil (petroleum) and gas may accumulate in granite rock. The size of these pockets varies hugely by thousands of km2, and they are usually several thousand meters deep, as much as 7,000 meters. The pockets are surrounded by bedrock (hard igneous rock which rarely contains petroleum).
  • 2-Generation and expulsion in the rocks which generate petroleum: Currently, the theory is that petroleum is the end result of a process in which the organic remains of animals and vegetation (plankton, algae mats, coral reefs, oysters, and fish, for instance) were gradually absorbed by the mud on the floor of lakes and seas where they lived. As there is no oxygen at these depths the organic matter did not rot away. The clay-based sediment made up the bedrock which created oil. This was gradually covered by other sediment and became buried, before being subject to higher pressures and temperatures. As the rock heated up, the organic matter decomposed, “cooking”, and transformed itself into simpler components which are hydrocarbons. The pressure at these depths forces the oil or gas generated out of the rock and it begins to migrate through the free spaces deep underground, displacing any accumulated water deposits downwards.
  • 3-Reservoirs: petroleum is not found in caves beneath the earth’s surface, but soaked into a certain kind of rock called reservoir. These rocks are porous, with tiny pores inside which contain the oil and gas as if they were sponges. Reservoirs have three properties: a) they are porous (which means that they contain pockets or pores which convey the idea of storage), b) they are permeable (making it easy for the fluids to migrate within and through the rock) and c) they are saturated with hydrocarbons (meaning the percentage of the pores occupied by petroleum or gas).
  • 4-Trap: in order for the petroleum or gas to be concentrated in a particular place, there must be impermeable rock lying over and around the edges of the reservoirs preventing the oil and gas from migrating and keeping it concentrated in one place. This is called a trap.

6. What is oil exploration?

This means the search for gas and petroleum, carried out by upstream companies. This is the phase prior to a find and it involves geologists, geophysicists and experts in earth sciences. The tools they use are surface and underground maps, the latter created by seismic reflection surveys. Other techniques such as aeromagnetometry and gravimetry are also used in exploration to determine the thickness of the sedimentary layers. The whole process is extremely pricey and success is not a given fact. However, if exploration is successful, work begins to delimit the field discovered by drilling wells in order to evaluate how big the reserves are.

7. What is meant by oil and gas reserves?

This means the volume of the hydrocarbons that can be extracted over the useful life of the field. The information is gathered after drilling one or more wells to set the limits of the size of the field. The reserve is only a fraction of the total amount of oil, as not all of it can be recovered. The degree of certainty as to the existence of the field and the recoverable volume means that the reserves can be classified into the following: Proven refers to the estimated amounts of oil and gas which may be recovered from known accumulations in a cost-effective way on the basis of the data available and the means at their disposition. Probable means those reserves which have a reasonable chance of being recovered, but less than the certainty concerning proven reserves. Possible implies that there is a greater level of doubt about their recoverability.

8. How is a field developed?

Once the existence and amount of reserves have been established, it is time to plan the field development, establishing the number and type of wells to be drilled, whether water will need to be injected to improve recovery, what kind of surface facilities will be needed, the amount of personnel and the cost of investment and expenditure.

9. What are seismic reflection surveys? What different kinds of seismic surveys are there?

Seismic reflection involves creating sound waves at surface level using explosives or vibro-trucks (on land) and air guns (at sea). These sound waves penetrate the ground and are reflected back to the surface each time there is a change in the kind of rock that the wave comes across. The acquisition of these seismic lines is plotted on a grid which can be either 2D (two-dimensional) or 3D (three dimensional), the latter providing more information.

10. What is the oil industry and how does it work?

The only way to prove the existence of oil is by drilling, once its likely location has been explored. In some cases a technique is employed that has not changed since the early days of the industry, known as cable drilling, which involves a bit, with a chisel-like structure attached to one end of a cable which is repeatedly raised and lowered to cut through the rock in a percussive action.

As from the beginning of the 20th century, the rotary system began to be used, where the bit device is rotated with a pipe or drill string which bores through the earth. This system cuts down on drilling time and costs and is also capable of reaching greater depths.

11. How is a drilling rig built and what does drilling involve?

Drilling equipment involves a mechanical or electromechanical system made of up a tower or mast which supports the rig. This structure allows the pipes and tools to be maneuvered into place powered by electrical or combustion engines. It also powers a rotary table which transmits the rotation to the pipe.

This equipment is complemented with other devices such as pipes, pumps, tanks, well control valves, electrical generators, etc. The tool which actually does the cutting is the drill bit made of high-grade steel, with teeth cut into its surface or inserts made of hard metal alloys inserted into the bit body.

The drill bit consists of several hollow passages for fluids. The assembly of pipes used for drilling is called the drill string and is made up of a series of pipes which are connected by being threaded onto each other. This assembly provides the rotating direction for the drill bit at the bottom end of the string and allows for fluid circulation. There are also collars (pipes used to provide weight for drill bit and also allows fluids to pass through), drill pipe, (hollow pipes which thread onto the drill bit), collars and the top drive which rotates the string.

The fluids used in drilling (fresh or salt water, hydrocarbons mixed with water, air or gas) are treated using an injection and circulation system, with tanks and centrifugal pumps which prepare the fluid and recover it when it returns to the surface, filtering out the cuttings and pumping it back into the well. The fluids injected into the well vary according to the soil composition and their function is to cool down the drill bit and keep it clean. They also sweep out the cuttings and keep them in suspension, keeping the well walls stable and preventing fluids from the formation seeping into the well.

12. What does production mean in the oil industry?

Once drilling has finished, the well is ready to start production. The fluids from a field, be they oil, gas or water, enter the well under pressure. If the pressure is high enough, the well flows naturally and can produce without further help. If the pressure is not high enough, it requires a system to help the fluids to come to the surface.

There are three natural drive mechanisms which reduce pressure either on their own or in combined fashion. Solution gas drive is where the driving force is gas mixed with petroleum which tends to expand as pressure drops. Gas cap drive is where the gas is accumulated under the layer of petroleum and drives this towards the well.

Hydrostatic drive uses water which has collected beneath the petroleum to push the petroleum towards the well. When natural energy ceases to be strong enough, well production is aided by artificial methods (such as mechanical or hydraulic pumping, centrifugal pumps or gas injection) to continue extracting oil, which makes the whole process far more expensive. In order to improve oil recovery, methods such as water and gas injection are often used to drive the volume of oil upwards, known as secondary recovery.

Other methods include tertiary recovery, which involves injecting carbon dioxide or solvents into the well bore or using a thermal approach such as steam injection. Conveying crude oil: The petroleum and the associated gas and water are conveyed from each well to batteries or collection stations through a network of pipelines. Each battery receives the output produced by a number of wells and carries out processes to separate the fluids and measure the volume produced.

The first collection and processing for separation is performed in the production tanks prior to transfer to the refinery or gas processing system.

13. How are hydrocarbons stored?

The storage tanks are built to hold large amounts of oil and gas. Storage is a key factor in hydrocarbons exploitation as it is the nexus between production, transport and consumption. Liquids such as petroleum, oil, fuel oil and diesel oil, kerosene and other petrochemical derivatives which require storage at room temperature and pressure are kept in steel cylindrical tanks with a flat bottom and a vaulted ceiling sometimes with an internal floating roof to avoid inflammable gas accumulating. Liquefied gas and other derivatives which need to be stored at special temperatures and pressures are kept in custom-built containers.

Propane or butane gas stored at normal atmospheric pressure and low bubbling temperature are kept in refrigerated flatbottomed cylindrical tanks, held within a flexible structure which can absorb differences in size as the container is filled, emptied and cooled down. The gas is usually stored with a view to increased consumption during the winter months.

14. What does upstream mean in the oil industry?

This refers to the industrial segment responsible for extracting the product and conveying it to the point where it begins industrial processing. In the case of oil and gas, this includes exploration, drilling, exploitation, delivery to refineries and processing and fractionating plants. Oil companies generally produce both oil and gas, as these tend to be found together, although one is usually found in a greater proportion than the other.

15. What does downstream mean in the oil industry?

Downstream means the last stages of an industrial process or the sales phase of a product and its sub-products. In the case of oil and gas, it refers to the stage of refinery, separation, fractionating, distribution, marketing and sales.

SOURCE: “El abecé del petróleo y del Gas”, (The ABC of Oil and Gas ) developed by the Instituto Argentino del Petróleo y el Gas (IAPG)