Oil and Gas

CHAPTER IV
UPSTREAM OIL AND GAS SECTOR
Upstream oil and gas production and operations identify deposits, drill wells, and recover
raw materials from underground. They are also often called exploration and production
companies. This sector also includes related services such as rig operations, feasibility studies,
machinery rental, and extraction of chemical supply. Many of those employed in the upstream
part of the industry include geologists, geophysicists, service rig operators, engineering firms,
scientists, and seismic and drilling contractors. These people are able to locate and estimate
reserves before any of the actual drilling activity starts.
Learning Objectives:
By the end of this chapter, students will be able to:
1. Discuss the oil and gas exploration phase.
2. Identify the different exploration and drilling techniques.
3. Determine the different types of well.
4. Illustrate the basic parts of rotary drilling rig and their types and functions.
Gaining Access Phase
The first step an oil company will undertake in hydrocarbon exploration and production is to
decide what regions of the world are of interest. This will involve evaluating the technical,
political, economic, social and environmental aspects of regions under consideration. Technical
aspects will include the potential size of hydrocarbons to be found and produced in the region,
which will involve scouting studies using publicly available information or commissioning
regional reviews, and a consideration of the technical challenges facing exploration and
production, for example in very deep offshore waters.
Political and economic considerations include political regime and Government stability, the
potential for nationalisation of the oil and gas industry, current embargoes, fiscal stability and
levels of taxation, constraints on repatriation of profits, personnel security, local costs, inflation
and exchange rate forecasts. Social considerations will include any threat of civil disorder, the
availability of local skilled workforce and local training required, the degree of effort which will
be required to set up a local presence and positively engage the indigenous people. The company
will also consider the precautions needed to protect the environment from harm during
operations, and any specific local legislation. There may also be a reputational issue to consider
when doing business in a country whose political or social regime does not meet with the
approval of the company’s home Government or shareholders. Finally, an analysis of the
competition will indicate whether the company has any advantage. It may be that if the company
has an existing presence in-country from another business interest, such as downstream refining
or distribution, the experience from these areas could be leveraged.
Exploration Phase
The role of exploration is to provide the information required to exploit the best
opportunities presented in the choice of areas, and to manage research operations on the
acquired blocks. An oil company may work for several years on a prospective area before
an exploration well is spudded and during this period the geological history of the area
is studied and the likelihood of hydrocarbons being present quantified.
Figure 1. Phasing and expenditure of atypical exploration programme.
The objective of any exploration venture is to find new volumes of hydrocarbons at a low
cost and in a short period of time. Exploration budgets are in direct competition with acquisition
opportunities. If a company spends more money finding oil than it would do to buy the
equivalent amount ‘in the market place’ there is little incentive to continue exploration.
Conversely, a company which manages to find new reserves at low cost has a significant
competitive edge since it can afford more exploration, find and develop reservoirs more
profitably and can target and develop smaller prospects.
Once an area has been selected for exploration, the usual sequence of technical activities
starts with the definition of a basin. The mapping of gravity anomalies and magnetic anomalies
will be the first two methods applied. In many cases this data will be available in the public
domain or can be bought as a ‘non exclusive’ survey. Next, a coarse two-dimensional (2D)
seismic grid, covering a wide area, will be acquired in order to define leads, areas which show
for instance a structure which potentially contains an accumulation (seismic methods will be
discussed in more detail in the next section). Recently electro-magnetic techniques have also
been deployed at this stage to assist in the delineation of basins and the identification of potential
hydrocarbon accumulations. A particular exploration concept, often the idea of an individual or a
team will emerge next. Since at this point very few hard facts are available to judge the merit of
these ideas they are often referred to as ‘play’. More detailed investigations will be integrated to
define a ‘prospect’, a subsurface structure with a reasonable probability of containing all the
elements of a petroleum accumulation, namely source rock, maturation, migration, reservoir rock
and trap.
Eventually, only the drilling of an exploration well will prove the validity of the concept.
A ‘wildcat’ well is drilled in a region with no prior well control. Wells either result in discoveries
of oil and gas, or they find the objective zone to be water-bearing in which case they are termed
‘dry’. Exploration activities are potentially damaging to the environment. The cutting down of
trees in preparation for an onshore seismic survey may result in severe soil erosion in years to
come. Offshore, fragile ecological systems such as reefs can be permanently damaged by spills
of crude or mud chemicals. Responsible companies will therefore carry out an environmental
impact assessment (EIA) prior to activity planning and draw up contingency plans should an
accident occur. x
Figure 2. Basin Modelling- petroleum System

Exploration Techniques
1. Introduction to geophysical methods
Geophysical methods respond to variations in physical properties of the earth’s
subsurface including its rocks, fluids and voids. They locate boundaries across which changes in
properties occur. These changes give rise to an anomaly relative to a background value; this
anomaly is the target which the methods are trying to detect.
It is important to remember that the mere acquisition and processing of data do not
guarantee success of a survey: information is not equal to knowledge. Interpretation of
geophysical data should always be carried out within a sound geological framework. Often
several methods are used to complement one another or they are used in conjunction with other
disciplines to develop a geologically.
1. Gravity surveys
The gravity method measures small variations of the earth’s gravity field caused by
density variations in geological structures. The measuring tool is a sophisticated form of spring
balance designed to be responsive over a wide range of values. Fluctuations in the gravity field
give rise to changes in the spring length which are measured (relative to a base station value) at
various stations along the profile of a 2D network. The measurements are corrected for
latitudinal position and elevation of the recording station to define the ‘Bouguer’ anomaly.
2. Magnetic surveys
The magnetic method detects changes in the earth’s magnetic field caused by variations
in the magnetic properties of rocks. In particular, basement and igneous rocks are relatively
highly magnetic. If they are located close to the surface they give rise to anomalies with a short
wavelength and high amplitude. The method is airborne (plane or satellite) which permits rapid
surveying and mapping with good areal coverage. Like the gravity technique this survey is often
employed at the beginning of an exploration venture.
3. . CSEM seabed logging
Controlled source electro-magnetic (CSEM) surveying or seabed logging is a remote
sensing technique which uses very low frequency electro-magnetic signals emitted from a source
near the seabed.
2. Seismic acquisition and processing

Seismic surveys involve generating sound waves which propagate through the earth’s rocks
down to reservoir targets. The waves are reflected to the surface, where they are registered in
receivers, recorded and stored for processing. The resulting data make up an acoustic image of
the subsurface which is interpreted by geophysicists and geologists.
Figure 2. Seismic Surveying

Seismic surveying is used in:
✓ exploration for delineating structural and stratigraphic traps
✓ field appraisal and development for estimating reserves and drawing up FDPs
✓ production for reservoir surveillance such as observing the movement of reservoir
fluids in response to production.
Geological mapping and prospecting

Geological mapping and prospecting are valuable techniques in an petroleum
exploration. It is basically a technique which allows a graphical presentation of
geological observations and interpretations. Geological prospecting make use of geological
disciplines such as petrography, stratigraphy, sedimentology, structural geology,
geochemistry. Such disciplines are used to achieve different targets but it must be stressed
that their integration is fundamental to depict a picture of reality.
Drilling
An initial successful exploration well will establish the presence of a working petroleum
system. In the following months, the data gathered in the first well will be evaluated and the
results documented. The next step will be the appraisal of the accumulation requiring more wells.
If the project is subsequently moved forward, development wells will have to be engineered. The
following section will focus on these drilling activities, and will also investigate the interactions
between the drilling team and the other E&P functions.
Well Planning
The drilling of a well involves a major investment, ranging from a few million US$ for
an onshore well to 100 million US$ plus for a deepwater exploration well. Well engineering is
aimed at maximising the value of this investment by employing the most appropriate technology
and business processes, to drill a ‘fit for purpose’ well, at the minimum cost, without
compromising safety or environmental standards.
Successful drilling engineering requires the integration of many disciplines and skills.
Successful drilling projects will require extensive planning.
Usually, wells are drilled with one, or a combination, of the following objectives:
✓ to gather information
✓ to produce hydrocarbons
✓ to inject gas or water to maintain reservoir pressure or sweep out oil
✓ to dispose of water, drill cuttings or CO2 (sequestration)
Wellhead locations, well design and trajectory are aimed at minimising the combined costs of
well construction and seabed/surface facilities, whilst maximising production.
Types of Well
Well can be classified according to the types of fluid produced, its location and its purpose.
These are the types of wells based on its purpose.
• Wildcat wells are drilled where little or no known geological information is available.
The site may have been selected because of wells drilled some distance from the
proposed location but on a terrain that appeared similar to the proposed site. Individuals
who drill wildcat wells are known as 'wildcatters'.
• Exploration wells are drilled purely for exploratory (information gathering) purposes in a
new area, the site selection is usually based on seismic data, satellite surveys etc. Details
gathered in this well includes the presence of hydrocarbon in the drilled location, the
amount of fluid present and the depth at which oil or/and gas occurs.
• Appraisal wells are used to assess characteristics (such as flow rate, reserve quantity) of a
proven hydrocarbon accumulation. The purpose of this well is to reduce uncertainty
about the characteristics and properties of the hydrocarbon present in the field.
• Production wells are drilled primarily for producing oil or gas, once the producing
structure and characteristics are determined.
• Development wells are wells drilled for the production of oil or gas already proven by
appraisal drilling to be suitable for exploitation.
• Abandoned wells are wells permanently plugged in the drilling phase for technical
reasons.
Drilling the Exploration well
Once geological and geophysical information have defined and evaluated
(technically and economically) the drillable prospect, it is possible to move to a
fundamental phase of the exploration project – the drilling of the first exploratory well.
The drilling of the exploration well is aimed to confirm the presence of the petroleum
accumulation.
Well logging
The well logging technique consists of lowering a ‘logging tool’ into the well to
acquire geological data and to reveal reservoir fluids characteristics. Well logging help
geoscientists and engineers to understand: Presence of reservoir Presence of hydrocarbons and
characteristics Reservoir properties, etc.
Coring
Coring provides the only means of obtaining highquality samples for the direct
measurement of rock and reservoir properties. Core samples are then used to perform
Routine Core Analysis and/or Special Core Analysis to obtain detailed petrophysical data.
Rig Types and Rig Selection
The type of rig which will be selected depends upon a number of parameters, in particular:
1. cost and availability
2. water depth of location (offshore)
3. mobility/transportability (onshore)
4. depth of target zone and expected formation pressures
5. prevailing weather/metocean conditions in the area of operation
6. experience of the drilling crew (in particular the safety record!)
The following types of rig can be contracted for offshore drilling:
1. Swamp barges operate in very shallow water (less than 20ft). They can be towed onto
location and are then ballasted so that they ‘sit on bottom’. The drilling unit is mounted
onto the barge. This type of unit is used in the swamp areas of, for example Nigeria,
Venezuela and US Gulf Coast.
2. Drilling jackets are small steel platform structures which are used in areas of shallow
and calm water. A number of wells may be drilled from one jacket. If a jacket is too small
to accommodate a drilling operation, a jack-up rig is usually cantilevered over the jacket
and the operation carried out from there. Once a viable development has been proven, it
is extremely cost-effective to build and operate jackets in a shallow sea environment. In
particular, they allow a flexible and step-wise progression of field development activities.
Phased developments using jackets are common in coastal waters, for example South
China Sea and the shelf GoM. Wells drilled from large production platforms in the North
Sea are drilled in a similar fashion.
3. Jack-up rigs are either towed to the drilling location (or alongside a jacket) or are
equipped with a propulsion system. The three or four legs of the rig are lowered onto the
seabed. After some penetration the rig will lift itself to a determined operating height
above the sea level. If soft sediment is suspected at seabed, large mud mats will be placed
on the seabed to allow a better distribution of weight. All drilling and supporting
equipment are integrated into the overall structure. Jack-up rigs are operational in water
depths up to about 450ft and as shallow as 15ft. Globally, they are the most common rig
type, used for a wide range of environments and all types of wells.
4. Semi-submersibles are used for exploration and appraisal in water depths too great for a
jack-up. A semi-submersible rig is a movable offshore vessel consisting of a large deck
area built on columns of steel. Attached to these heavy-duty columns are at least two
barge-shaped hulls called pontoons. Before operation commences on a specified location,
these pontoons are partially filled with water and submersed in approximately 50ft of
water to give stability. A large-diameter steel pipe (riser) is connected to the seabed and
serves as a conduit for the drill string. The blowout preventer (BOP) is also located at the
seabed (subsea stack). Heavy-duty semi-submersibles, for example Deepwater Horizon
(rated 15,000psi), can handle high reservoir pressures and operate in the most severe
metocean conditions in water depths down to 3000m.
5. Drill ships are used for deep and very deep water work. They can be less stable in rough
seas than semi-submersibles. However, modern high-specification drill ships such as
Discoverer Enterprise can remain stable, and on target during 100knot winds using
powerful thrusters controlled by a DP system. The thrusters counter the forces of
currents, wind and waves to keep the vessel exactly on target, averaging less than 2m off
her mark, without an anchor. Heavy-duty drill ships are capable of operating in water
depths up to 3000m.
In some cases, oil and gas fields are developed from a number of platforms. Some platforms
will accommodate production and processing facilities as well as living quarters. Alternatively,
these functions may be performed on separate platforms, typically in shallow and calm water. On
all offshore structures, however, the installation of additional weight or space is costly. Drilling
is only carried out during short periods of time if compared to the overall field life span and it is
desirable to have a rig installed only when needed. This is the concept of tender-assisted drilling
operations.
Drilling Systems and Equipment

Whether onshore or offshore drilling is carried out, the basic drilling system employed in both
the cases will be the rotary rig. The parts of such a unit and the three basic functions carried out
during rotary drilling operations are as follows:
Figure 3. The basic rotary rig
Components of Drill String
The drill string assembly consists primarily of the kelly, drill pipe, bottom hole assembly
(BHA), and drill bit. The drilling fluid and rotational power are transmitted from the surface to
the bit through the drill string.
The usual arrangement of drill string components and bit. The drill pipe section contains
conventional drill pipe, and heavy weight pipe. The drill pipe is attached with a square or
hexagonal pipe called kelly at the upper end of the drill string. Th e BHA may contain the
following items such as: i) drill collars, ii) stabilizers, iii) jars, iv) reamers, v) shock subs, and vi)
bit sub. In addition, the drill string may include shock absorbers, junk baskets, drilling jars,
reamers, and other equipment. There are some special tools in the BHA or drill pipe, which may
include monitor-while-drilling (MWD) tools, and drill stem-testing tools. Finally there exists
drill bit at the lower end of the drill string. Heavy walled large-diameter drill collars furnish bit
load.
The drill bit is attached to the drill collars by means of a bit sub. For an effective rock
cutting, the lower part of the drill collar is stacked onto the drill bit to provide the WOB. The
drill cuttings generated by the rock bit are removed from the bottom of the hole by the drilling
fluid, which is circulated inside the drill string and through the drill bit into the annular space
between the drill string and the bottomhole wall. Stabilizers are placed above the bit to control
the direction in which the drill bit penetrates the formation. Downhole motors with bent subs and
rotary-steerable tools are also used for controlling the direction in which the bit drills.
Figure 4. Drill String Assembly
After the drilling has progressed for some time, a new piece of drill pipe will have to be
added to the drill string. Alternatively, the bit may need to be replaced or the drill string has to be
removed for logging. In order to ‘pull out of hole’, hoisting equipment is required. On a basic
rotary rig this consists of the hook which is connected to the travelling block. The latter is moved
up and down via a steel cable (block line) which is spooled through the crown block onto a drum
(draw works). The draw works, fitted with large brakes, move the whole drill string up and down
as needed. The derrick or mast provides the overall structural support to the operations described.
For various reasons, such as to change the bit or drilling assembly, the drill string may have to be
brought to surface. It is normal practice to pull ‘stands’ consisting of 90ft sections of drill string
and rack them in the mast rather than disconnecting all the segments. The procedure of pulling
out of hole (POOH) and running in again is called a round trip.
Drill bits
The drill bit is an important component in the drill string. The bit drills the rock in many
mechanisms. The drilling bit is selected according to the formation to be drilled. There are two
main types of drilling bits: Roller cone bits, fixed cutter bit.
Figure 5. Drill Bit Types

Roller Cone Bit
They are also called tri-cone bits. The cutting structures are mounted on three rolling
cones and all these cones are attached to main bit body. There are two main types of tri-cone
bits:
Mill tooth bits

These types of bits have steel teeth which are milled on the cones. The size and shape of
teeth vary according to the formation to be drilled. In soft formation, the teeth are long and
slender, where in hard formation the teeth are short and broad.
Figure 6. Mill Tooth Bits
Insert bits
In these types of bits, the teeth are not milled into the cones, instead of that, tungsten carbide
inserts are pressed into the cones. These technics make the bits much harder and can last longer
when drilling through hard formation. The size and shape of teeth also depend on the formation
to be drilled, the teeth can be long and chisel shapes in soft formation, and for hard formation can
be short and round shapes.
Figure 7. Insert Drilling Bit

Fixed Cutter Drilling Bits:
Fixed cutter bit has no moving parts; the cutting structures and bit body rotate as one part. The
main types of these bits are: PDC (polycrystalline diamond compact), TSP (thermally stable
PDC) and diamond bits.
Figure 8. Types of Fixed Cutter Drill Bits
TSP Drilling Bits

It was noticed that the bonding materials are the weakest part of the cutter. Under the high
temperature at the bottom while drilling, the bonding materials lose their strength. The TSP bits
are composed with same artificial diamond without using the bonding materials.
Figure 9. TSP Drilling Bit
The PDC Drilling Bits

This type of bits can be used for different formations from soft to hard. The PDC bit has cutters
which consist of a layer of artificial diamond (polycrystalline diamond). Using a high pressure
high temperature technique the polycrystalline diamond is bonded on layer of cementer tungsten
carbide.
The cutter is self-sharpening because the sharp crystals are exposed continuously as each layer
wears or disappears.
The polycrystalline diamond is bonded to studs of tungsten carbide, which are then pressed into
holes on the head of the bit. The cutters are placed in a helical pattern on the face of the bit. This
combination results to a cutter which has wear resistance and hardness of diamond, and also
impact resistance and strength of tungsten carbide.
The bit body is forged with same high steel used to make the cones of the tri-cone bits, and in
order to reinforce the bit against fluid erosion, the face of the bit is coated by a layer of tungsten
carbide.
Figure 10. PDC Drilling Bits
Diamond Drilling Bits:

The natural diamond bits are used to drill through very hard abrasive formation. This type of bits
was developed from mining industry. The main advantages of this type of bits are their
longevity, reduced number of run bits and tripping time to get to the next casing point.
There are also some drawbacks of using a natural diamonds bits. The slow rate of penetration is
one of the main down sides of using this kind of bits. The diamonds are set into a steel body;
roughly two thirds of the cutter length is embedded into the bit head which can cause easy balled
bits in soft formation, for this reason the natural diamonds bits are used for hard, abrasive
formations.
The natural diamond bits require relatively high RPM and moderate WOB. High hydraulic
horsepower is not a major requirement, so the jet nozzles are not used. The drilling fluids flow
through orifices then by flow channels cut into the bit head to promote cutter cooling and
cleaning.
Figure 11. Diamond Bit

CHAPTER IV
THE MIDSTREAM SECTOR
The ‘midstream’ segment of the oil and natural gas

industry refers to anything required to transport and store
crude oil and natural gas before they are refined and processed
into fuels and key elements needed to make a very long list of
products we use every day. Midstream includes pipelines and
all the infrastructure needed to move these resources long
distances, such as pumping stations, tank trucks, rail tank cars
and transcontinental tankers.
Midstream operations are designed to transport hydrocarbons
from upstream production operations to downstream refining
and processing operations. Many modes of transportation are
used to transport oil and gas. They include pipelines, tanker
trucks and ships, and trains. The mode of transport depends on
such factors as safety, distance, and state of the fluid. For
example, pipelines are often the first choice for transportation. But there are many obstacles to
building a network of pipelines capable of transporting produced hydrocarbons from upstream to
downstream operations.
Laying pipelines is a construction project that requires specialized heavy equipment, as

shown in Figure 2. Pipelines are used to transport fluids both onshore and offshore. The transport
distance can be a few miles to thousands of miles. A right of way is required to lay pipelines, which
involves negotiating with stakeholders that control the right of way.
Figure 2
Pipelines that transport fluids over long distances usually need compressor stations or
pump stations to keep fluids moving. Gas compression can also maximize use of space in the
pipeline by increasing the density of gas flowing through the pipeline. A gas compressor is shown
in Figure3 . The metal wall helps mitigate the amount of noise that reaches neighborhoods on the
other side of the wall. The number and location of compressor stations and pump stations depends
on distance traveled and terrain. Pipelines are built over several different types of terrain, such as
plains, mountain ranges, deserts, swamps, frozen tundra, and bodies of water.
Figure 3
The type of terrain impacts construction and maintenance. Hostile environments such as
the desert, Arctic tundra, and North Sea increase the difficulty and cost of constructing a pipeline.
Maintenance is needed to prevent pipeline leaks. Pipelines can leak if they crack or burst.
Hydrocarbon leaks are harmful to the environment and can impact community support for the
pipeline.
Pipeline maintenance helps keep fluids moving efficiently. For example, gas flowing in a
pipeline can contain water dissolved in the gas phase. Pressure and temperature conditions change
over the length of the pipeline. Under some conditions, water can drop out of the gas phase and
form a separate water phase that affects gas flow along the pipeline. Pistonlike scrubbing devices
called “pigs” are run through pipelines to displace liquid phases to exit points along the pipeline
route. Pipeline pigs are driven by the flow of fluids in the pipeline. They remove unwanted debris
such as water and residual wax inside the pipeline. Intelligent pigs contain sensors that can be used
to inspect the internal pipeline walls and identify possible problems such as corrosion.
Pipelines often pass through multiple jurisdictions. The route may be within a nation or
cross‐national borders. This introduces a geopolitical component to midstream operations. It can
also require security in regions of political instability.
Other oil and gas transportation modes include trucks, trains, barges, and tankers. Trucking
is the most versatile form of transportation on land because trucks can travel to virtually any land‐
based destination. Transportation by rail can be a costeffective and efficient mode of transporting
large volumes of oil. Barges and tankers transport oil and gas over bodies of water ranging from
rivers to oceans. Transportation requires moving a commodity from one point to another. It is often
necessary to provide facilities that gather and store fluids at the upstream site and provide storage
facilities at the downstream site. This requires gathering and processing operations, as well as
terminal developers and operators. Gathering lines are smaller diameter pipelines that connect
wells to larger diameter trunk lines. Large volumes of gas and oil can be stored in spherical and
cylindrical storage tanks, salt caverns, and depleted reservoirs. Stored gas is considered either base
gas or working gas. Base gas is the amount of gas that remains in the storage facility to maintain
a safe operating pressure. Working gas is the amount of gas that can be withdrawn from the storage
facility for use. In some cases, gas may need to be parked, that is, stored temporarily. Parking may
be used by a customer until a better price can be obtained for the customer’s gas. Demand for gas
is seasonal, which is another reason to store gas temporarily until demand increases.
Midstream operations are sometimes classified within the downstream sector, but these operations
compose a separate and discrete sector of the petroleum industry
Midstream operations and processes include the following
a) Gathering: The gathering process employs narrow, low pressure pipelines to connect oil
and gas producing wells to larger, long haul pipelines or processing facilities
b) Transportation: Oil and gas are transported to processing facilities, and from there to end
users, by pipeline, tanker/barge, truck, and rail. Pipelines are the most economical
transportation method and are most suited to movement across longer distances, for
example, across continents Tankers and barges are also employed for long distance, often
international transport Rail and truck can also be used for longer distances but are most
cost effective for shorter routes
c)Storage: Midstream service providers provide storage facilities at terminals throughout the
oil and gas distribution systems These facilities are most often located near refining and
processing facilities and are connected to pipeline systems to facilitate shipment when product
demand must be met While petroleum products are held in storage tanks, natural gas tends to
be stored in underground facilities, such as salt dome caverns and depleted reservoirs.
d) Technological applications: Midstream service providers apply technological solutions to
improve efficiency during midstream processes. Technology can be used during compression
of fuels to ease flow through pipelines; to better detect leaks in pipelines; and to automate
communications for better pipeline and equipment monitoring.
While some upstream companies carry out certain midstream operations, the midstream
sector is dominated by a number of companies that specialize in these services.
CHAPTER VI
DOWNSTREAM SEGMENT
INTRODUCTION
In the crude state, petroleum has minimal value, but when refined, it provides
high-value liquid fuels, solvents, lubricants, and many other products (Speight and Ozum, 2002;
Parkash, 2003; Hsu and Robinson, 2006; Gary et al., 2007; Speight, 2011a,b, 2014). The fuels
derived from petroleum contribute approximately one-third to one-half of the total world energy
supply and are used not only for transportation fuels (i.e., gasoline, diesel fuel, and aviation fuel,
among others) but also to heat buildings. Petroleum products have a wide variety of uses that
vary from gaseous and liquid fuels to near-solid machinery lubricants. In addition, the residue of
many refinery processes, asphalt—a once-maligned by-product—is now a premium value
product for highway surfaces, roofing materials, and miscellaneous waterproofing uses.
LEARNING OBJECTIVES
By the end of this chapter, the students will be able to:
1. Discuss the importance of the downstream industry.
2. Identify the classification of processes in petroleum refining.
3. Identify the different refinery configurations.
4. Illustrate and explain the processes involved in petroleum refining.
5. Identify the different petroleum products.
In a very general sense, petroleum refining can be traced back over 5000 years to the
times when asphalt materials and oils were isolated from areas where natural seepage occurred
(Abraham, 1945; Forbes, 1958; Hoiberg, 1960). Any treatment of the asphalt (such as hardening
in the air prior to use) or of the oil (such as allowing for more volatile components to escape
prior to use in lamps) may be considered to be refining under the general definition of refining.
However, petroleum refining as we know it is a very recent science and many innovations
evolved during the twentieth century.
Briefly, petroleum refining is the separation of petroleum into fractions and the
subsequent treating of these fractions to yield marketable products (Speight and Ozum, 2002;
Parkash, 2003; Hsu and Robinson, 2006; Gary et al., 2007; Speight, 2011a,b, 2014). In fact, a
refinery is essentially a group of manufacturing plants that vary in number with the variety of
products produced.
As the basic elements of crude oil, hydrogen and carbon form the main input into a
refinery, combining into thousands of individual constituents, and the economic recovery of
these constituents varies with the individual petroleum according to its particular individual
qualities and the processing facilities of a particular refinery. In general, crude oil, once refined,
yields three basic groupings of products that are produced when it is broken down into cuts or
fractions as shown in Figure 1.
Figure 1. Boiling Fractions of Petroleum
The gas and gasoline cuts form the lower-boiling products and are usually more valuable
than the higher boiling fractions and provide gas (liquefied petroleum gas), naphtha,
aviation fuel, motor fuel, and feedstocks for the petrochemical industry.
Figure 2. Product of Starting Materials for Petrochemicals
Naphtha, a precursor to gasoline and solvents, is produced from the light and middle
range of distillate cuts (sometimes referred to collectively as light gas oil) and is also used as a
feedstock for the petrochemical industry.
Figure 3. Sources of Naptha

The middle distillates refer to products from the middle boiling range of petroleum and
include kerosene, diesel fuel, distillate fuel oil, and light gas oil. Waxy distillate and
lower-boiling lubricating oils are sometimes included in the middle distillates. The remainder of
the crude oil includes the higher-boiling lubricating oils, gas oil, and residuum (the nonvolatile
fraction of the crude oil). The residuum can also produce heavy lubricating oils and waxes but is
more often sued for asphalt production. The complexity of petroleum is emphasized insofar as
the actual proportions of light, medium, and heavy fractions vary significantly from one crude oil
to another.
The means by which a refinery operates in terms of producing the relevant products
depends not only on the nature of the petroleum feedstock but also on its configuration (i.e., the
number of types of the processes that are employed to produce the desired product slate), and the
refinery configuration is, therefore, influenced by the specific demands of a market. Therefore,
refineries need to be constantly adapted and upgraded to remain viable and responsive to
ever-changing patterns of crude supply and product market demands. As a result, refineries have
been introducing increasingly complex and expensive processes to gain higher yields of
lower-boiling products from the higher-boiling fractions and residua.
Refinery Process Categories

To convert crude oil into desired products in an economically feasible and
environmentally acceptable manner, refinery processes for crude oil are generally divided into
three categories:
(1) separation processes, of which distillation is the prime example;
(2) conversion processes, of which coking and catalytic cracking are prime example; and
(3) finishing processes, of which hydrotreating to remove sulfur is a prime example.
Topping Refinery
The simplest refinery configuration is the topping refinery, which is designed to prepare
feedstocks for petrochemical manufacture or for the production of industrial fuels. The topping
refinery consists of tankage, a distillation unit, recovery facilities for gases and light
hydrocarbons, and the necessary utility systems (steam, power, and water-treatment plants).
Topping refineries produce large quantities of unfinished oils and are highly dependent on
local markets, but the addition of hydrotreating and reforming units to this basic configuration
results in a more flexible hydroskimming refinery, which can also produce desulfurized
distillate fuels and high-octane gasoline. These refineries may produce up to half of their output
as residual fuel oil, and they face increasing market loss as the demand for low-sulfur (even
no-sulfur) high-sulfur fuel oil increases.
Conversion Refinery
The most versatile refinery configuration is the conversion refinery. A conversion
refinery incorporates all the basic units found in both the topping and hydroskimming refineries,
but it also features gas oil conversion plants such as catalytic cracking and hydrocracking units,
olefin conversion plants such as alkylation or polymerization units, and, frequently, coking units
for sharply reducing or eliminating the production of residual fuels.
Finishing Process
Finally, the yields and quality of refined petroleum products produced by any given oil
refinery depend on the mixture of crude oil used as feedstock and the configuration of the
refinery facilities. Light/sweet crude oil is generally more expensive and has inherent great yields
of higher-value low boiling products such as naphtha, gasoline, jet fuel, kerosene, and diesel fuel.
Heavy sour crude oil is generally less expensive and produces greater yields of lower-value
higher-boiling products that must be converted into lower-boiling products (Speight, 2013,
2014).
Dewatering and Desalting

The first step in petroleum processing, even before the crude oil enters the refinery,
occurs at the wellhead (Abdel-Aal et al., 2016). It is at this stage that fluids from the well
are separated into crude oil, natural gas, and water phases using a gas–oil separator. Even after
this type of separation and before separation of petroleum into its various constituents can
proceed, there is the need to clean the petroleum. This is often referred to as desalting and
dewatering in which the goal is to remove water and the constituents of the brine that accompany
the crude oil from the reservoir to the wellhead during recovery operations.
If the petroleum from the separators contains water and dirt, water washing can remove
much of the water-soluble minerals and entrained solids. If these crude oil contaminants are not
removed, they can cause operating problems during refinery processing, such as equipment
plugging and corrosion as well as catalyst deactivation.
Figure 4. Desalting Process of Crude Oil
Listed below are 5 categories of general refinery processes and associated operations:
1. Separation processes
a. Atmospheric distillation
b. Vacuum distillation
c. Light ends recovery (gas processing)
2. Petroleum conversion processes

a. Cracking (thermal and catalytic)
b. Reforming
c. Alkylation
d. Polymerization
e. Isomerization
f. Coking
g. Visbreaking
3. Petroleum treating processes

a. Hydrodesulfurization
b. Hydrotreating
c. Chemical sweetening
d. Acid gas removal
e. Deasphalting
4. Feedstock and product handling

a. Storage
b. Blending
c. Loading
d. Unloading
5. Auxiliary facilities
a. Boilers
b. Waste water treatment
c. Hydrogen production
d. Sulfur recovery plant
e. Cooling towers f
. Blowdown system
g. Compressor engines
Figure 5. Schematic Overview of Refinery Process
Separation Process
The first phase in petroleum refining operations is the separation of crude oil into its
major constituents using 3 petroleum separation processes: atmospheric distillation, vacuum
distillation, and light ends recovery (gas processing). Crude oil consists of a mixture of
hydrocarbon compounds including paraffinic, naphthenic, and aromatic hydrocarbons with
small amounts of impurities including sulfur, nitrogen, oxygen, and metals. Refinery
separation processes separate these crude oil constituents into common boiling-point
fractions.
● Crude distillation unit
The unit comprising of an atmospheric distillation column, side strippers,
heat exchanger network, feed de-salter and furnace as main process technologies
enables the separation of the crude into its various products. Usually, five
products are generated from the CDU namely gas + naphtha, kerosene, light gas
oil, heavy gas oil and atmospheric residue.
In some refinery configurations, terminologies such as gasoline, jet fuel
and diesel are used to represent the CDU products which are usually fractions
emanating as portions of naphtha, kerosene and gas oil.
Operating Conditions : The temperature at the entrance of the furnace where
the crude enters is 200 – 280oC. It is then further heated to about 330 – 370oC
inside the furnace. The pressure maintained is about 1 barg.
Figure 6. Crude Distillation unit
● Vacuum distillation unit (VDU)
The atmospheric residue when processed at lower pressures does not allow
decomposition of the atmospheric residue and therefore yields LVGO, HVGO and
vacuum residue. The LVGO and HVGO are eventually subjected to cracking to yield
even lighter products. The VDU consists of a main vacuum distillation column
supported with side strippers to produce the desired products. Therefore, VDU is also
a physical process to obtain the desired products.
Figure 7. Vacuum Distillation unit
Conversion Processes
To meet the demands for high-octane gasoline, jet fuel, and diesel fuel, components
such as residual oils, fuel oils, and light ends are converted to gasolines and other light
fractions. Cracking, coking, and visbreaking processes are used to break large petroleum
molecules into smaller ones. Polymerization and alkylation processes are used to combine
small petroleum molecules into larger ones. Isomerization and reforming processes are
applied to rearrange the structure of petroleum molecules to produce higher-value
molecules of a similar molecular size.
● Thermal Cracking
Thermal cracker involves a chemical cracking process followed by the
separation using physical principles (boiling point differences) to yield the
desired products. Thermal cracking yields naphtha + gas, gasoil and thermal
cracked residue.
Figure 8.1 Thermal Cracking Process
● Catalytic Cracking
This process is basically the same as thermal cracking but differs by the use of
a catalyst, which is not (in theory) consumed in the process, and directs the course of
the cracking reactions to produce more of the desired higher-octane hydrocarbon
products. Catalytic cracking has a number of advantages over thermal cracking: (1)
the gasoline produced has a higher octane number; (2) the catalytically cracked
gasoline consists largely of iso-paraffins and aromatics, which have high octane
numbers and greater chemical stability than monoolefins and diolefins that are
present in much greater quantities in thermally cracked gasoline. the cycle of
operations consists of (1) flow of feedstock through the catalyst bed, (2)
discontinuance of feedstock flow and removal of coke from the catalyst by burning,
and (3) insertion of the reactor onstream.
Figure 8.2. Catalytic Cracking Process
● Hydrocracking
Hydrocracking is similar to catalytic cracking, with hydrogenation
superimposed and with the reactions taking place either simultaneously or
sequentially. Hydrocracking was initially used to upgrade low-value distillate
feedstocks, such as cycle oils (high aromatic products from a catalytic cracker that
usually are not recycled to extinction for economic reasons), thermal and coker gas
oils, and heavy-cracked and straight-run naphtha. These feedstocks are difficult to
process by either catalytic cracking or reforming, since they are characterized usually
by a high polycyclic aromatic content and/or by high concentrations of the two
principal catalyst poisons—sulfur and nitrogen compounds. Hydrocracking is an
extremely versatile process that can be utilized in many different ways such as
conversion of the high-boiling aromatic streams that are produced by catalytic
cracking or by coking process.
Figure 8.2. Hydrocracking Process
● Reformer
Heavy naphtha which does not have high octane number is subjected to
reforming in the reformer unit to obtain reformate product (with high octane
number), light ends and reformer gas (hydrogen). Thereby, the unit produces high
octane number product that is essential to produce premium grade gasoline as one
of the major refinery products. A reformer is regarded as a combination of chemical
and physical processes. Thermal reforming was a natural development from older thermal
cracking processes; cracking converts heavier oils into gasoline whereas reforming
converts (reforms) gasoline into higher-octane gasoline. The equipment for thermal
reforming is essentially the same as for thermal cracking, but higher temperatures are
used.
Figure 9. Reforming Process
✔ Thermal Reforming In carrying out thermal reforming, a feedstock such

as 205°C (400°F) end-point naphtha or a straight-run gasoline is heated to
510°C–595°C (950°F–1100°F) in a furnace, much the same as a cracking
furnace, with pressures from 400 to 1000 psi. The products of thermal
reforming are gases, gasoline, and residual oil or tar, the latter being
formed in very small amounts (approximately 1%). The amount and
quality of the gasoline, known as reformate, are very dependent on the
temperature. A general rule is the higher the reforming temperature, the
higher the octane number, but the lower the yield of reformate.
✔ Catalytic Reforming Like thermal reforming, catalytic reforming
converts low-octane gasoline into high-octane gasoline (reformate). When
thermal reforming could produce reformate with research octane numbers
of 65–80 depending on the yield, catalytic reforming produces reformate
with octane numbers on the order of 90–95. Catalytic reforming is
conducted in the presence of hydrogen over hydrogenation–
dehydrogenation catalysts, which may be supported on alumina or
silica–alumina.
Figure 9. Catalytic Reforming Process
✔ Catalysts The composition of a reforming catalyst is dictated by the

composition of the feedstock and the desired reformate. The catalysts used
are principally molybdena–alumina, chromia–alumina, or platinum on a
silica–alumina or alumina base. Pretreatment processes (e.g.,
hydrodesulfurization) may permit platinum catalysts to be employed.
● Isomerization
The isomerization process upgrades the octane number of light naphtha fractions
and also simultaneously reduces benzene content. Isomerization complements catalytic
reforming process by upgrading the octane number of refinery naphtha streams .
Isomerization is a simple and cost-effective process for octane enhancement compared
with other octane-improving processes . Isomerate product contains very low sulfur and
benzene.
✔ Catalysts – metal catalyst- high-temperature processes; aluminum
chloride plus hydrogen chloride- low-temperature processes.
Figure 10. Isomerization

● Alkylation
Alkylation is used to produce a high octane gasoline blending stock from the
isobutane formed primarily during catalytic cracking and coking operations, but also
from catalytic reforming, crude distillation and natural gas processing. Alkylation
joins an olefin and an isoparaffin compound using either a sulfuric acid or
hydrofluoric acid catalyst. The products are alkylates including propane and butane
liquids.
Figure 11. Alkylation Process
✔ Catalysts Sulfuric acid, hydrogen fluoride, and aluminum chloride are the
general catalysts used commercially
● Polymerization
Polymerization is occasionally used to convert propene and butene to high octane
gasoline blending components. The process is similar to alkylation in its feed and
products, but is often used as a less expensive alternative to alkylation. The reactions
typically take place under high pressure in the presence of a phosphoric acid
catalyst. The feed must be free of sulfur, which poisons the catalyst; basic materials,
which neutralize the catalyst; and oxygen, which affects the reactions.
Figure 12. Polymerization Process
✔ Catalyst- Phosphates, liquid phosphoric acid, phosphoric acid on
kieselguhr, copper pyrophosphate pellets, and phosphoric acid film on
quartz
● Visbreaking
In Visbreaking (viscosity breaking), a mild thermal cracking is carried out.
Visbreaking produces Naphtha, Gasoil and a residue. The residue has lower viscosity
and pour point and hence can easily meet the requirements of the fuel oil
specifications in the fuel oil blending pool. Visbreaking basically breaks the long
paraffinic side chains attached to aromatic structures. Due to this the residue pour
point and viscosities are considerably reduced.
Figure 13. Visbreaking Process

● Coking
Coking is a cracking process used primarily to reduce refinery production of
low-value residual fuel oils to transportation fuels, such as gasoline and diesel. As part
of the upgrading process, coking also produces petroleum coke, which is essentially
solid carbon with varying amounts of impurities, and is used as a fuel for power
plants if the sulfur content is low enough.
✔ Delayed Coking- Delayed coking is a semicontinuous process (Figure
4.6) in which the heated charge is transferred to large soaking (or coking)
drums, which provide the long residence time needed to allow the
cracking reactions to proceed to completion. The feed to these units is
normally an atmospheric residuum, although cracked residua are also
used.
Figure 14. Delayed Coking Unit
✔ Fluid Coking Fluid coking is a continuous process that uses the

fluidized-solid technique to convert atmospheric and vacuum residua to
more valuable products. The residuum is coked by being sprayed into a
fluidized bed of hot, fine coke particles, which permits the coking
reactions to be conducted at higher temperatures and shorter contact times
than can be employed in delayed coking. Moreover, these conditions result
in decreased yields of coke; greater quantities of more valuable liquid
product are recovered in the fluid coking process.
Figure 15. Fluid Coker
Treating Processes
Petroleum treating processes stabilize and upgrade petroleum products by separating
them from less desirable products and by removing objectionable elements. Undesirable
elements such as sulfur, nitrogen, and oxygen are removed by hydrodesulfurization,
hydrotreating, chemical sweetening, and acid gas removal. Treating processes, employed
primarily for the separation of petroleum products, include such processes as deasphalting.
Desalting is used to remove salt, minerals, grit, and water from crude oil feedstocks before
refining. Asphalt blowing is used for polymerizing and stabilizing asphalt to improve its
weathering characteristics.
● Hydrodesulfurization
Desulfurization is the removal of sulfur or sulfur compounds from crude oil and crude oil
products from crude oil and crude oil products. Hydrocarbon feedstock and hydrogen are passed
through a catalyst bed at elevated temperatures and pressures. Some of the sulfur atoms attached
to hydrocarbon molecules react with hydrogen on the surface of the catalyst to form hydrogen
sulfide (H2S).
Figure 16. Fluid Coker
● Hydrotreating
Hydrotreating and hydroprocessing are similar processes used to remove
impurities such as sulfur, nitrogen, oxygen, halides and trace metal impurities that may
deactivate process catalysts. Hydrotreating also upgrades the quality of fractions by
converting olefins and diolefins to paraffins for the purpose of reducing gum formation
in fuels. Hydroprocessing, which typically uses residuals from the crude distillation
units, also cracks these heavier molecules to lighter more saleable products. Both
hydrotreating and hydroprocessing units are usually placed upstream of those processes in
which sulfur and nitrogen could have adverse effects on the catalyst, such as catalytic
reforming and hydrocracking units.
Figure 17. Simplified Hydrotreating Process Flow Diagram

● Chemical Sweetening
In petroleum refining, chemical treating is used to remove or change the
undesirable properties associated with sulfur, nitrogen, or oxygen compound
contaminates in petroleum products. Chemical treating is accomplished by either
extraction or oxidation (also known as sweetening), depending upon the product.
Extraction is used to remove sulfur from the very light petroleum fractions, such
as propane/propylene (PP) and butane/butylene (BB). Sweetening, though, is more
effective on gasoline and middle distillate products. Oxidation or "sweetening" is
used on gasoline and distillate fractions.
✔ Merox Extraction- Merox extraction is used to remove mercaptans
(organic sulfur compounds) from PP and BB streams. PP streams
may undergo amine treating before the Merox extraction to remove
excess H2S which tends to fractionate with PP and interferes with
the Merox process. A caustic prewash of the PP and BB removes any
remaining trace H2S prior to Merox extraction.
● Acid Gas Removal
Feedstock And Product Handling -

The refinery feedstock and product handling operations consist of unloading, storage,
blending, and loading activities.
Auxiliary Facilities -
A wide assortment of processes and equipment not directly involved in the refining of
crude oil is used in functions vital to the operation of the refinery. Examples are boilers, waste
water treatment facilities, hydrogen plants, cooling towers, and sulfur recovery units. Products
from auxiliary facilities (clean water, steam, and process heat) are required by most process
units throughout the refinery.
INTRODUCTION TO OIL & GAS INDUSTRY
AND SUSTAINABLE DEVELOPMENT
Engr. Levi D. Mercado
CHAPTER IV
Oil & Gas

Upstream Segment
Learning Objectives
By the end of this chapter, students should be able to:
Discuss the oil

and gas exploration Determine the different
phase. types of well.
Illustrate the basic parts

of rotary drilling rig and
Identify the different their types and
exploration and drilling functions.
techniques.
HOW
TO FIND
LIQUID MONEY?
Prospecting
Gaining Access Phase
Prospecting is the very first stage in the search for oil and gas fields. Activities tend to
cover large areas in an attempt to see if petroleum accumulations might be present.
This involves evaluating the technical, political, economic, social and environmental
aspects of regions under consideration.
Technical aspects will include the potential size of hydrocarbons to be found and
produced in the region, which will involve scouting studies using publicly available
information or commissioning regional reviews, and a consideration of the technical
challenges facing exploration and production, for example in very deep offshore
waters.
Political and economic considerations include political regime and Government

stability, the potential for nationalization of the oil and gas industry, current
embargoes, fiscal stability and levels of taxation, constraints on repatriation of
profits, personnel security, local costs, inflation and exchange rate forecasts.
Social considerations will include any threat of civil disorder, the

availability of local skilled workforce and local training required, the degree of effort which will
be required to set up a local presence and positively engage the indigenous people.
This also consider the precautions needed to protect the environment from
harm during operations, and any specific local legislation.
OIL & GAS PROSPECTING
The Prospecting Process
The process of prospecting for oil and gas can take many paths before a
well is ready to be drilled. The broad order of researching and lease activities can be
described as follows:
1. Geological Idea
2. Preliminary Research
3. Expanded Prospect Development & Approval
4. Acquire Leases
5. Permit, Finance and Drill the Well
1. Geological Idea
• Every prospect starts with a geological idea.

• Most generating geologists have knowledge of a specific oil and gas basin or
geographic region.
• Each takes his knowledge of the area's geological structures, faults,
producing wells, dry holes, and other data to generate ideas on where to look
for drilling opportunities.
• Five key elements of a petroleum system must be present for an oil and gas
prospect to be successful and, if any one of them fails, neither oil nor gas will
be found when the well is drilled:
• Source Rock
When a source rock is subjected to high pressure and
temperature deep within the earth over an extended period of
time, hydrocarbons form.
The main types of sedimentary source rocks are:

• Shales - Layers of clay minerals.
• Sandstones - Particles of sand (mostly quartz grains) pressed
together by the weight of sediments deposited above.
• Carbonates - Fossilized skeletons and crystals of calcium carbonate.
Limestone is a common carbonate.
• Evaporates (Salts) - Salts left behind as a result of evaporating
seawater.
Whatever the rock type, source rocks that ultimately generate commercial hydrocarbons
have two key characteristics:
Porosity - Hydrocarbons are created in the tiny pore spaces of the rock. If the
source rock does not have adequate porosity, hydrocarbons would not have
been created.
Permeability - A measure of the level of connectivity between the source rock's

pore spaces. Without adequate permeability, the hydrocarbons created within
the pore spaces of the source rock cannot migrate from the source rock to a
reservoir.
Migration - Hydrocarbons are expelled from the source rock. Hydrocarbons are less
dense than their precursor organic sediment, so they migrate upwards over time to the
earth's surface unless they are trapped.
Trap - As the hydrocarbons migrate away from the source rock they must find a structure,
or trap that has the right conditions to stop the oil and gas from reaching the surface.
There are two types of traps capable of capturing hydrocarbons preventing further
migration:
• Structural Traps - De-formed rock layers primarily the result of folding and/or faulting, or both.
Anticlines and salt domes are common examples of structural traps.
• Stratigraphic Traps - Formed when other rock beds seal a reservoir bed.
Reservoir - Oil and gas is trapped in the porous spaces of a reservoir rock; usually
sandstone or limestone. As is the case with source rock, the reservoir rock must also be
permeable so that the hydrocarbons can flow to the surface during production.
Seal Rock - An impermeable rock that prevents the hydrocarbons from escaping to the
surface.
Every generating geologist is familiar with these elements and their various
attributes within their basin / region. Prospect ideas come from combining regional
geology with new knowledge that comes from logged successful wells and dry holes
drilled in the region and technical data that the geologist may have.
2. Preliminary Research
• Preliminary prospect research involves an investment of primarily time to make

a determination whether or not a prospect is worth pursuing.
• Developing a prospect for potential sale can involve risking a material amount
of capital.
• Generation companies do not want to invest capital to completely develop a

prospect unless they believe further development will reasonably result in
drilling and completing a successful well.
Preliminary research might include:
• Preliminary lease checks. If the idea is on acreage under lease or held by production,
there is no need to proceed further.
• Researching and mapping logged wells (productive and dry holes) in the prospect
area.
• Reviewing seismic the generation company may have in its library.
• QC publicly available seismic.
• Compare notes with other geologists with experience in the prospect area.
3. Expanded Prospect Development
Completing a developed prospect usually involves utilizing multiple confirming geological,

geophysical or geochemical technologies:
Seismic Surveys - Seismic surveying is based on the simple concept that sound waves will
travel through different geological structures at different speeds that can be measured by time.
In conducting a seismic survey, a shock or sound wave is created using a thumper truck or even
explosives drilled into the ground.
• The sound waves travel under the

ground and are reflected back by the
various rock layers.
• These reflections travel at different

speeds depending upon the type or
rock and the density of the rock
layers they pass through.
• The seismic receiving truck reads

and records these sound waves as
they are detected by listening
devices called geophones.
4. Acquiring Leases
• As an oil and gas prospect is being defined geologically, a landman works to stake
out, in detail the land area whose mineral rights are necessary to drill the prospect.
Preliminary lease checks are completed early in the process. These checks ensure
that the necessary land is available for lease.
• Lease negotiations will begin in earnest once the prospect generator has approved
the project from a geological perspective.
• Mineral rights leases can contain a myriad of terms. They will vary depending on
geographical location and, like all binding contracts, will vary based on the land, land
(surface rights) owner, and mineral owner circumstances as well as the local leasing
"market". In "hot" areas, terms and compensation are more in the landowners favor.
After the leases have been secured, the prospect is nearly ready to be
drilled. The royalty owner owns the rights to the minerals in place under the ground.
It can be, but is not always, the landowner.
EXPLORATION
Upstream | Exploration Phase
• The goal of petroleum exploration is to identify areas with the right geologic
conditions for a profitable accumulation of petroleum.
• The role of exploration is to provide the information required to exploit the best
opportunities presented in the choice of areas, and to manage research
operations on the acquired blocks.
• An oil company may work for several years on a prospective area before an
exploration well is spudded and during this period the geological history of the
area is studied and the likelihood of hydrocarbons being present quantified.
EXPLORATION
• Exploration is responsible for handling the risk intrinsic in this activity, and this is generally
achieved by selection of a range of options in probabilistic and economic terms.
EXPLORATION
• When it’s been decided to start up with an exploration project in a basin or in a
larger area containing several basins, the quantity and quality of available data
must be acquired and evaluated – geological data, type of reserves, production
of existing fields (if any), etc.
• Basin assessment/evaluation is the first step to undertake the study of the area
under interest.
• Technological development has provided oil companies with Basin Modeling –

which is a numerical simulations that allows the temporal reconstruction of the
history of a sedimentary basin and the associated evolution of the processes
related to the formation of petroleum accumulations.
EXPLORATION
EXPLORATION
• Once an area has been selected for exploration, the usual sequence of technical activities
starts with the definition of a basin. The mapping of gravity anomalies and magnetic anomalies
will be the first two methods applied. In many cases this data will be available in the public
domain or can be bought as a ‘non exclusive’ survey.
• A coarse two-dimensional (2D) seismic grid, covering a wide area, will be acquired in order
to define leads, areas which show for instance a structure which potentially contains an
accumulation.
EXPLORATION
• Recently electro-magnetic techniques have also

been deployed at this stage to assist in the
delineation of basins and the identification of
potential hydrocarbon accumulations.
• Since at this point very few hard facts are available

to judge the merit of these ideas they are often
referred to as ‘play’.
• More detailed investigations will be integrated to

define a ‘prospect’, a subsurface structure with a
reasonable probability of containing all the elements
of a petroleum accumulation, namely source rock,
maturation, migration, reservoir rock and trap.
EXPLORATION
• The exploration geologist and geophysicist (amongst others) generate locations for
future exploration prospects.
• Once exploration prospects are generated, drilling engineers work with the exploration
geologists to develop the drilling proposal(s) for any Exploration Wells.
• Exploration wells are wells which are drilled with an objective of proving or disproving
the presence of commercial hydrocarbon accumulations.
• A popular slang term for the first Exploration Well drilled in a geologic basin or region
is a “Wildcat Well”.
EXPLORATION
Goal of exploration is to identify and locate a prospect, to quantify the volume of
hydrocarbon which might be contained in the potential reservoirs and to evaluate the risk inherent
the project itself.
A prospect is a viable target evidenced by geological and geophysical indications

that is recommended for drilling an exploration well.
EXPLORATION
• The prospects identified must be technically practicable and meet the market conditions to guarantee
a financial return on investments.
• The results obtained by drilling the exploratory wells indicate whether the initial geological
hypotheses are correct or whether variations are found.
• All this will allow the fine-tuning of the economic analysis of the project possibly turning hypothetical
reserves into proved ones.
• Where profitability does not meet the standards of the company, it leads to the termination of further
investments.
EXPLORATION
Petroleum Exploration Techniques
Geological Mapping and Prospecting
• Geological mapping and prospecting are valuable techniques in an petroleum

exploration.
• Geological mapping It is basically a technique which allows a graphical presentation of

geological observations and interpretations.
• Geological prospecting make use of geological disciplines such as petrography,

stratigraphy, sedimentology, structural geology, geochemistry.
• Such disciplines are used to achieve different targets but it must be stressed that their
integration is fundamental to depict a picture of reality.
EXPLORATION
Geophysical Methods
Geophysical methods allow to

study the physical properties of the
subsurface rocks and they can be used in
different phases of the exploration in order to
collect different types of information.
Geophysical methods such as:

• gravimetric,
• magnetometric,
• magnetotelluric,
• seismic
are often combined to obtain
more accurate and reliable results.
EXPLORATION
Gravimetric Prospecting
Gravimetric prospecting is a
geophysical technique which is able to
identify anomalies in the gravity
acceleration generated by contrasts in
density among bodies in the subsurface.
Gravimetric prospecting is
used to reconstruct of the main structural
elements of sedimentary basins such as:
extension, thickness, salt domes, intrusive
plutons and dislocations or fault lines.
EXPLORATION
Magnetometric Prospecting
This method involves measuring

local anomalies in the Earth’s magnetic
fields.
The method enable acquisition of

data on structural characteristics and depth of
the susceptive basement and therefore,
indirectly, on the thickness of sedimentary
overburden and identifies the presence, depth
and extension of volcanic or plutonic masses
within the sedimentary sequences.
EXPLORATION
Seismic Prospecting
• Seismic prospecting has become the most valuable technique to reduce exploration risk of being
unsuccessful in locating a prospect.
• The technique is based on determinations of the time interval that elapses between the initiation of a
seismic wave at a selected shop point and the arrival of reflected or refracted impulses at one or more
seismic detectors.
EXPLORATION
• The phase of seismic data acquisition is followed by the seismic data processing phase (aimed to
the alteration of seismic data to suppress noise, enhance signal and migrate seismic events to
the appropriate location in space) than by the interpretation of the generated subsurface image.
Onshore seismic survey Marine seismic survey

EXPLORATION
Geophysicists interpret the processed seismic data and integrate other geoscientific
information to make assessments of where oil and gas reservoirs may be accumulated.
A 2D interpreted seismic section

VIDEO
EXPLORATION
• Powered by advanced supercomputer power, rapid data loading, high-speed networking and
high-resolution graphics, visualization centers provide the ability to display and manipulate complex
volumes of 3D data resulting in better interpretation of more data in less time.
DRILLING
• An initial successful exploration well will establish the presence of a working
petroleum system. In the following months, the data gathered in the first well will be
evaluated and the results documented. The next step will be the appraisal of the
accumulation requiring more wells.
• If the project is subsequently moved forward, development wells will have to be

engineered.
• The next sections will focus on these drilling activities, and will also investigate the
interactions between the drilling team and the other E&P functions.
DRILLING
Well Planning
• Well planning is perhaps the most demanding aspect of drilling engineering. It requires the
integration of engineering principles, corporate or personal philosophies, and experience
factors.
• Although well planning methods and practices may vary within the drilling industry, the end
result should be a safely drilled, minimum-cost hole that satisfies the reservoir engineer's
requirements for oil and gas production.
DRILLING
The skilled well planners normally have three common traits.
• They are experienced drilling personnel who understand how all aspects of the drilling
operation must be integrated smoothly.
• They utilize available engineering tools, such as computers and third-party

recommendations, to guide the development of the well plan.
• And they usually have a "Sherlock Holmes" characteristic that drives them to research and
review every aspect of the plan in an effort to isolate and remove potential problem areas.
DRILLING
The objective of well planning is to formulate a program from many variables for
drilling a well that has the following characteristics:
• safe
• minimum cost
• usable
Unfortunately, it is not always possible to accomplish these objectives

on each well due to constraints based on items such as geology and drilling
equipment, i.e., temperature, casing limitations, hole sizing, or budget.
DRILLING
Types of Well
Well can be classified according to the types of fluid produced, its location and its purpose.
These are the types of wells based on its purpose:
• Wildcat wells are drilled where little or no

known geological information is available.
The site may have been selected because
of wells drilled some distance from the
proposed location but on a terrain that
appeared similar to the proposed site.
Individuals who drill wildcat wells are
known as 'wildcatters'.
DRILLING
• Exploration wells are drilled purely for

exploratory (information gathering)
purposes in a new area, the site selection
is usually based on seismic data, satellite
surveys etc. Details gathered in this well
includes the presence of hydrocarbon in the
drilled location, the amount of fluid present
and the depth at which oil or/and gas
occurs
DRILLING
• Appraisal wells are used to assess characteristics (such as flow rate, reserve quantity) of a
proven hydrocarbon accumulation. The purpose of this well is to reduce uncertainty about the
characteristics and properties of the hydrocarbon present in the field.
DRILLING
• Production wells are drilled primarily for producing oil or gas, once the producing structure
and characteristics are determined.
DRILLING
• Development wells are wells drilled for the production of oil or gas already proven by
appraisal drilling to be suitable for exploitation.
DRILLING
Abandoned wells are wells permanently plugged in the drilling phase for technical reasons.
• When a company no longer needs a well to support its oil and gas
development, the well must be permanently sealed and taken out of service. This
part of the closure process is known as abandonment.
DRILLING
Drilling the Exploration Well
• Once geological and geophysical information have defined and evaluated (technically and
economically) the drillable prospect, it is possible to move to a fundamental phase of the
exploration project – the drilling of the first exploratory well.
• The drilling of the exploration well is aimed to confirm the presence of the petroleum accumulation.
DRILLING
Well Logging
• The well logging technique consists of lowering a ‘logging tool’ into the well to acquire
geological data and to reveal reservoir fluids characteristics.
• Well logging help geoscientists and engineers to understand:
• Presence of reservoir
• Presence of hydrocarbons and characteristics
• Reservoir properties, etc..
DRILLING
• Well, logging is also called borehole logging. It

is the practice of creating a detailed record of
geological formation. The log can be based on
either visual inspection of samples brought to
the surface or by instruments lowered into the
hole.
• As a well is drilled, core samples, drilling fluid,

well logs, and test results are carefully analyzed
in order to understand as much as possible
about the environment surrounding the
wellbore.
DRILLING
• Well logs are the primary means of

determining formation depth and what
type is it, and many other critical
information.
• A log is a record of information about the

geological formations that have been
drilled through, it is also referred to as
borehole logging.
DRILLING
What does well logs show?
Well logs show everything about a borehole. They examine and record data relating to:
• Rock Composition:
The type of elements and minerals
present. Common strata types include limestone,
sandstone and shale. A log determines what rocks
line the borehole.
• Rock Characteristics:
For instance, the presence of liquid.
Fluids in rock fall under the categories of
permeability and porosity.
DRILLING
What does well logs show?
• Rock integrity:
The strength of rocks regarding fracturing.
Analysis of structural liabilities and risk of cave-ins.
• Liquid Presence:
Type of fluids in the borehole. Their
salinity, pressure and saturation.
• Borehole Factors:
Shape, size, angulations and trajectory of
the borehole. How the engineering aspects relate to
the previous factors, whether any problem will arise.
• Hydrocarbon Presence:
In addition to valuable minerals,
hydrocarbons such as oil and gas represent another
thing logs display.
DRILLING
Data Interpretation
DRILLING
• Mud logging
Mud Log refers to the drilling fluid or mud, used to provide buoyancy to the drill, as well as
remove cuttings from the well. Information from mud log supplements logs of nearby wells to determine
the commercial ability of a well.
Additionally, mud log monitors the wellbore by analyzing the cuttings from drilling fluid that
circulated to the surface, this also helps prevent blowouts when drilling bit contacts with potential high
pressure zone.
• Measurement while drilling (MWD)

Most MWD systems were based on mud telemetry, where pressure variations in the mud
pulse created by the MWD tools were sensed by a computer on surface.
MWD systems are usually used in directional drilling, since it can provide information on
inclination and trajectory of the wellbore in real time.
DRILLING
Coring
• Coring provides the only means of obtaining high quality samples for the direct
measurement of rock and reservoir properties.
• Core samples are then used to perform Routine Core Analysis and/or Special Core
Analysis to obtain detailed petrophysical data.
DRILLING
Core Samples
DRILLING
Well testing
• A well test is the measurement under controlled

conditions of all factors relating to the
production of oil, gas, and water from a well.
• Well tests are conducted to acquire dynamic

rate, pressure, temperature, and fluid property
data.
• The acquired information is used to determine

reservoir capabilities and important decisions
such as production methods, well production
equipment, and field development drilling are
made from the interpretation of well test results.
DRILLING
Upstream | Field Appraisal Phase
• During appraisal, more wells are drilled to collect information and samples from the reservoir
and other seismic survey might also be acquired in order to better delineate the reservoir.
This phase of the E& P process aims to:
• reduce the range of uncertainty in the volumes of hydrocarbons

in place
• define the size and configuration of the reservoir
• collect data for the prediction of the performance of the
reservoir during the forecasted production life
DRILLING
Upstream | Field Development Phase
• The development stage takes place after successfully completing the appraisal period and
before the beginning of the field production.
• Field Development Plans (FDPs) provide the necessary support for field optimization, and
include all activities and processes required to optimally develop a field.
Once the field development plan is approved and before the

beginning of production, some actions follow:
• Detailed design of the facilities
• Procurement of the materials of construction
• Fabrication of the facilities
• Installation of the facilities
• Commissioning of all plant and equipment
An example of an offshore field development scheme – (Gazprom)

DRILLING
Upstream | Petroleum Production Phase
• The production phase begins with the first commercial volumes of hydrocarbons (“first
oil”) flowing through the wellhead – this establishes a fundamental turning point from
a cash flow stand point.
• From now on, cash is generated and can be used to pay back the previous
investments, or may be made available for new projects (ex. new exploration…).
DRILLING
A typical production profile is made up by three phases:
• Build-up period
During this period production wells are progressively brought on flow
• Plateau period
A constant production rate is mantained
• Decline period
All producers show declining of production rates
Typical field production profile

DRILLING
Typical Crude Oil Processing

DRILLING
Upstream | Well Abandonment Phase
The end of the life of the ﬁeld occurs when it is no longer economic for the
operator to continue production, and consequently the wells will be plugged and abandoned.
Well plug & abandonment (P&A)
The objective of all P&A operations is to achieve the following:
• isolate and protect all fresh and near fresh water zones
• isolate and protect all future commercial zones
• prevent leaks in perpetuity from or into the well
• remove surface equipment and cut pipe to a mandated level
below the surface
DRILLING
• A traditional abandonment process begins with a well

killing operation in which produced fluids are circulated
out of the well, or bull headed into the formation, and
replaced by drilling fluids heavy enough to contain any
open formation pressures.
• Xmas tree is removed and replaced by a blowout

preventer, through which the production tubing can be
removed.
• Cement is then pumped and placed across the open

perforations and squeezed into the formation to seal off
all productive layers.
DRILLING
• Depending on the well configuration, a series of

cement and wireline plugs in both the liner and
production casing will be set to a depth level with the
top of cement behind the production casing.
• The production casing is cut and removed above the

top of cement, and a cement plug positioned over the
casing stub to isolate the annulus and any formation
which may still be open below the intermediate casing
shoe.
The type of rig which will be selected depends upon a number of parameters, in particular:
1. cost and availability
2. water depth of location (offshore)
3. mobility/transportability (onshore)
4. depth of target zone and expected formation pressures
5. prevailing weather/metocean conditions in the area of operation
6. experience of the drilling crew (in particular the safety record!)

The following types of rig can be contracted for offshore drilling:
Swamp barges
Operate in very shallow water (less
than 20ft). They can be towed onto location and
are then ballasted so that they ‘sit on bottom’.
The drilling unit is mounted onto the barge. This
type of unit is used in the swamp areas of, for
example Nigeria, Venezuela and US Gulf
Coast.
Drilling jackets
Are small steel platform structures
which are used in areas of shallow and calm
water. A number of wells may be drilled from
one jacket. If a jacket is too small to
accommodate a drilling operation, a jack-up
rig is usually cantilevered over the jacket and
the operation carried out from there.
Jack-up rigs
Are either towed to the drilling location (or
alongside a jacket) or are equipped with a propulsion
system. The three or four legs of the rig are lowered
onto the seabed. After some penetration the rig will lift
itself to a determined operating height above the sea
level.
If soft sediment is suspected at seabed,
large mud mats will be placed on the seabed to allow a
better distribution of weight. All drilling and supporting
equipment are integrated into the overall structure.
Jack-up rigs are operational in water depths up to about
450ft and as shallow as 15ft. Globally, they are the
most common rig type, used for a wide range of
environments and all types of wells.
Semi-submersibles
Are used for exploration and appraisal in
water depths too great for a jack-up. A semi-
submersible rig is a movable offshore vessel
consisting of a large deck area built on columns of
steel. Attached to these heavy duty columns are at
least two barge-shaped hulls called pontoons. Before
operation commences on a specified location, these
pontoons are partially filled with water and submersed
in approximately 50ft of water to give stability.
A large-diameter steel pipe (riser) is
connected to the seabed and serves as a conduit for
the drill string. The blowout preventer (BOP) is also
located at the seabed (subsea stack). Heavy-duty
semi submersibles, for example Deepwater Horizon
(rated 15,000psi), can handle high reservoir pressures
and operate in the most severe metocean conditions
in water depths down to 3000m.
Drill ships
Are used for deep and very deep
water work. They can be less stable in rough
seas than semi-submersibles. However,
modern high-specification drill ships such as
Discoverer Enterprise can remain stable, and
on target during 100knot winds using powerful
thrusters controlled by a DP system.
The thrusters counter the forces of
currents, wind and waves to keep the vessel
exactly on target, averaging less than 2m off
her mark, without an anchor. Heavy-duty drill
ships are capable of operating in water depths
up to 3000m
• In some cases, oil and gas fields are developed from a number of platforms. Some
platforms will accommodate production and processing facilities as well as living
quarters.
• Alternatively, these functions may be performed on separate platforms, typically in

shallow and calm water. On all offshore structures, however, the installation of additional
weight or space is costly.
• Drilling is only carried out during short periods of time if compared to the overall field life
span and it is desirable to have a rig installed only when needed. This is the concept of
tender-assisted drilling operations.
VIDEO
Drilling Systems and Equipment
Whether onshore or offshore

drilling is carried out, the basic drilling system
employed in both the cases will be the rotary
rig.
The parts of such a unit and the three basic

functions carried out during rotary drilling
operations are as follows:
• The usual arrangement of drill string components and bit.
• The drill pipe section contains conventional drill pipe, and

heavy weight pipe. The drill pipe is attached with a square
or hexagonal pipe called kelly at the upper end of the drill
string.
• The BHA may contain the following items such as:

i) drill collars,
ii) stabilizers,
iii) jars,
iv) reamers,
v) shock subs, and
vi) bit sub.
In addition, the drill string may include shock absorbers, junk

baskets, drilling jars, reamers, and other equipment.
• There are some special tools in the BHA or drill

pipe, which may include monitor-while-drilling
(MWD) tools, and drill stem-testing tools.
• Finally there exists drill bit at the lower end of

the drill string.
• Heavy walled large-diameter drill collars furnish

bit load.
Drill bits
The drill bit is an important component in the drill string. The bit drills the rock in many
mechanisms. The drilling bit is selected according to the formation to be drilled.
There are two main types of drilling bits:

• Roller cone bits
• Fixed cutter bit.
Drill bits
Roller Cone Bit
They are also called tri-cone bits. The cutting structures

are mounted on three rolling cones and all these cones are
attached to main bit body.
There are two main types of tri-cone bits:
• Mill tooth bits
• Insert bits
Drill bits
Mill tooth bits
• These types of bits have steel

teeth which are milled on the
cones.
• The size and shape of teeth vary

according to the formation to be
drilled. In soft formation, the teeth
are long and slender, where in
hard formation the teeth are short
and broad
Drill bits
Insert bits
• In these types of bits, the teeth are not milled

into the cones, instead of that, tungsten
carbide inserts are pressed into the cones.
• These technics make the bits much harder

and can last longer when drilling through hard
formation.
• The size and shape of teeth also depend on

the formation to be drilled, the teeth can be
long and chisel shapes in soft formation, and
for hard formation can be short and round
shapes
Drill bits
Fixed Cutter Drilling Bits:
• Fixed cutter bit has no moving parts; the cutting

structures and bit body rotate as one part.
The main types of these bits are:
• PDC (polycrystalline diamond compact),

• TSP (thermally stable PDC) and diamond bits.
Drill bits
TSP Drilling Bits
• It was noticed that the bonding materials are the

weakest part of the cutter.
• Under the high temperature at the bottom while

drilling, the bonding materials lose their strength.
• The TSP bits are composed with same artificial

diamond without using the bonding materials
Drill bits
The PDC Drilling Bits
• This type of bits can be used for different

formations from soft to hard.
• The PDC bit has cutters which consist of a

layer of artificial diamond (polycrystalline
diamond).
• Using a high pressure high temperature

technique the polycrystalline diamond is
bonded on layer of cementer tungsten
carbide.
Drill bits
Diamond Drilling Bits:
• The natural diamond bits are used to drill through

very hard abrasive formation.
• This type of bits was developed from mining

industry.
• The main advantages of this type of bits are their

longevity, reduced number of run bits and tripping
time to get to the next casing point.
Drill bits
VIDEO
QUESTIONS?
THANK YOU!
REFERENCES
http://www.benergypartners.com/oil---gas-prospecting.html
https://www.nzpam.govt.nz/nz-industry/nz-petroleum/phases/prospecting/
https://nirn.fpg.unc.edu/module-4/topic-3-exploration
http://www.oil-gasportal.com/upstream/petroleum-exploration/
https://www.e-education.psu.edu/png301/node/700
https://www.nzpam.govt.nz/nz-industry/nz-petroleum/phases/prospecting/
https://en.wikipedia.org/wiki/Hydrocarbon_exploration
CHAPTER V
Oil & Gas

Midstream Segment
Midstream
Midstream
• refers to anything required to transport and store crude oil and natural gas before they
are refined and processed into fuel.
• Midstream also includes pipelines and all the infrastructure needed to move these
resources long distances, such as pumping stations, tank trucks, rail tank cars and
transcontinental tankers.
Midstream
The midstream sector has five main components in the movement of natural gas
from its production location to its ultimate use
Midstream:
• Gathering
• Processing
• Transportation
• Storage
Midstream
Gathering
• The natural gas gathering process begins receiving raw natural gas from wells
drilled into gas-bearing rock formations.
Midstream
Gathering
• Natural gas consists of hydrocarbons like methane, propane, butane,
pentane, plus many more.
Midstream
Gathering
• Before delivering the natural gas to gathering pipelines, well operators separate salt
water, crude oil, and oil condensates that accompany the natural gas.
Midstream
Gathering
• The natural gas is then transported through a gathering system best described as
a network of small-diameter, low-pressure pipelines.
Midstream
Gathering
• Gathering systems usually require

the operation of equipment called
“compressors” to increase the
pressure of the natural gas produced
at the wellhead locations to the
central locations where the raw
natural gas is treated and processed.
Midstream
Processing
• Raw natural gas brought from the earth to the wellhead is much different from the
natural gas consumers use every day.
• Almost all raw natural gas must be purified or “processed” in some way to meet
quality standards and regulations.
• is a range of industrial processes designed to

purify raw natural gas by removing impurities,
contaminants and higher molecular mass
hydrocarbons to produce what is known as
pipeline quality dry natural gas.
• Natural gas has to be processed in order to

prepare it for final use and ensure that elimination
of contaminants.
Midstream
Storing
• Natural gas received by natural gas transportation

pipelines after the gathering and processing stages
may not be needed right away, so it’s injected into
underground storage facilities for later use.
• Typically natural gas is stored during spring,

summer, and fall and withdrawn from long-term
storage when demand peaks in winter.
• The underground facilities include salt dome

caverns, bedded salt caverns, and depleted
reservoirs.
Midstream
Transporting
• In its unrefined state, crude oil is transported

by two primary modes: tankers, which travel
interregional water routes, and pipelines,
which most of the oil moves through for at
least part of the route.
• Once the oil has been extracted and separated

from natural gas, pipelines transport the
products to another carrier or directly to a
refinery. Petroleum products then travel from
the refinery to market by tanker, truck, railroad
car, or more pipelines.
Midstream
Marketing
• Companies operating in the midstream industry are often responsible for finding a home for the
natural gas and natural gas liquids (NGLs) that they have gathered and processed.
• This is where marketing comes in. A tremendous amount of detail is involved in marketing
natural gas and NGLs.
• To simplify, marketers find buyers for natural gas and natural gas liquids, such as resellers, other
marketers and distribution companies, or end-users.
Midstream
The Importance of Midstream
• The midstream sector is the backbone of our energy economy. It serves a vital role in the oil
and gas industry by helping transport and transform raw hydrocarbons produced by a well
into usable materials.
• Without the acts of gathering and processing, the delivery of natural gas to your home or
gasoline for your car wouldn’t be possible. Plus, you wouldn’t see familiar products like
rubber, plastics, or synthetics on the market without hydrocarbons.
THANK YOU!
Oil and Gas
Downstream Segment
Learning Objectives
By the end of this chapter, the students will be able to:
1. Discuss the importance of the downstream industry.

2. Identify the classification of processes in petroleum refining.
3. Identify the different refinery configurations.
4. Illustrate and explain the processes involved in petroleum refining.
5. Identify the different petroleum products.
✔ In the crude state, petroleum has minimal value, but when refined, it provides
high-value liquid fuels, solvents, lubricants, and many other products
✔ The fuels derived from petroleum contribute approximately one-third to one-half of
the total world energy supply and are used not only for transportation fuels (i.e.,
gasoline, diesel fuel, and aviation fuel, among others) but also to heat buildings.
✔ Petroleum products have a wide variety of uses that vary from gaseous and liquid fuels
to near-solid machinery lubricants.
Three Categories of Petroleum Products
In general, crude oil, once refined, yields three basic groupings of products that are produced when it is
broken down into cuts or fractions
Petroleum refining is the separation of petroleum into fractions
and the subsequent treating of these fractions to yield marketable products.
As the basic elements of crude oil, hydrogen and carbon form the main input
into a refinery, combining into thousands of individual constituents, and the
economic recovery of these constituents varies with the individual petroleum
according to its particular individual qualities and the processing facilities of a
particular refinery.
Distillation
● refers to the selective boiling and subsequent condensation of a component in
a liquid mixture.
● It is a separation technique that can be used to either increase the

concentration of a particular component in the mixture or to obtain (almost) pure
components from the mixture.
● The process of distillation exploits the difference in the boiling points of the
components in the liquid mixture by forcing one of them into a gaseous state.
● Naphtha, a precursor to gasoline and solvents, is produced from the
light and middle range of distillate cuts (sometimes referred to
collectively as light gas oil) and is also used as a feedstock for the
petrochemical industry.
• The middle distillates- products from
the middle boiling range of petroleum
and include kerosene, diesel fuel,
distillate fuel oil, and light gas oil. Waxy
distillate and lower-boiling lubricating
oils are sometimes included in the
middle distillates.
• The remainder of the crude oil includes
the higher-boiling lubricating oils, gas
oil, and residuum
Refinery Process
Categories
To convert crude oil into desired products in an economically feasible and environmentally acceptable manner, refinery
processes for crude oil are generally divided into three categories:
Separation Processes
Conversion Processes
Finishing Processes
Refinery
Configurations
Topping
Refinery
● Simplest refinery configuration
● Produce large quantities of unfinished oils
● Half of their output are residual fuel oils
Conversion
Refinery
● most versatile refinery configuration
● produce two-thirds of their output as gasoline
● also produces high-quality jet fuel, liquefied
petroleum gas (LPG), diesel fuel, and a small
quantity of petroleum coke
Dewatering
and Desalting
● first step in petroleum
processing
● the goal is to remove water
and the constituents of the
brine that accompany the
crude oil from the
reservoir to the wellhead
during recovery
operations.
● fluids from the well are
separated into crude oil,
natural gas, and water
phases using a gas–oil
separator
Categories of
general refinery
processes and
associated
operations
2. Petroleum 3.Petroleum
1. Separation conversion treating
processes processes processes
a. Atmospheric distillation a.Cracking (thermal and a. Hydrodesulfurization

b. Vacuum distillation catalytic) b. Hydrotreating
c. Light ends recovery b. Reforming
c. Chemical sweetening
c. Alkylation
d. Acid gas removal
d. Polymerization
e. Deasphalting
e. Isomerization
f. Coking
g. Visbreaking
4. Feedstock and 5. Auxiliary
product handling facilities
a. Boilers
a. Storage b. Waste water treatment
b. Blending c. Hydrogen production
c. Loading d. Sulfur recovery plant
d. Unloading e. Cooling towers
f. Blowdown system
g. Compressor engines
Separation
Process
Atmospheric distillation
● first and most fundamental step in the the
refining process
● primary purpose of the atmospheric distillation
tower is to separate crude oil into its
components
● Products from CDU:
gas + naphtha, kerosene, light gas oil,

heavy gas oil and atmospheric residue.
● heavy hydrocarbon residue left at the bottom

of the atmospheric distillation column is sent
to vacuum distillation column
Vacuum distillation
● at reduced operating pressures
● 50 to 100 mm of mercury absolute
● primary advantage is that it allows for distilling
heavier materials at lower temperatures
● Reduced pressures decrease the boiling point
of compounds
● Products from VDU:
LVGO, HVGO and vacuum residue

https://www.youtube.com/watch?v=PYMWUz7TC3A
Conversion
Process
Thermal Cracking
● involves a chemical cracking process
followed by the separation using physical
principles (boiling point differences)
● Products:
naphtha + gas, gasoil and thermal cracked

residue.
● https://www.youtube.com/watch?v=Xsqlv4rWn
Eg&t=108s
● https://www.youtube.com/watch?v=Ujtg5TbB
Az8
Catalytic Cracking
● breakdown of large compounds into small
hydrocarbons using an acid catalyst
● the operating of the processing unit is much
easier than that of thermal cracking due to
less temperature and pressure requirement
● Zeolite is used as catalyst
Catalytic Cracking
Hydrocraking
● heavier molecules react with hydrogen
to generate lighter hydrocarbons.
● Cycle oils and coker distillates are the
typical feedstocks
● High quality jet fuel and diesel production
is targeted
● Overall reaction is exothermic
● Cracking is promoted on silica-alumina
sites of the catalyst.
● Hydrogenation promoted by palladium,
molybdenum sulphide or tungsten
sulphide compounds
Reformer
● Heavy naphtha which does not have
high octane number is subjected to
reforming
● Product: reformate product (with high
octane number)
● a combination of chemical and physical
processes
● converts (reforms) gasoline into higher-
octane gasoline
● same as for thermal cracking, but higher
temperatures are used
● https://www.youtube.com/watch?v=FQ0ImB
6eozY
Types of Reforming
Process
https://www.youtube.com/watch?v=FQ0ImB6eozY
● end-point naphtha or a straight-
run gasoline is heated to 510°C–
595°C (950°F–1100°F) in a
Thermal furnace
● products of thermal reforming
Reforming are gases, gasoline, and residual
oil or tar
● higher the reforming
temperature, the higher the
octane number, but the lower
the yield of reformate
● converts low-octane gasoline
into high-octane gasoline
(reformate).
Catalytic ● catalytic reforming produces
reformate with octane numbers
Reforming on the order of 90–95.
● conducted in the presence of
hydrogen over hydrogenation–
dehydrogenation catalysts,
which may be supported on
alumina or silica–alumina.
● molybdena–alumina,
Catalyst ● chromia–alumina
● platinum on a silica–alumina or
alumina base
metal catalyst- high-temperature
Catalysts
processes; aluminum chloride plus
hydrogen chloride- low-temperature
processes.
Visbreaking (viscosity breaking)
● convert about 15 percent of the
feedstock to naphtha and diesel oils
and produce a lower-viscosity residual
fuel
● non-catalytic thermal process that
converts atmospheric or vacuum
residues
● Products: Naphtha, Gasoil and a
residue
Coking
● used primarily to reduce refinery
production of low-value residual fuel oils
to gasoline and diesel and coke.
● severe thermal cracking
● residue feed is heated to about 475 to 520
°C (890 to 970 °F) in a furnace with very low
residence time
Types of
Coking
Delayed
Coking
a semi-batch cyclic process that thermally
cracks a variety of residual oil feeds into
light gases, naphtha, diesel, heavy gas oil
and petroleum coke
Fluid
Coking
● continuous process that uses the
fluidized-solid technique
● greater quantities of more valuable
liquid product are recovered
Hydrodesulfurization
● catalytic chemical process (catalytic
hydrogenation) used to remove sulfur
compounds from refined petroleum
products with the sulfur compounds being
converted to hydrogen sulfide
● HDS feedstocks: naphtha, kerosene, diesel
oil and heavier oils
● hydrogen sulfide gas is then subsequently
converted into byproduct elemental sulfur
or sulfuric acid.
Hydrotreating
● carried out by charging the feed to the
reactor, together with hydrogen in the
presence of catalysts
● it is more economical to hydrotreat high-sulfur
feedstocks prior to
● catalytic cracking than to hydrotreat the
products from catalytic cracking. The
advantages are that
● (1) sulfur is removed from the catalytic
cracking feedstock, and corrosion is reduced
in the cracking unit;
● (2) carbon formation during cracking is
reduced so that higher conversions result; and
● (3) the cracking quality of the gas oil fraction is
improved
● tungsten–nickel sulfide
● cobalt–molybdenum
● alumina, nickel
Catalysts ● oxide–silica–alumina
● platinum–alumina.
● cobalt-modified molybdenum
disulfide together with smaller
Catalysts amounts of other metals.

● nickel and tungsten are also
used, depending on the nature
of the feed
Hydrotreating
● reaction of organic compounds in the
presence of high pressure hydrogen to
remove oxygen (deoxygenation) along with
other heteroatoms (nitrogen, sulfur, and
chlorine)
● removal of impurities such as sulfur and
nitrogen from distillate fuels—naphtha,
kerosene, and diesel—by treating the feed
with hydrogen at elevated temperature and
pressure in the presence of a catalyst.
● The feed types considered here are: Naphtha,
Kerosene, Gas oils, Atmospheric resids or
reduced crudes
● principal impurities to be removed are: Sulfur,
Nitrogen, Oxygen, Olefins, Metals
Chemical Sweetening
● treats sulfur compounds (hydrogen sulfide,
thiophene and mercaptan) to improve color,
odor, and oxidation stability. Sweetening
also reduces concentrations of carbon
dioxide.
Acid Gas Removal
● Sour gas separated in the Gas
Processing unit is sent to the Amine
Unit for acid gas removal using
chemical solvents such as
monoethanolamide (MEA), or
diethanolamine (DEA)
● the sour gas is pumped from the
bottom of an absorption column to get
in contact with the basic solution
(typically 15-30wt% diethanolamine) to
capture H2S (and other acidic gases
such as CO2) in the solution
Feedstock and
Product Handling
Feedstock and Product Handling
● consist of unloading, storage,

blending, and loading
activities.
Auxiliary Facilities
Auxiliary Facilities
● wide assortment of processes and

equipment not directly involved in
the refining of crude oil is used in
functions vital to the operation of
the refinery
● products from auxiliary facilities

(clean water, steam, and process
heat) are required by most
process units throughout the
refinery
Thank you!

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CHAPTER IV

UPSTREAM OIL AND GAS SECTOR

Figure 1. Phasing and expenditure of atypical exploration programme.

Figure 2. Basin Modelling- petroleum System

2. Seismic acquisition and processing

Figure 2. Seismic Surveying

Geological mapping and prospecting

Drilling Systems and Equipment

Figure 4. Drill String Assembly

Figure 5. Drill Bit Types

Mill tooth bits

Figure 7. Insert Drilling Bit

Figure 8. Types of Fixed Cutter Drill Bits

TSP Drilling Bits

The PDC Drilling Bits

Diamond Drilling Bits:

Figure 11. Diamond Bit

The ‘midstream’ segment of the oil and natural gas

Laying pipelines is a construction project that requires specialized heavy equipment, as

Figure 1. Boiling Fractions of Petroleum

Figure 3. Sources of Naptha

Refinery Process Categories

Dewatering and Desalting

2. Petroleum conversion processes

3. Petroleum treating processes

4. Feedstock and product handling

Figure 5. Schematic Overview of Refinery Process

Figure 6. Crude Distillation unit

● Vacuum distillation unit (VDU)

✔ Thermal Reforming In carrying out thermal reforming, a feedstock such

✔ Catalysts The composition of a reforming catalyst is dictated by the

Figure 10. Isomerization

Figure 11. Alkylation Process

Figure 13. Visbreaking Process

Figure 14. Delayed Coking Unit

✔ Fluid Coking Fluid coking is a continuous process that uses the

Figure 17. Simplified Hydrotreating Process Flow Diagram

● Acid Gas Removal

Feedstock And Product Handling -

Oil & Gas

Discuss the oil

Illustrate the basic parts

Political and economic considerations include political regime and Government

Social considerations will include any threat of civil disorder, the

• Every prospect starts with a geological idea.

The main types of sedimentary source rocks are:

Permeability - A measure of the level of connectivity between the source rock's

• Preliminary prospect research involves an investment of primarily time to make

• Generation companies do not want to invest capital to completely develop a

• Reviewing seismic the generation company may have in its library.

• QC publicly available seismic.

Completing a developed prospect usually involves utilizing multiple confirming geological,

• The sound waves travel under the

• These reflections travel at different

• The seismic receiving truck reads

• Technological development has provided oil companies with Basin Modeling –

• Recently electro-magnetic techniques have also

• Since at this point very few hard facts are available

• More detailed investigations will be integrated to

A prospect is a viable target evidenced by geological and geophysical indications

• Geological mapping and prospecting are valuable techniques in an petroleum

• Geological mapping It is basically a technique which allows a graphical presentation of

• Geological prospecting make use of geological disciplines such as petrography,