CONTENTS

1. 2. Introduction to Oil & Gas Industry Myanmar Oil & Gas Industry
2.1 Historical Main Oil Field 2.2 Historical Development of Drilling & Production Hand-Dug Wells Rotary Drilling System 2.3 Myanmar Oil & Gas Industry after 1963

4.

Offshore Drilling Rigs & Production Platforms
4.1 Offshore Jack-up Drilling Rig 4.2 Offshore Production Platform

5. 6.

Services in Oil & Gas Industry Current Oil & Gas Activities in Myanmar
6.1 Onshore Activities 6.2 Offshore Activities

3.

How Drilling Works
3.1 3.2 3.3 3.4 3.5 3.6 3.7 How Oil is formed Finding Oil Preparing to Drill Components of a Drilling Rig Drilling Operation Extracting the Oil Transporting of Oil & Gas

7.

Out Look for Myanmar Oil & Gas Industry

3. How Drilling Works
In this section we will discuss about the processes of finding, drilling and production of oil.

3.1 How oil is formed. (1/3)
Oil is a fossil fuel that can be found in many countries around the world. Oil is formed from the remains of tiny plants and animals (plankton) that died in ancient seas between 10 million and 600 million years ago. After the organisms died, they sank into the sand and mud at the bottom of the sea. Over the years, the organisms decayed in the sedimentary layers. In these layers, there was little or no oxygen present. So microorganisms broke the remains into carbon-rich compounds that formed organic layers.

3.1 How oil is formed. (2/3)
land
Malcid washed into The sea from land Parts of the dead materials change to hydrocarbons, mixed with other sedimentary materials Layers become more and more compressed as further layers settle on top New material depositing Sediment forms on impervious layer, called the cap rock.

Living material dies Remains of plankton Tiny forms of sea life

Layers of sediment form

Topped by the layer above, in the pores of sedimentary rocks- these act as a reservoir

The organic material mixed with the sediments, forming fine-grained shale, or source rock. As new sedimentary layers were deposited, they exerted intense pressure and heat on the source rock. The heat and pressure distilled the organic material into crude oil and natural gas. The oil flowed from the source rock and accumulated in thicker, more porous limestone or sandstone, called reservoir rock.

3.1 How oil is formed. (3/3)
Movements in the Earth trapped the oil and natural gas in the reservoir rocks between layers of impermeable rock, or cap rock, such as granite or marble. Oil reservoir rocks (red) and natural gas (blue) can be trapped by folding (left), faulting (middle) or pinching out (right)

These movements of the Earth include:
Folding - Horizontal movements press inward and move the rock layers upward into a fold or anticline. Faulting - The layers of rock crack, and one side shifts upward or downward. Pinching out - A layer of impermeable rock is squeezed upward into the reservoir rock.

3.2 Finding Oil (1/5)
Finally, and most commonly, it is used seismology, creating shock waves that pass through hidden rock layers and interpreting the waves that are reflected back to the surface. In seismic surveys, a shock wave is created by the following; 
Compressed-air gun - shoots pulses of air into the water (for exploration over water)  Thumper truck - slams heavy plates into the ground (for exploration over land)  Explosives - drilled into the ground (for exploration over land) or thrown overboard (for exploration over water), and detonated.

The shock waves travel beneath the surface of the Earth and are reflected back by the various rock layers. The reflections travel at different speeds depending upon the type or density of rock layers through which they must pass.

3.2 Finding Oil (2/5)
The task of finding oil is assigned to geologists. Their task is to find the right conditions for an oil trap ³ the right source rock, reservoir rock and entrapment. Many years ago, geologists interpreted surface features, surface rock and soil types, and perhaps some small core samples obtained by shallow drilling. Modern oil geologists also examine surface rocks and terrain, with the additional help of satellite images. However, it can be used a variety of other methods to find oil such as; 
Sensitive gravity meters to measure tiny changes in the Earth·s gravitational field that could indicate flowing oil,  Sensitive magnetometers to measure tiny changes in the Earth·s magnetic field caused by flowing oil,  Sniffers (sensitive electronic noses) to detect the smell of hydrocarbons.

3.2 Finding Oil (3/5)
Finally, and most commonly, they use seismology, creating shock waves that pass through hidden rock layers and interpreting the waves that are reflected back to the surface. In seismic surveys, a shock wave is created by the following: 
Compressed-air gun - shoots pulses of air into the water (for exploration over water)  Thumper truck - slams heavy plates into the ground (for exploration over land)  Explosives - drilled into the ground (for exploration over land) or thrown overboard (for exploration over water), and detonated.

The shock waves travel beneath the surface of the Earth and are reflected back by the various rock layers. The reflections travel at different speeds depending upon the type or density of rock layers through which they must pass. The reflections of the shock waves are detected by sensitive microphones or vibration detectors hydrophones over water, seismometers over land. The readings are interpreted by seismologists for signs of oil and gas traps.

3.2 Finding Oil (4/5)

3.2 Finding Oil (5/5)
Although modern oil-exploration methods are better than previous ones, they still may have only a 10-percent success rate for finding new oil fields. Once a prospective oil strike is found, the location is marked by GPS coordinates on land or by marker buoys on water.

3.3 Preparing to Drill (1/8)
Once the site has been selected, it must be surveyed to determine its boundaries, and environmental impact studies may be done. Lease agreements, titles and right-of way accesses for the land must be obtained and evaluated legally. For off-shore sites, legal jurisdiction must be determined. Once the legal issues have been settled, the crew goes about preparing the land: 
The land is cleared and leveled, and access roads may be built.  As the main component of drilling mud is water , there must be a source of water nearby. If there is no natural source, they drill a water well. Pumps & water lines are installed.  They dig a reserve pit, which is used to dispose of rock cuttings and drilling mud during the drilling process, and line it with plastic to protect the environment.  If the site is an ecologically sensitive area, such as a marsh or wilderness, then the cuttings and mud must be disposed offsite trucked away instead of placed in a pit.

3.3 Preparing to Drill (2/8)

Land clearing & preparing for BHP

Reserve mud pits

3.3 Preparing to Drill (3/8)
Once the land has been prepared, several holes must be dug to make way for the rig and the main hole. A rectangular pit, called a cellar, is dug around the location of the actual drilling hole. The first part of holes is a large diameter hole in the cellar. It is lined with large diameter pipe called conductor pipe. Another hole is dug off to the side of the cellar and is lined with pipe. It is called the rat hole ( as a place to temporarily store a piece of drill stream).

Cellar

Cellar & rat hole

3.3 Preparing to Drill (4/8)
MOVING RIG COMPONENTS TO THE SITE Land Rigs ) ‡ ‡ (

‡

Cranes, Trucks and river crafts are used depending on location of the site. Rig components are designed for portability are easily loaded & unloaded. Oil Field Trucks, Cranes & other trucks are used for carrying rig components. Rig components are moved into some remote area by helicopters.

3.3 Preparing to Drill (5/8)
MOVING RIG COMPONENTS TO THE SITE ( Offshore Rigs ) Mobile offshore rigs ( such as jackup rig, submersible rig, semisubmersible rig, and drill ship ) are used at offshore blocks. Jackup Rig ² floats when moving to the location. At site, huge legs are cranked down until they contact the sea floor and penetrate some feets into the seabed. Jackup rigs are limited to drill in water depth of 350 ft. Submersible Rig ² It floats on the hull while towing to the site. The hulls are flooded and come to rest on bottom at the site. S Rigs are also limited to drill in shallow waters.
Jackup Rig

3.3 Preparing to Drill (6/8)
MOVING RIG COMPONENTS TO THE SITE ( Offshore Rigs ) ‡ Semisubmersible Rig ² It is similar to submersible. It may have two or more hulls upon which the rig floats while towing to the location. Once on location the hulls are flooded but they do not settle to the bottom. They submerge only to a depth a little below the water surface. Semisubmersible Rigs are often selected because of their excellent stability in rough, deep seas.
Semisubmersible Rig

‡

3.3 Preparing to Drill (7/8)
MOVING RIG COMPONENTS TO THE SITE
Rig Move for Jack-up Rig

( Offshore Rigs )

Rig Move for Semisubmersible Rig

3.3 Preparing to Drill (8/8)
MOVING RIG COMPONENTS TO THE SITE ‡ ( Offshore Rigs )

Drill Ship ² It is shaped just like any ocean-going ship. However drilling equipment ( with other modification ) make a drill ship distinctive. Drill ships are the most mobile because of its selfpropelled function.
Drill Ship

3.4 Components of a Drilling Rig (1/9)

3.4 Components of a Drilling Rig (2/9)
Power system
Large diesel engines - burn diesel-fuel oil to provide the main source of power. Electrical generators - powered by the diesel engines to provide electrical power.

Derrick or Mast - support structure that holds the drilling apparatus; tall enough to allow new sections of drill pipe to be added to the drilling apparatus as drilling progresses. Manufacturers rate Derrick or Mast in terms of the vertical load they can carry and wind load they can withstand from the side. Most derricks & masts can withstand a wind load of 100 to 130 mile per hour. Drawworks (hoisting system) - used for lifting heavy loads; consists of a mechanical winch with a large steel cable spool, a block-and-tackle pulley and a receiving storage reel for the cable. It is driven by electric motors or chain drive. Crown Block ² is a large multiple pulley installed at the top of the Mast.

3.4 Components of a Drilling Rig (3/9)
1. 2.
1

Drawworks Crown Block Mechanical Power Drive System

3.

3

2

3.4 Components of a Drilling Rig (4/9)
Traveling block: an arrangement of pulleys or sheaves which moves up or down in the derrick again up to the crown block. Drilling Line  Fastline - the part of the drilling line running out of the drawworks up to the crown block.  Dead Line the part of the line from the end of the crown block to the secured wirerope supply reel.

3.4 Components of a Drilling Rig (5/9)
Swivel: a mechanical device that suspends the weight of the drill string, & permits the drill string to rotate. The rotary hose ( kelly hose ) is attached to the side of swivel and drilling mud enters the swivel through this hose. Drill Bit : is a device attached to the end of the drill string that breaks apart the rock being drilled. It contains jets through which the drilling fluid exits. Drill String : The assembly of members between the swivel and drill bit including kelly,drill pipe and drill collars. Kelly : four- or six-sided pipe that transfers rotary motion of the rotary table to the drill string. Kellys are about 40 feet long.

3.4 Components of a Drilling Rig (6/9)
‡ Drill Pipe: joints of hollow tubing used to connect the surface equipment to the bottom hole assembly (BHA) and acts as a conduit for the drilling fluid. In the diagram, these are stands of drill pipe which are 2 or 3 joints of drill pipe connected together and stood in the derrick vertically, usually to save time while Tripping pipe. A joint of drill pipe is 30 ft long. Each end of each joint is threaded. The female end is called ´ box µ and the male end is called ´ pin µ. These threaded ends are called ´tool jointsµ which are welded onto the outside of the drill pipe body. ‡ Drill Collars : are special heavy-walled pipes. They are heavier than drill pipes and used on the bottom part of the drill string to put weight on the bit. The threads are cut directly onto and in the drill collars as the wall is so thick.

3.4 Components of a Drilling Rig (7/9)
Rotary Table (turntable) - rotates the drill string along with the attached tools and bit. It is part of the drilling apparatus and powered by electric motors or chain drive. Mud pump: reciprocal type of pump used to circulate drilling fluid through the system. Mud tanks: often called mud pits, provides a reserve store of drilling fluid until it is required down the well bore. It pumps drilling mud (mixture of water, clay, weighting material and chemicals, used to lift rock cuttings from the drill bit to the surface) under pressure through the kelly, rotary table, drill pipes and drill collars. Shale shaker: separates drill cuttings from the drilling fluid before it is pumped back down the borehole.

3.4 Components of a Drilling Rig (8/9)
Centrifuge: an industrial version of the device that separates fine silt and sand from the drilling fluid. Degasser: a device that separates air and/or gas from the drilling fluid. Desander / desilter: contains a set of Hydrocyclones that separate sand and silt from the drilling fluid. Blowout preventer (BOP) - high-pressure valves (located under the land rig or on the sea floor) that seal the highpressure drill lines and relieve pressure when necessary to prevent a blowout (uncontrolled gush of gas or oil to the surface, often associated with fire)

3.4 Components of a Drilling Rig (9/9)
Centrifuge: an industrial version of the device that separates fine silt and sand from the drilling fluid. Elevators: a hinged device that is used to latch to the drill pipe or casing to facilitate the lowering or lifting (of pipe or casing) into or out of the borehole. Chain tongs: wrench with a section of chain, that wraps around whatever is being tightened or loosened. Similar to a pipe wrench.

1. The Introduction to Oil & Gas Industry
The midstream sector includes;

3/3

Transporting of crude oil, natural gas, natural gas liquids (LNGs, mainly ethane, propane and butane) and sulphur To store & market

The downstream sector is used to refer to;
The refining of crude oil The selling and distribution of natural gas and products derived from crude oil ( such as liquified petroleum gas (LPG), gasoline or petrol, jet fuel, diesel oil, other fuel oils, asphalt and petroleum coke )