Introduction to

Oil Industry
 What is petroleum?
 Crude oil, or petroleum, is an organic substance derived from
the remains of prehistoric plant and animal remains.
Also known as fossil fuels.
 Hydrocarbons are molecules containing hydrogen and
carbon.

+ =
Plankton ?
 How was oil formed?
 Crude oil was formed from the remains
of dead sea creatures and plants
(plankton). The organic material
remains gathered on the seabed and
were gradually covered by layers of
sand and other sediments.

 Over time these layers were

compressed under the weight of
sediments laid on top. The increased
pressure and temperature changed the
organic material, sand and other
sediments into rock. The sand became
sandstones or potential reservoir rocks.
The organic rich layers became oil and
shale or oil source rocks.
 Where do we find oil in the source
rock ?
 Because oil and gas are lighter
than water, they float on top of
water. Oil and gas that formed in
the source rock deep within the
earth floated up through tiny
pore spaces in the rock.

 Reservoirs contain porous rocks,

such as sandstones, that allow
fluids to flow through the pore Does this rock have good porosity?
spaces, that is, that are How about permeability?
permeable.
Occurrence of Petroleum
 3 phases of petroleum

Exists as a:
• liquid
– crude oil
• vapor
– natural gas
• solid
– coal
– oil sands
How the oil is found...
 Drilling rigs
• Drilling rigs use a drill
stem and a drill bit to
grind down through the
overlaying rock to get to
the oil and gas below.
• Drill rigs run 24 hours a
day, 7 days a week.
• Cost to drill : (2010 average)
– Vertical
well ~$450,000 +
– Horizontal
well~$937,607 +
 Drill Bits
• Mud sprays down the drill stem through the nozzles
on the drill bit. The mud lubricates the drill bit
preventing friction and heat from wearing out the
bit. Mud also takes debris up through the drilled
hole.

Tri- Cone Bit Poly- Crystalline Diamond Bit

 Horizontal Drilling
• A horizontal well is drilled
vertically until the kick off
point is reached. At this
point the well is angled
until it meets the targeted
producing formation. The
wellbore is then drilled
horizontally through this
reservoir. Horizontal wells
provide for a greater
drainage area than a
conventional vertical well
and therefore are generally
more productive.
 Vertical Drilling
• A hole drilled vertically
into the earth usually
cased with metal pipe
for the production of oil
or gas. Prior to 2006
most wells were drilled
vertically but new
drilling and completion
techniques have made
horizontals wells
economic
 Directional Drilling
• The technique of drilling
at an angle. These wells
are drilled for a number
of reasons: to develop
an offshore lease from
one platform; to reach a
zone beneath land
where drilling cannot be
done (beneath a railroad
or lake)
 Artificial lift
• If the formation does not have enough
pressure to push liquids to the surface some
type of artificial lift system will have to be put
in place.

• Types of artificial lift: pump jacks with bottom

hole pumps, submersible pumps and
progressive cavity pumps.
Pump jack with bottom hole pump

The purpose of a pump jack is to convert circular

motion into up and down motion to control and
operate the bottom hole pump
 So now what?
• Okay, the fluid is to surface, now what?

– Is it a saleable product?

– Can you put this fluid directly into your car?

– What actually comes out of the ground?

 Emulsion
• Did you know that oil and water really do mix?

Emulsion after being shaken Less than 1 minute later

• Emulsion is a mixture of oil, water and gas

 What is a battery?
• If you’re thinking Duracell™ or Energizer ™ you
are way off!

?
 Battery
• "battery" means a system
or arrangement of tanks or
other surface equipment
that receives fluid from, or
delivers fluid to, one or
more wells, and includes
an injection plant, a pump
station and equipment or a
device designed to
separate the fluid into oil,
gas and water and to
measure the amount of oil,
gas and water; The Oil and
Gas Act
 What is done with the oil?
• When the crude oil is clean it is ready to be
hauled to a pipeline and sold.

Sales shipping line Enbridge pipeline tank

 What is done with the water?
• The water that is separated out of the emulsion is
salt water, also called brine.
• Extreme care must be given to its disposal.
• Salt water is re-injected into the formation, which
helps restore the reservoir pressures.

The re-injection process is

also called waterflood or
secondary recovery
 Mineral Rights & Surface Rights
• Mineral Rights: It is the right of the owner to exploit, mine,
and/or produce any or all of the minerals lying below the
surface of the property.
Crown Mineral Rights – 100% of the mineral ownership belongs to the
Crown (Provincial Government)
Portional Mineral Rights - A Portion of the mineral rights are Crown and a
portion are Freehold (private)
Freehold Mineral Rights - 100% of the mineral ownership belongs to a
private (freehold) owner.
Approximately 80% of the mineral rights are owned by private individuals
or companies, the remaining 20% are owned by the Crown in the right of
Manitoba.

• Surface Rights - The landowner owns the surface rights to

the land and may or may not also own the minerals.
 Rehabilitation
• This battery site was rehabilitated and has been
brought back to it’s original agricultural state. All
oil field infrastructure is to be brought back to it’s
original state and is regulated and administered
by the Petroleum Branch.
 Safety
• The Petroleum Branch inspectors are also
Workplace Health and Safety officers who are
responsible for enforcing a Safe work
environment for oil field workers.
Thank You
PREPARED BY ANUBAHV COMMITTEE
FOR UPES SPE STUDENT CHAPTER

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