BASIC

OIL & GAS

OPERATIONS
BIRTH OF INDUSTRY

Jakarta, 2016

The oil & gas industry is not of recent origin, but petroleum's current status as
the key component of politics, society, and technology has its roots in the early
20th century. The invention of the internal combustion engine was the major
influence in the rise in the importance of petroleum.

Source: Wikipedia
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BABYLONIA ZIGGURAT TOWER

Ancient Oil &

Gas

Four thousand years ago,

according to Herodotus
and confirmed by Didorus
Siculus, asphalt was
employed in

the construction of the

walls and towers of
Babylon; there were oil pits
near Babylon, and a pitch
spring on Zacynthus
(Ionian islands, Greece).
Great quantities of it were
found on the banks of the
river Issus, one of the
tributaries of the
Euphrates.
Ancient Persian tablets
indicate the medicinal and
lighting uses of petroleum
in the upper levels of their
society.

Source: "Petroleum". Encyclopdia Britannica (11th ed.)

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Roman historian Didorus Siculus

(Bibliotheca Historica, II: 12) described as follows:

Illustration by Rasoul Sorkhabi (modified from R.J. Forbes, Studies in Ancient

Technology, volume 1, Leiden, 1955)

Source: GeoExPro , Vol 6 No.2 -2009

"While many incredible miracles occur in the

Babylonian country, there is none such as the
great quantity of asphalt found there. It is not only
sufficient for so many and such large buildings but
the yield, as with a rich well, remains
inexhaustible."
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History Milestone of World Oil before Industrialization

1000 CE
1745 CE
1753 CE

1100 CE

400 CE

Early History of
Petroleum
40 000 Years of Oil

Ancient Salt Drilling in Sichuan Province. A "Kang Pen" drum is

seen in the centre foreground, with gas pipes directly feeding
the salt stoves on the right. Taken from ancient sketch from
The Annals of Salt Law of Sichuan Province

The first evidence for oil

product usage was from a
very long time ago
natural bitumen has been
found on stone tools from
Neanderthal sites in Syria
dating from ~40,000 years
ago.
By ~3000BCE the Indus
community of Mehrgarh
used naturally occurring
bitumen to waterproof crop
baskets.
Ancient Egyptians used
bitumen during the
creation of their mummies
the word mummy is
derived from the Arabic
mmiyyah (bitumen).

The earliest oil wells were

drilled in China around
347CE, with depths of up
to 240m (~800ft). The
drilling was very simple,
with basic drill-bits
attached to bamboo poles.
While the oil was
considered to have value,
at the time it was actually
a secondary commodity
it was burned to evaporate
brine to produce the most
important ancient
commodity of all: salt.

Source: Canadian Society of Exploration Geophysicists

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Drilling a Hole

A modern recreation of drilling technique from the North Song

Dynasty (circa 960 CE). (from Zhong & Huang)

Drilling a Hole

Video spring pole drilling

Source: Getty Images
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Early History of
Petroleum
First Oil Distillation

In the 10th Century, alMasudi, an Arabic

geographer, observed oil
seeps in Azerbajian. He
called the Absheron
penisular in modern
Azerbaijan bilad al-naffata
(the land of the naphtha
fountain).
By this time it is estimated
that 10,000-15,000
people lived in and around
Baku, almost of all of
whom would have been
involved in the industry of
extraction of oil and its
transportation by ship,
cart, or camel.

Extraction methods in
those times were
extremely primitive
mainly hand dug wells at
natural seep locations
taken to a very shallow
depth.
The increased economic
extraction of oil from the
Caspian region was at
least partly facilitated by a
technological breakthrough
refining. Persian
chemists first distilled
kerosene for lighting on an
artisanal scale around the
9th to 10th centuries.

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Distillation Process

The Persians, using elaborate

stills conducted innovative
alchemical experiments in the
9th and 10th centuries CE,
creating solvents for base
metals, elixir of life and also
the first to distill petroleum;
kerosene and kerosene lamps.
From the 12th century CE, the
knowledge became widely
known in Europe during the
Arabic-Latin translation
movement in Spain.

Description of distillation using an alembic (circa 8th century)

Source: History of Science and Technology in Islam

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Early History of
Petroleum
Oil Importance

Al-Hamawi, in his 12th

century book The Book of
All Lands noted that Baku
was one of wealthiest
cities, with two oil fields.
By 1730s these same two
oil fields were still being
extracted and their
combined output was
~3500 tons annually (~80
or 90 barrels oil per day
BOPD). Modest for todays
standards, but more than
half of it was surplus

and thus exported.

In 1745 under the Empress

Elisabeth of Russia the
first oil well and refinery
were built in Ukhta
producing a distilled
kerosene-like substance,
which was used in oil
lamps by Russian churches
and monasteries.
First big mining operations
of oil were from 1745 in
Merkwiller-Pechelbronn,
Alsace by special
appointment of Louis XV.
Across in America, in 1753
a map of oil springs in
Pennsylvania was
published in a book
Travels into North
America.
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Industrial
Revolution

Increasing Demand for Energy

The world changed utterly

and completely after 1760.
It was the Industrial
Revolution which started in
Britain. Cheap coal was
the source of energy.
Kerosene oil was mainly
use for lamps to replace
expensive hard to get
whale oil lamp.
Crucially, steam power,
initially powered by coal,
meant that man could
harness chemical energy
to power engines &
manufactures for the first
time.

Its almost impossible to

convey how radical this
was in a world previously
limited by human strength,
horse power, and wind.
Prior to the Industrial
Revolution economic
growth had broadly just
accommodated the
increase in population;
after the Industrial
Revolution individuals
became richer per capita
GDP grew rapidly..
The GDP increased also
driving demand for more
oil which could not be met
by irregular supply
provided by seep oil.

Source: Madison data based (2008)

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Efficiency
Rotary movement

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m o r e ..

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lights

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Accessing and Gathering Oil

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 labor intensive

Source: sjvgeology.org

Source: spe.org

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21

Drilling Invention

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Early Modern Oil

Industry
Technological Innovation

1848

First modern oil well was drilled in Asia, on

the Aspheron Peninsula north-east of Baku,
by Russian engineer F.N. Semyenov.

1849

Distillation of kerosene process invented

by Canadian geologist Dr. Abraham Gesner.

1854

First oil wells in Europe were drilled 30- to

50-meters deep at Bbrka, Poland.
Ignacy Lukasiewicz from Poland began
producing kerosene from new found oil
wells and creates a new market for crude
oil.
Michael Dietz invented a kerosene lamp
that forces whale oil lamps off the market.

1857
1858

First oil well in North America was drilled in

Ontario, Canada.

1859

First oil well in United States was drilled 69

feet deep at Titusville, Pennsylvania by
Colonel Edwin Drake. Pioneering the use
of drive pipe to prevent borehole collapse.
This led to oil boom in the area.
|

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Steam Engine Drilling Equipment

Wooden tool derrick

Walking beam

Steam boiler engine

Bull wheel

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A cable-tool man in front of

bull wheel

Source: The World Struggle for Oil (1924)

25

Courtesy of the Asbrink Collection

A lack of knowledge about geology led oil

prospectors to drill wells virtually anywhere,
and to drill many wells at a productive site.

Courtesy of the New York Public Library

26

video getting oil to market

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How much
is in
a barrel?

Setting volume
standard

An oil barrel (abbreviated

as bbl) is a unit of volume.
In the United States, an oil
barrel is defined as 42 US
gallons, which is about
159 litres or 35 imperial
gallons

Early Modern Oil

Industry
Oil Production Measurement

Source: aoghs.org

The measurement of an
"oil barrel" originated in the
early Pennsylvania oil
fields. The Drake Well, the
first oil well in the US, was

drilled in Pennsylvania in
1859, and an oil boom
followed in the 1860s.
When oil production
began, there was no
standard container for oil.

Oil and petroleum products

were stored and
transported in barrels of
different shapes and sizes.
Some of these barrels
would originally have been
used for other products,
such as beer, fish, etc.
Both the 42-US-gallon
barrels (based on the old
English wine measure), the
tierce (159 litres) and the
40-US-gallon (151.4-litre)
whiskey barrels were used.
The 40-gallon whiskey
barrel was the most
common size used by early
oil producers, since they
were readily available at
the time.
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Source: aoghs.org

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Around 1866, early oil producers in

Pennsylvania came to the conclusion that
shipping oil in a variety of different
containers was causing buyer distrust.
They decided they needed a standard unit
of measure to convince buyers that they
were getting a fair volume for their money,
and settled on the standard wine tierce
which was two gallons larger than the
standard whisky barrel.
By 1872, the standard oil barrel was firmly
established as 42 US gallons. The 42gallon standard oil barrel was officially
adopted by the Petroleum Producers
Association in 1872 and by the U.S.
Geological Survey and the U.S. Bureau of
Mines in 1882.

Source: aoghs.org

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Courtesy of the Asbrink Collection

Baku oil lake

Many discovered to their dismay that once they hit oil they
had no way to contain all of it. Until caps were added to the
wells vast quantities of oil flowed into the appropriately
named Oil Creek
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The technology to store and

transport oil lagged behind
drilling technologies. Round
wooden storage tanks with
iron hoops, although an
improvement over the
previous box shaped vats,
were still problematic: they
leaked, and were a fire
hazard. Iron tanks were in
use as early as 1862, but the
shift to these tanks was
delayed by iron shortages
caused by the Civil War.

Source: The Robert N. Dennis Collection of Stereoscopic Views

(NYPG91-F314 058f) Courtesy of the New York Public Library

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TRANSPORTING OIL TO
MARKET

Source: Casper College Western History Center

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DELIVERING 45 BARRELS OF OIL

In the early days oil was hauled in strings of wagons pulled by socalled string teams of 12 to 18 horses or mules. The 100-mile
round trip could take a week in good weather, or two weeks in
bad. Teamsters carried shovel and picks, and sometimes were
obliged to create a road as they went.

Source: Drake Well Museum Collection, Titusville, PA

Oil production in Pennsylvania was a major polluter of water and air. In the early days of the
industry, much of the oil drilled in in Titusville area was transported by flatboats down Oil
Creek. The amount of oil lost to the river due to leaky barrels and boating accidents before
reaching refineries in Pittsburgh has been estimated at more than 50%
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For thousands of years, pipelines have been

constructed in various parts of the world to convey
water for drinking and irrigation. This includes ancient
use in Chinese of pipe made of hollow bamboo and
the use of aqueducts by the Romans and Persians.
The Chinese even used bamboo pipe to transmit
natural gas to light their capital, Peking as early as
400 BCE.
A significant improvement of pipeline technology took
place in 18th century, when cast-iron pipes were used
commercially. Another major milestones was the
advent in 19th century of steel pipe, which greatly
increased the strength of pipes of all sizes.
Initially pipes had to be threaded together. This was
difficult to do for large pipes, and they were apt to leak
under high pressure. Invention of pipe welding joint in
1920s made it possible to construct better pipelines.
Alaskan oil pipeline Index Open

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Early pipelines installation for oil.

Source: Marathon oil

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Pioneer Refinery - 1876

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Typical Oil Refinery (circa 1886)

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STANDARD OIL Refinery No.1 (circa 1897)

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UNTIL 1900

Refinery Products
KEROSENE illuminating oil
LUBRICANTS - grease

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AUTOMOBILE INVENTION

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Oil in
Indonesia

Beginning 20th
century
oil production was
dominated by three
regions: the U.S., Russia
and the Dutch East Indies.

OIL Findings in Indonesia

Karawang Java (1850)

Langkat Sumatra (1880)
Sanga-Sanga Kalimantan (1893)
Klamono Papua (1938)
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Cepu (circa 1900) Drilling derrick tower and activity at train station loading
drums of oil
Source: Tropen Museum

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First well drilling around

Balikpapan area (circa 1896)
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Tarakan port (circa 1925) loading drums of oil for export

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