Oil Field Development

By,
Gauri Sankar Bora
 Life Cycle of an oil field

• Crude oil accumulation

• An oil company is given permission to explore
• Geological Survey
• Exploration drilling: status of reserve and resource
• Production and Development Plan: status of reserve and resource
• Production and sales
• Closing of field/decommissioning
 Crude oil accumulation
Time: Hundreds of millions of years ago

• Crude oil is formed from organic matter that has been buried, for example at
the bottom of the ocean, and encased in clay, sand and crumbled rock.
• Different strata are thereby formed. When these strata are placed under high
pressure and heat, crude oil and natural gas form.
• The mixture of crude oil, natural gas and saltwater very slowly migrates
through porous layers of rock. This migration takes place over thousands of
years. Where impenetrable layers prevent the mixture from getting any
further, it accumulates in the porous sandstone and limestone layers in the
bedrock.
 Gaining access: An oil company is given permission to explore

Status of reserves and resources:

Licence: Exploration licence Time
 An oil company is given permission to explore, by the oil authority in the
country concerned.
The authority gives companies permission by awarding exploration licences
within what are known as licence rounds.
One oil company is appointed as operator of an exploration licence and is
responsible for running the operations. Other part-owners act as partners in
the licence.
 Geological surveys

Status of reserves and resources: Prospective resources

Licence: Exploration licence Time: 3–5 years

 Looking for oil is a complicated process. Firstly, geological and

geophysical maps and models of an area are prepared using methods such as
seismic surveys.
 Large number of measuring instruments are placed out on the surface of
the ocean or land and an explosive charge is then detonated.
 Time taken for the explosion’s sound waves to be reflected back to the
measuring instruments tells how the bedrock is structured and whether there
are types of rock that could contain oil and gas.
 Another method is based on measuring magnetic fields.
 Diagrams and maps are then analysed by geologists.
 Exploration drilling

Licence: Exploration licence Time: 4–10 years

 Exploration drilling is carried out in areas where oil may be present. First an
appraisal well is drilled, Samples are analysed continually during the drilling.
 If oil or gas are discovered the company drills fringe wells to determine the
extent of the reservoir.
Data from the drilling is analysed and calculations made of the volume of oil
that the accumulation contains and whether it is commercially worthwhile for
production.
 It may take between four and ten years from the time oil is discovered until a
field begins production – sometimes longer.
Once a company has proven an oil discovery it may define the oil found as
contingent resources
 Production and development plan

Licence: Development licence Time: approx. 1 year

 Once an operator decided to develop a field, a production and

development plan is drawn up.

 A field must be capable of producing for many years and in times of

low oil prices. The oil company therefore looks for development and
operating solutions that reduce the costs of this.
 Production and development plan

Floating production units, reuse of installations and subsea

solutions that contribute to lowering costs result in better
profitability and thus increase opportunities to develop minor oil
discoveries.
The country’s authorities must approve the production and
development plan. Once approved, a development licence is granted.
Once a decision has been made to develop the field the oil in the
field may be defined as reserves.
 Development of the field

Status of reserves and resources: Reserves

Licence: Development licence Time: approx. 1–7 years
Before the oil field is developed, materials and services are procured
and everything has to be installed and a system for transporting the oil
produced must also be built.

This work may be carried out by the company’s own personnel or by

external contractors.
 Development of the field

Production wells may be drilled both vertically and horizontally.

Up to 40 wells may therefore cover an area of more than 10
kilometres out from a production facility.

Once drilling is complete, the facility is test-run and fine-tuned to

achieve a stable production level.

It takes around a year to develop an onshore oil field and around
3–7 years for offshore facilities, depending on the size of the field.
 Production and sales

Status of reserves and resources: Reserves

Licence: Production licence Time: approx. 10–30 years

 When a field has been taken into production, the production is

normally ramped up for a short period of time and then the peak
production level is reached.

 The company can usually maintain this level for a period before
production naturally starts to decline. This is called the field's
natural decline which continues until the field is closed down due
to low production. 
 Production and sales
When production tails off, one measure can be to drill injection
wells and inject water or gas into the reservoir to raise the pressure,
or to install pumping equipment.

A more long-term measure is to drill new production wells in

nearby oil reservoirs and connect these to the production facility.
This is a way of prolonging the field's production life cycle.

 The oil is transported from the oil field to shipping ports where
the oil is stored in oil cisterns until it is collected by a customer
 Closedown of the oil field

Status of reserves and resources: Reserve

Licence: – Time: approx. 1 year

Once an oil field no longer contains sufficient oil to justify its

continued operation the oil company is obliged to fill in the wells,
dismantle and remove all equipment from the site and restore the
area if necessary. The licence is then returned to the authorities