FUNDAMENTALS OF OIL AND GAS PROCESSING

The oil and gas industry is usually divided into three major sectors: upstream, midstream and
downstream. The upstream sector includes the searching for potential underground crude oil and
natural gas fields, drilling of exploratory wells, and subsequently drilling and operating the wells
that recover and bring the crude oil and/or raw natural gas to the surface. The upstream segment
of the oil and gas industry contains exploration activities, which include creating geological
surveys and obtaining land rights, and production activities, which include onshore and offshore
drilling.
The midstream sector involves the transportation (by pipeline, rail, barge, oil tanker or truck),
storage, and wholesale marketing of crude or refined petroleum products. Pipelines and other
transport systems can be used to move crude oil from production sites to refineries and deliver
the various refined products to downstream distributors.
The downstream sector commonly refers to the refining of petroleum crude oil and the
processing and purifying of raw natural gas as well as the marketing and distribution of products
derived from crude oil and natural gas. The downstream sector touches consumers through
products such as gasoline or petrol, kerosene, jet fuel, diesel oil, heating oil, fuel oils, lubricants,
waxes, asphalt, natural gas, and liquefied petroleum gas.
Exploration and production together is referred to as E&P. Exploration is about finding
underground reservoirs of oil and gas (oil and gas fields), and includes structural geology studies,
prospecting, seismic surveys, drilling activities that take place before the development of a field
is finally decided.
Determination of the number and location of reservoirs, types of wells, assessment of oil
recovery mechanism, design of wells to meet production requirements, process facilities,
infrastructure facilities, terminal/export facilities, and operating and maintenance strategies is
done in the development stage.
Production is the process of producing the discovered petroleum using drilled wells through
which the reservoir’s fluids (oil, gas, and water) are brought to the surface and separated. In fact,
bringing the well fluids to the surface and preparing them for use in refinery or processing plants
are called production.
Hydrocarbon fluids and gases are processed and separated into marketable products or feedstock
for the petrochemical industries in crude-oil refineries and gas-processing plants. More than
2500 refined products are generally produced from crude oil in the petroleum refining industry.
Service providers provide storage facilities at terminals throughout the oil and gas distribution
systems. These facilities are most often located near producing, 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. In the other words, storage is used by all sectors of the petroleum industry. Liquid
petroleum products may be stored in above-ground or underground steel or concrete tanks or in
underground salt domes, mined caverns, or abandoned mines.
Crude 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, e.g. across continents.
Tankers and barges are also employed for long-distance transportation, often for international
transport. Rail and truck can also be used for longer distances but are most cost-effective for
shorter routes.

Figure 1: Crude oil transportation by barge

Crude oil is categorized using two qualities: Density and sulfur content.
 Density is measured by API gravity, and ranges from light (high API gravity/low density)
to heavy (low API gravity/high density).
 Sulfur content ranges from sweet (low sulfur content) to sour (high sulfur content).
Light and sweet crude oil is usually priced higher, and therefore more sought-after, because it is
easier to refine to make gasoline than heavy and sour crude oil. Oil volume is measured in
barrels (bbl), which equals 42 gallons. Western Uganda has approximately 6.5 billion barrels of
oil reserves, with at least 1.4 billion estimated to be economically recoverable. China National
Offshore Oil Corporation (CNOOC) and Total Energies co-own all of Uganda's existing oilfields
alongside the state-run Uganda National Oil Company (UNOC). At peak, Uganda plans to
produce about 230,000 barrels of crude oil per day.
Natural gas is found in both associated formations, meaning it is formed and produced with oil,
and non-associated reservoirs. Gas can either be dry (pure methane), or wet (exists with other
hydrocarbons like butane). Although wet gas must be treated to remove the other hydrocarbons
and other condensates before it can be transported, it can increase producers' revenues because
they can sell those removed products.
In the petroleum industry, locating underground or underwater oil reserves characterizes the
upstream process. The upstream process in petroleum involves bringing oil and gas to the
surface. Extraction wells represent an example of a structure operating in this stage in the
process. Upstream is a term for the operations stages in the oil and gas industry that involve
exploration and production. Oil and gas companies can generally be divided into three segments:
upstream, midstream, and downstream. Upstream firms deal primarily with the exploration and
initial production stages of the oil and gas industry.
Oil and gas wells produce a mixture of hydrocarbon gas, condensate or oil; water with dissolved
minerals, usually including a large amount of salt; other gases, including nitrogen, carbon
dioxide (CO2), and possibly hydrogen sulfide (H2S); and solids, including sand from the
reservoir, dirt, scale, and corrosion products from the tubing. The purpose of oil and gas
processing is to separate, remove, or transform these various components to make the
hydrocarbons ready for sale.
For the hydrocarbons (gas or liquid) to be sold, they must be:
 Separated from the water and solids
 Measured
 Sold
 Transported by pipeline, truck, rail, or ocean tanker to the user
Oil and gas production is one of the most capital intensive industries: It requires expensive
equipment and highly skilled labors. Once a company identifies where oil or gas is located, plans
begin for drilling. Many oil and gas companies contract with specialized drilling firms and pay
for the labor crew and rig day rates.
Drilling depths, rock hardness, weather conditions and distance of the site can all affect the
drilling duration. Tracking data using smart technologies can help with drilling efficiency and
well performance by providing real-time information and trends. While every drilling rig has the
same essential components, the drilling methods vary depending on the type of oil or gas and the
geology of the location.
Oil and gas process overview
1. Facilities; Offshore and onshore.
2. Main process sections; Wellheads, Manifolds/gathering, Separation, Gas compression,
Metering, storage and export.
3. Utility systems; these are systems which does not handle the hydrocarbon process flow,
but provides some utility to the main process safety or residents.
OIL AND GAS PRODUCTION FACILITY
An oil and gas production facility is used in production process of fluids from oil wells in order
to separate out key components and prepare them for export. Typical oil well production fluids
are a mixture of oil, gas and produced water. An oil production plant is distinct from an oil
depot, which does not have processing facilities. Oil production facility may be associated with
onshore or offshore oil fields.
Onshore means on land. In the oil and gas industry, any exploration and production work done
on land with land equipment is said to be onshore. Offshore means off land, which means on the
water. Any exploration and production work done on water with marine equipment is then said
to be offshore.
a. Onshore
Onshore refers to processes that take place on land that are associated with oil, gas or condensate
production that has taken place offshore. The offshore production facility delivers oil, gas and
condensate by pipelines to the onshore terminal and processing facility. Alternatively oil may be
delivered by ocean-going tanker to the onshore terminal. The configuration of onshore oil
production facilities depends on the size of the oil field.
For simple fields comprising a single well or a few wells, an oil storage tank may be sufficient.
The tank is emptied periodically by road tanker and transferred to an oil refinery. For larger
production rates a rail tanker transfer facility may be appropriate. For larger fields a full three-
phase processing facility is required. Three-phase separators separate the well fluids into its three
constituent phases: oil, gas and produced water. Oil may be transferred by road or rail tanker or
by pipeline to an oil refinery. Gas may be used on the site to run gas engines to produce
electricity or can be piped to local users. Excess gas is burned in a ground flare. Produced water
may be re-injected into the reservoir.
In onshore drilling facilities, the wells are grouped together in a field, ranging from a half acre
per well for heavy crude oil to 80 acres per well for natural gas. The group of wells are
connected by carbon steel tubes which sends the oil and gas to a production and processing
facility where the oil and gas are treated through a chemical and heating process. Onshore
production companies can turn on and off rigs more easily than offshore rigs to respond to
market conditions.
 Figure 2: Onshore facility

Onshore oil terminals may include large crude oil tanks for the initial storage of oil prior to
processing. Such tanks provide a buffer volume where oil is delivered by tanker. The oil tanker
delivery rate is considerably greater than the processing capacity of the plant. Crude oil tanks
also allow offshore production to continue if the export route becomes unavailable.
Onshore oil terminals generally have fired heaters to heat the oil to improve subsequent
separation. Separator vessels and coalescers stabilize the crude and remove any sediments,
produced water and allow light hydrocarbons to flash-off. Large separation vessels give the oil
an appropriate residence time in the vessel to allow effective separation to occur.
Onshore separators operate at near atmospheric pressure to release as much vapor as possible.
The oil processing plant aims to achieve an appropriate vapor pressure specification for the oil.
The associated gas is processed for export or used in the plant as fuel gas. Stabilized oil is routed
to storage tanks prior to dispatch for international sales delivery by tanker, or to a local oil
refinery for processing.
Advantages of onshore facility
 Onshore drilling is cost-effective
While there are, in fact, some economic benefits to offshore drilling, the hard facts are that it
could take years for a site to actually get a drilling facility set up in the middle of the ocean. This
alone takes a big cut out of facility budgets.
With onshore drilling, shales are readily available, and equipment can easily be moved from site
to site with the help of skids and other resources that make drilling sites flexible and mobile. This
cuts down on the shipping and installation costs that would otherwise be much higher for an
offshore project.
 Onshore simply provides greater production results
The facts are that onshore production is a process that produces fabulous results for the oil and
gas industry. The reason for this is that resources are just more plentiful on land. Currently, 70
percent of the world’s oil and gas comes from onshore sites, with 30 percent being produced
offshore. Even though offshore sites can be a source for fuel, there is clearly a method between
the two that is more reliable.

b. Offshore
Offshore drilling is a mechanical process where a wellbore is drilled below the seabed. It is
typically carried out in order to explore for and subsequently extract petroleum that lies in rock
formations beneath the seabed. Most commonly, the term is used to describe drilling activities on
the continental shelf, though the term can also be applied to drilling in lakes, inshore waters and
inland seas. Offshore drilling presents environmental challenges, both offshore and onshore from
the produced hydrocarbons and the materials used during the drilling operation.
Offshore drilling uses a single platform that is either fixed (bottom supported) or mobile (floating
secured with anchors). Offshore drilling is more expensive than onshore drilling, and fixed rigs
are more expensive than mobile rigs. Most production facilities are located on coastal shores
near offshore rigs.
In the Oil & Gas industry, a Central Processing Facility (CPF) is part of the upstream process
that first transforms crude oil or raw natural gas after it exits the production wells. The CPF
separates oil from the gas, water, sand, solvents or additives it may contain.

Figure 3: Offshore oil and gas facility in Canada

Task: Which oil facility is the Tilenga project set to have?

Offshore oil drilling involves the extraction of fossil fuels from the earth’s crust below the ocean
or seabed. That’s because the ocean bed is rich in oil wells. However, locating the offshore oil
reserves and installing an oil rig on the water surface can be daunting. As a result, it makes
offshore drilling costly. An oil rig is a structure above an oil well on land or in the sea that has
special equipment attached to it for drilling and removing oil from the ground also called oil
platform.

Factors affecting the decision to recover offshore oil and gas

1. Physical Factors
 Ocean Related Factors
 Climate/Weather Factors
 Oil Related Factors
 Environmental Protection Factors
Ocean Related Factors
a) Ocean Depth
b) Ocean Currents
c) Icebergs
d) Pack Ice.

Climate/Weather Factors
a) Wind Speeds
b) Storms.

Oil Related Factors

a) Size of Reserve
b) Oil Quality.
Environmental Protection Factors
a) How does the other physical factors affect the chances of an oil spill?
b) Other resources like fish stocks, marine mammals and spawning grounds that may be affected
by an oil spill.
2. Human Factors
 Worker Safety
 Financial Factors
Worker Safety
a) How safe can the drill rig and production platform be for the workers?
Financial Factors
a) Cost of inputs like building a rig to withstand icebergs or building a rig to drill at great depths.
b) Cost of processes like transporting the oil from offshore to land, or maintaining the platforms
equipment.
c) Price of oil set by world markets.
Economic importance of off-shore oil and gas operations
Our Life style depends on energy (Oil and Gas being dominant). Oil is valued as a fuel because it
produces large amounts of heat and power per unit of mass. It is relatively easy to store, move,
and convenient as a source of energy for transportation. Also, oil is a raw material that can be
processed into refined products.
Factors affecting viability of off-shore oil industry
 World oil prices:
High prices, encourage companies to develop oil production. Low prices discourage companies
due to reduced profit.
 Government policy:
Tax breaks encourage companies to develop oil production. Tax increases discourage companies
due to reduced profit.

Advantages of offshore oil drilling.

 Increases Oil Production: Since the advent of offshore drilling technology, petroleum
production has grown to sustain the rising demand.
 Promotes Energy Independence: With offshore drilling, many foreign countries can now
explore the ocean for oil and gas, promoting self-reliance.
 Encourages Economic Growth: Third-world nations bordering oceans can explore their
oceanic oil reserves and grow.
The drawbacks of offshore oil drilling.
 Costly and Potentially Dangerous: Offshore oil drilling is expensive as it requires
sophisticated equipment. Also, it poses significant risks to workers.
 Numerous Environmental Damages: Offshore oil drilling generates mass pollution,
primarily during oil spills. If not cleared, the spills can harm marine life.
Since offshore oil drilling involves many risks, it’s essential to prioritize safety. One way to
mitigate risks at offshore drilling sites is installing blowout preventers (BOPs). A blowout
preventer is a specialized valve or similar mechanical device, used to seal, control and monitor
oil and gas wells to prevent blowouts, the uncontrolled release of crude oil or natural gas from a
well. They are usually installed in stacks of other valves.
DRILLING RIGS
A drill rig is a machine that consists of all the parts necessary to bore a pilot hole into the earth's
crust, which can then be enlarged to extract product. Drill rigs are used to locate and extract
water, oil, gas or any other product from the earth. They can be used onshore or offshore and are
configured to match the product and environment in which they operate.
A drilling rig is a device used to drill, case and cement water, oil and gas wells. The selection
and sizing of a drilling rig depends on the following:
1. The well design.
2. The anticipated loads during drilling, tripping, casing and ultimately testing and completing
the well (The maximum hole depth).
3. Comparison of the rating of the existing rigs with the well design loads (Rig availability).
4. Selection of the appropriate rig and its components (Horse power requirements & cost).
Types of drilling rig
• Onshore (land) rigs. They can drill from few to several thousand meters (1000-7500 m).
• Offshore rigs. Offshore rigs are of five basic types; each type is designed to suit a specific
offshore environment.

OFFSHORE RIGS
An offshore rig is a large structure on or in water with facilities to drill wells, to extract and
process oil and natural gas, and to temporarily store product until it can be brought to shore for
refining and marketing. In many cases, the platform contains facilities to house the workforce as
well. These are further classified into five types namely:
 Barge
 Jack-Up
 Fixed Platform
 Submersible & Semi-Submersible
 Drillship
1. Barge
The barge is a shallow draft, flat-bottom vessel equipped as an offshore drilling unit, used
primarily in swampy areas and shallow water. This type of vessel can be found operating in the
swamps of river deltas in West Africa, in coastal areas, and in shallow lakes. It can be towed to
the location and then ballasted to rest on the bottom.
2. Jack-Up
Bottom of the legs rest on the sea floor. Can drill in water depths ranging from few meters up to
120 m. Towed to the well site position by a boat
3. Fixed Platform
Fixed platforms are usually used in development drilling. Several wells can be drilled from the
same platform through multiple conductors. Most fixed platforms are located in water depths of
450 to 600 feet; some are even set in waters 800 feet deep. The standard configuration consists of
a steel jacket pinned to the seabed by long steel piles, surmounted by a steel deck which supports
equipment and accommodation buildings or modules, one or more drilling rigs, and a helicopter
deck. Some platforms are built of reinforced concrete or a combination of steel and concrete.
4. Submersible & Semi-submersible rigs
The submersible rig is floated to the well location and rests on the sea floor when it is drilling.
Semi-submersible rigs are floating rigs that have pontoons and columns that can be flooded with
water to keep the rig stable. Semi- submersible rigs utilize a spread anchoring system of radially
spaced anchors to hold their position. Some semi-submersibles are capable of setting on the sea
floor, in the same manner as submersibles. Some semi-submersible rigs can drill in water depths
over 2200 m.
5. Drillship rigs
These are ships or “floaters” specially constructed or converted for deep water drilling. They
offer greater mobility than jack-up or semisubmersible rigs, but they are not as stable when
drilling. They are capable of drilling in almost any depth of water. Modern ships are fitted with
dynamic positioning equipment which enables them to keep on-station above the borehole. They
have greater storage capacity than other types of rigs. They are often able to drill deeper wells
and operate independent of service and supply ships.