Transcript Economic Structure of the Oil and Gas Industry

Introduction to Petroleum
Industry
Structured around major activities:
Up Stream:
1. Exploration
2. Drilling
3. Production
4. Reservoir
Structured around major activities:
Down Stream:
1. Transportation
2. Refining
3. Petrochemicals
4. Marketing
Division of work may change: time, location, size,
policies, laws
Traits of Oil and Gas industry
1.
2.
3.
4.
5.
Require large investments
Entail high technical and political risks
Products are exhaustible: no recycling
Has a great influence of foreign societies
Has major international companies and many
local or international independents
6. Deal with strategic commodities
7. Heavily use high technology
Weight of the ME in World’s Energy
1.
2.
3.
4.
5.
6.
Share of production in 30% ( 22 MMB/D )
Low regional consumption
Big share of reserves: oil 65% , Gas 30%
Low production cost
Strategic location
Surplus refined products ( 23% from their
production )
The Future : Weight of ME
1. World will still depend on oil and gas
2. ME lead will continue
3. Major reserves will remain in the ME
Main Market of Middle East Oil
Area
% of Imports
USA
21
OECD , Europe
43.2
Japan
64
Eastern Asia
80
Major ME exporters of LNG
Area
Million tons / year
Qatar
40
Algeria
14.7
Iran
5
Abu Dhabi
3.4
The ME will Enjoy its central position for the years to
come .
Pressure &
cementation
Sedimentary
Rocks
Sediments
Erosion
Heat & pressure
Erosion
Erosion
Metamorphic
Igneous
Rocks
Rocks
Heat
Cooling
The Rock Cycle
Magma
‫مصيدة متكونة نتيجة لقبة ملحية‬
‫خارقة‬
‫مصيدة تركيبة‪ :‬أثر الفوالق عىل انفصال جتمعات‬
‫النفط يف مصايد منفصةل من الكتةل الصتصدعة ‪.‬‬
Origin of Petroleum
• Oil is a fossil fuel that is formed from the remains of
tiny plants and animals, known as plankton that died
in ancient seas between 10 million and 600 million
years ago.
• The plankton fell to the bottom of the sea and after
decaying, the organisms formed sedimentary layers.
• In the layers, little or no oxygen is present and this
allows microorganisms to break down the remains
into carbon-rich compounds that form organic layers.
Origin of Petroleum
• The organic material mix with the sediments to
form fine-grained shale, or source rock.
• As the sedimentary rocks layer, they exert
extreme heat and pressure to distill the organic
material into crude oil and natural gas.
Migration of Petroleum
• The oil then flows from the source rock and
accumulates in thicker, more porous limestone
or sandstone known as reservoir rock.
• When the earth moves the oil and natural gas is
trapped in reservoir rocks, which are between
layers of impermeable rock, or cap rock– usually
granite or marble.
• The whole process takes millions of years.
Geophysical Prospecting Methods
1) Magnetic Surveying :
M1 M2
Where :
F=a
r2
Fmagnetic Force.
A–
constant generally unity.
M1 & M2 – strength of the respective poles.
r–
distance between poles.
2) Gravity Surveying :
M1 M2
Where :
F=G
d2
F – Gravitational force between two
point masses M1 & M2
d – Distance between M1 & M2
G – Gravitational constant
-11
2
3
( 6.67 × 10 m / kg S )
3) Seismic Surveying .
3) Seismic Surveying
• Oil geologists examine surface features, surface rock,
reservoir rock, entrapment, satellite images, sensitive
gravity meters and manometers.
• The most common technique for finding reserves is
seismology which uses shock waves that interpret
waves reflected back to the surface.
• Despite all the technologies, modern oil exploration
methods are only 10 percent successful.
4) Remote Sensing:
• Collection of data without the actual contact of
the object . ( aeromagnetic & gravity ) .
• Useful for topographic mapping specially in
desert areas
• When used in conjunction with other
techniques such as gravity & magnetic , it may
delineate anomalies that deserve further
attention on the ground
• The Government and Oil companies
usually assign finding oil to contracted
geologists.