IWCF™ | Resource: Module 01 | Level One

M1 | An Overview of Oil and Gas

Welcome

1 Disclaimer

Notes:

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2 Welcome

Notes:

Welcome to Module One, an Overview of Oil and Gas.

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3 Learning Objectives

Notes:

By the end of this module, you should be able to:

Recall some of the early uses of crude oil,

Outline the origins and growth of the oil industry,
Recognise significant well control events and technological developments,
Describe why geology is important to the petroleum industry,
Explain how hydrocarbons are formed,
Describe where hydrocarbons are found, and
Identify different methods for finding oil and gas.

We will use a number of terms in this module to refer to hydrocarbons, such as

oil, gas, crude oil, and petroleum.

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4 Chapters

Notes:

This module consists of six chapters. They are:

The Early Years,

Birth of an Industry,
Geology - Rocks and How they are Formed,
Hydrocarbons and Where they are Found
Geology and the Petroleum Industry, and,
Exploration for Hydrocarbons.

Each chapter will end with a short knowledge check to confirm your learning.

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5 Introduction to Oil

Notes:

Petroleum, where would we be without it?

How many items around you, do you think owe their existence to petroleum?

Petroleum is not just about fuel for our cars, trucks and aeroplanes. It’s about so
many other things that we rely on day-to-day, and rarely stop to think about what
they are made of.

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6 Introduction to Oil

Notes:

But first, the name; Petroleum is taken from the Greek words for Rock and Oil.
Petroleum or Crude Oil is a naturally occurring, flammable liquid, which can
range in colour from clear, through green, amber, brown to black and can range
from the consistency of water to that of molasses.

Once extracted, crude is refined into a large number of consumer products, from
natural gas to petrol and kerosene to asphalt and chemical reagents used to
make plastics and pharmaceuticals.

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Chapter One

1 Chapter One

Notes:

Chapter One, The Early Years.

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2 Medicinal Uses

Notes:

Crude oil has certainly had a colourful history.

Some of its early uses were waterproofing wooden boats and the Romans used it
as a weapon, for embalming, and lighting.

The Ancient Persians, 10th century Sumatrans and pre-Columbian Indians all
believed that crude oil had medicinal benefits. Marco Polo found it used in the
Caspian Sea region to treat camels for mange, and the first oil exported from
Venezuela in 1539 was intended as a gout treatment for the Holy Roman
Emperor Charles the fifth.

Right up until the early 1900s, mineral oil, a by-product of petroleum, was a
regular component found in “Snake Oil”, the infamous cure-all wonder
treatment. It was one of the less successful uses of petroleum.

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3 Other Uses

Notes:

Until the late 19th century, an oil find was often met with disinterest or dismay.

Pioneers who settled the American West dug wells to find water or brine; they
were disappointed when they struck oil.

Several historical factors changed that. The kerosene lamp, invented in 1854,
ultimately created the first large-scale demand for petroleum.

Kerosene was first made from coal, but by the late 1880s most was derived from
crude oil.

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4 Knowledge Check

Notes:

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Knowledge Check

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Chapter Two

1 Chapter Two

Notes:

Chapter Two, Birth of an Industry.

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2 The Modern Oil Industry

Notes:

The modern oil industry was born in 19th century America.

Whale oil had been used to light the streets but this was becoming increasingly
expensive as the whale population declined.

We already used oil from natural seeps for lighting.

It was not long before entrepreneurs began to actively search for oil.

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3 Col. Edwin Drake

Notes:

In 1859, at Titusville, Pennsylvania, Col. Edwin Drake drilled the first successful
well through rock and produced crude oil. Initially named “Drake’s Folly” by his
detractors, Drake was vindicated on the 28th of August when his driller, Billy
Smith, looked into the well in preparation for another day’s drilling and was
surprised to see crude oil rising up the well. Drake’s well produced 25 barrels a
day and he sold his “black gold” for $20 a barrel.

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4 Birth of the Motor Car

Notes:

When the internal combustion engine was patented in 1861, it changed

everything. From 1888, automobiles began to be manufactured in ever
increasing numbers. This increased the demand for gasoline or petrol.

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5 Spindletop

Notes:

The 1900s started with a crucial event in the history of the oil industry.

On January 10th, 1901, a well at Spindletop – a salt dome oil field located in
Beaumont, Texas – struck oil at eleven hundred and thirty nine feet, sending a
geyser of oil over one hundred and fifty feet into the air. Drilled by Captain
Anthony F. Lucas, Spindletop represented a major turning point for both Texas
and the entire nation, as no previously discovered oil field in the world had ever
been so productive.

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6 World War Two

Notes:

A number of conflicts in the early 20th century led nations to develop an

insatiable need for oil for power and lubrication.

Factories, steel making plants – you name it, everyone needed oil and its
derivatives.

By the 1940s, oil drilling had developed considerably. Development continued,

but at a slower pace.

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7 1950's Technology

Notes:

The 1950s saw significant developments, especially in the Gulf of Mexico.

Mobile offshore drilling units began to work there in water depths of up to 200
feet.

Technological developments continued, especially in respect to drill bits and

cements.

It soon became common practice for workers to be taken to and back from the
rigs by helicopter.

Gas and oil began to be produced offshore from the waters of the Gulf of Mexico.

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8 The Sixties

Notes:

Once the 1960s arrived, jet engines, cars, and the roads they drove on, created
an ever increasing demand for oil.

The refining processes were improved and the petrochemical industry began a
new era.

The sixties also saw an amazing new material enter the market; plastic. Plastics
were a revolutionary new product which everyone wanted.

The time for oil had come and nothing could stop it.

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9 1960s - Significant Events

Notes:

Some significant achievements and events happened during the 1960s;

including the first multi-platform complex in the US Gulf, and offshore diving
depths reaching 600 feet in 196

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10 Technological Advances of the 70s

Notes:

Technological developments continued at an increased rate, and exploration

drilling became much more scientific.

Technological advances were being made across the whole exploration and
production fields, from bits, drilling fluids, casing, cementing and BOP
equipment to MWD tools.

All these developments simply fuelled the rate of exploration.

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11 Increased Risk

Notes:

Developments in technology, different geographical areas, deeper wells and

deeper water all lead us to an increase in the risk of a major incident.

Most catastrophic oilfield exploration and production incidents cause not just
loss of life, but damage to the environment, bankruptcy, loss of jobs and loss of
company reputation.

In early 1969, Union Oil’s Platform A in the Dos Cuadras field blew-out. Within a
ten-day period, an estimated 80,000 to 100,00 barrels of crude oil spilled into
the Santa Barbara Channel, Southern California. At the time of the incident it
was the largest oil spill in US waters, and still ranks third after the Deepwater
Horizon and Exxon Valdez spills.

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12 Bad News

Notes:

In the late 1980s, the world focused on the energy industry as a number of major
incidents occurred. These were not all related to the exploration of oil and gas
but, significantly, there were three in the late 1980s.

An explosion and the subsequent fire at the Chernobyl nuclear facility on the
26th of April 1986, led to the world’s worst nuclear accident to date.

On the 6th of July 1988, an explosion and the resulting fire destroyed the Piper
Alpha production platform in the North Sea. As a result of the disaster, 167 men
lost their lives.

And in the March of 1989, the Exxon Valdez tanker spilled its contents after
running aground on the Bligh Reef in Prince William Sound. The accident
resulted in between 250,000 to 750,000 barrels of oil being spilled into the
Alaskan waters.

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13 Montara Blowout

Notes:

Located off the North coast of Australia, the Montara blowout started on the 21st
August 2009 and continued leaking for 74 days. It wasn’t until the 3rd of
November, on the fifth attempt, that the leak was finally plugged when
approximately 3,400 barrels of drilling mud was pumped into a relief well to stop
the leak.

Thankfully no lives were lost.

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14 Macondo Blowout

Notes:

The Macondo Blowout and associated oil spill, claimed eleven lives and is
considered the largest accidental marine oil spill in history.

Following an explosion on the Deepwater Horizon oil rig on the 20th April in 2010,
a sea floor oil gusher flowed for 87 days, before being capped and declared
sealed on the 19th September 2010.

The US Government estimated that 9 million barrels of oil had leaked into the
Gulf of Mexico, causing extensive damage to marine and wildlife habitats for
hundreds of miles of coastline.

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15 Knowledge Check

Notes:

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Knowledge Check

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Chapter Three

1 Chapter Three

Notes:

Chapter Three, Geology - Rocks and How they are Formed.

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2 Why is Geology Important?

Notes:

Geology, derived from the Greek words for ‘Earth’ and ‘study’, is the science of
the solid Earth and the processes by which it has been shaped and developed
throughout billions of years.

Petroleum geologists study various geological elements and tell us whether

there is a likelihood of hydrocarbons being present and at what volume.

Drilling a test well can cost millions of dollars, so the geologist needs to be sure
of the facts before exploratory drilling is conducted.

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3 Planet Earth

Notes:

The planet Earth is made up of four main layers; the crust, the mantle, the outer
core and the inner core. The pressure and temperature alters massively for each
layer.
The Crust: is formed out of rock materials and is the thinnest of the four layers.
The crust makes up approximately one percent of the Earth.

The Mantle: is the thickest layer. Approximately eighty percent of the Earth lies in
the mantle. The temperature of this layer is estimated to be about 1,000 degrees
Celsius.

The Outer Core: measures 2,200 kilometres in thickness and can be regarded as
a ball of very hot metals. As the Earth rotates, the outer core (consisting of iron)
spins over the inner core and generates the Earth's magnetic field. This factor is
responsible for the functioning of magnetic compasses.

The Inner Core: has an extremely high temperature and pressure condition. The
temperature of the inner core layer is greater than the temperature of the sun's

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surface. The thickness of this layer is believed to be approximately 1,250
kilometres.

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4 Tectonic Plates

Notes:

In order to better understand how the Earth has been shaped over the ages, we
must also consider the Earth’s crust. The Earth’s crust is made up of a series of
rigid plates. The plates form the Earth’s surface and float on the mantle, and are
known as tectonic plates.

Movement of these plates, both towards and away from each other, has caused
and continues to cause the major geological features of the Earth’s surface,
such as Mountains, Valleys and Oceans.

Tectonic plate movement is most likely caused by convection currents from the
molten rock below. The molten rocks are like water boiling in a pan, constantly
moving and bubbling, with the hottest liquids rising to the top and the coolest
moving to the bottom.

Friction between the tectonic plates stops them constantly moving. However,
over time, pressure builds up and when the pressure becomes too much, the

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plates move, resulting in a volcano or an earthquake.

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5 To Reach the Centre of the Earth

Notes:

The Earth is around six point four million metres in radius or 21 million feet. The
deepest wells currently drilled are over 11,600 metres, straight towards the
Earth's centre.

It would take approximately 550 of these deep wells, drilled consecutively, to

reach the Earth's centre!

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6 Rock Cycle

Notes:

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7 Knowledge Check

Notes:

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Knowledge Check

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Chapter Four

1 Chapter Four

Notes:

Chapter Four, Hydrocarbons and Where they are Found.

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2 How do Hydrocarbons Form?

Notes:

The deposition of sediment is very important when considering how

hydrocarbons form. When organic debris, such as decaying plant life, sea
creatures, animals or plankton, is deposited into rivers, streams or oceans, it
becomes trapped in layers of sediment, which compact over time and form
sedimentary rocks.

As the type of sediment deposited changes, layers and layers of different types
of sedimentary rock form. As the compacted organic material is now far away
from any oxygen and moving closer to hot magma, it gets more and more
compressed and heated over time. This heat and pressure then cooks and
transforms the organic material, into what we now know as hydrocarbons.

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3 How do the Various Types of Hydrocarbons Form?

Notes:

Under pressure from the huge weight of rocks above, along with the intense heat
from its close proximity to magma, the transformation process starts. Over 3
million to 300 million years, if conditions are right, the carbon material in the
rocks transforms into hydrocarbons.

If the temperature is too high, the material will carbonise and there will be
nothing left at the end of the cooking period. Hot, but not too hot and gas will
form. Whereas, if the conditions are slightly cooler, oil will form. The cooler the
cooking temperature of the materials, the thicker the oil.

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4 How do Hydrocarbons Accumulate?

Notes:

So how do hydrocarbons accumulate in such large amounts? Well, the answer is

migration.

Oil is lighter than water so as we know it will float to the surface. Gas is lighter
than oil so the natural tendency is for hydrocarbons to migrate towards the
surface of the Earth.

They will continue to do this until they are stopped and as we have seen this
requires an impermeable structural trap.

These traps are formed by Earth movements, and may be domes (or anticlines)
and faults amongst others.

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5 Trapped Hydrocarbons

Notes:

Some hydrocarbons find their way to the surface, seeping out of the Earth, but
most hydrocarbons become trapped in accumulation sites.

So, why do hydrocarbons become trapped?

This is due to layers of impermeable rocks such as shales. These impermeable

rocks act as cap rocks preventing the hydrocarbons from further migration. As
the hydrocarbons build up, they form an accumulation. The areas the
hydrocarbons accumulate in are known as reservoirs.

Within reservoirs, we usually find gas at the top, oil underneath and water at the
very bottom.

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6 Porosity and Permeability

Notes:

So what is meant by porous and permeable rocks?

Porosity and permeability are two of the main features that control the
movement and storage of fluids in rocks and sediments.

The porosity of a rock is determined by the spaces, or pores, between the

individual grains that make up the rock. The more tightly packed these grains are,
the lower the porosity of the rock.

The permeability of a rock measures the ease with which fluids can flow though
the rock.

Most reservoir rocks are both porous and permeable, as they allow
hydrocarbons to collect inside them (porosity), and to pass through them
(permeability).

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We will now take a closer look at each of these features.

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7 Porosity

Notes:

A piece of sandstone or limestone is very much like a hard sponge. If you took a
domestic sponge and soaked it in water, the porosity of the sponge is the volume
of water the sponge is able to soak up. Rocks bearing hydrocarbons hold the
hydrocarbon fluids within the rock in the same way the sponge holds the water.
The rock’s porosity traps the oil inside.

In sedimentary rocks, the porosity depends on grain size, the shapes of the
grains, and the degree of sorting and cementation.

Let’s now take a closer look at permeability.

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8 Permeability

Notes:

It is possible for a rock to be extremely porous, and yet nearly impermeable. This
occurs when the pores in-between the grains are not interconnected. The fluid
then becomes trapped within individual pores and cannot pass through or
connect to adjacent pores.

Pumice or shale are examples of this type of rock. They have a high porosity, yet
due to poorly inter-connecting pores, some can be almost impermeable.

In contrast, some sandstones can be both highly porous and highly permeable.
This is due to the well-rounded sand grains, which provide unrestricted pore
space between grains. The pores are free from smaller grains and are very well
linked. Consequently, sandstones of this type have both high porosity and high
permeability.

Let’s have a look at some rock types to show you an example.

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9 Porosity and Permeability of Different Rocks

Notes:

Igneous Rocks are usually crystalline; this type of rock has almost zero porosity
and permeability because there are no real gaps between the crystals.

Shale is a good example of rock with high porosity and low permeability. High
porosity due to the pore space between the individual layers of clay minerals,
but low permeability because few, if any of the pore spaces are interconnected.
This also makes Shale an excellent seal or cap rock for reservoirs.

Sandstone, as previously mentioned, can have both high porosity and high
permeability; this is the case if the individual grains are well rounded with plenty
of space between them and the pores are well connected.

Limestone will also typically have high porosity and high permeability. However
unlike sandstone it is also very soluble, meaning it can dissolve in water much
more easily than other types of rock. This is yet another way limestone achieves
high permeability and porosity. Water can expand the cracks and fractures

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already within the rock.

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10 Porosity and Permeability of Different Rocks

Notes:

Place your cursor over the images to see each rock in microscopic detail.

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11 Knowledge Check

Notes:

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Knowledge Check

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Chapter Five

1 Chapter Five

Notes:

Chapter Five, Geology and the Petroleum Industry.

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2 Geological Features

Notes:

Geologists will look at four general geological features when looking for
hydrocarbons: source rocks, trapping structures, reservoir rocks and seal rocks,
or as they are more commonly known in the petroleum industry - cap rocks.

Source rocks are the sedimentary rocks, typically shale or limestone, which
contain the organic carbon material that will generate petroleum under the right
conditions.

The hydrocarbons, once formed in the source rock, will usually migrate upwards
through other porous and permeable rocks.

The hydrocarbons stop this migration once they reach a cap rock, this is known
as a structural trap, under which the hydrocarbons accumulate. Geologists
search for these structural traps.

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Within the structural traps, porous and permeable rocks, usually sandstone or
limestone, form the reservoir.

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3 What Petroleum Geologists are Looking For

Notes:

The geologists will look for the sedimentary source rocks where hydrocarbons
could have formed.

They will look for possible reservoirs or traps in the rock layers above, where
hydrocarbons could have accumulated and then they will analyse, as best they
can, the various rock layers to determine their likely porosity and permeability.

This will help them to determine the likelihood of hydrocarbons being stored
within the rock layers, as well as how easy or difficult the hydrocarbons will be to
extract.

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4 Knowledge Check

Notes:

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Knowledge Check

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Chapter Six

1 Chapter Six

Notes:

Chapter Six, Exploration for Hydrocarbons.

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2 How do we Locate Hydrocarbons?

Notes:

We now know the type of rocks we are looking for. So, we need to find a
structural trap.

There are a number of ways that we can map the subsurface structure of the
Earth. The most important is the seismic survey.

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3 How do we Locate Hydrocarbons?

Notes:

In the very early days, when oil could be found near or sometimes even above
the surface, it was quite simple to drill a shallow well, which would pierce the
reservoir and allow the hydrocarbons to flow to the surface.

Nowadays we need to look deeper for hydrocarbon accumulations, and in order

to save time and money on endless exploratory drilling, we use scientific
methods and techniques to look deep into the Earth’s layers of rock.

Looking at the surface of the Earth, geologists can tell quite a lot about the rocks
that lie beneath. Using aerial photographs and satellite images, even more
information can be gathered.

But the most accurate and detailed geological survey which can lead to the
extraction of oil, is a seismic survey.

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4 Seismic Data

Notes:

Seismic surveys are used to map the underground structure of rock formations.
Geologists interpret the seismic data in order to locate structural traps that
could potentially contain hydrocarbons.

So how does it work? The general principle is to send sound waves into the Earth.
As the sound waves reach each type of rock formation, the flow of the wave is
impeded, the wave literally bounces off the rock.

The reflected wave is then recorded using ultrasensitive devices called

geophones and hydrophones.

The recorded waves are then converted into electrical impulses, which are then
used to build up an image of the underground rock formations.

Petroleum geologists then interpret this data, to determine rock structures and

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ultimately to locate oil and gas reservoirs.

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5 Interpreting Seismic Data

Notes:

As computers have developed over the years, the ability to interpret seismic data
has increased. The complexity of the seismic tools have also increased, allowing
us to send more complex patterns into the rocks and collect more and better
data. The overall result is that the images we are able to create from the data are
getting better and more accurate.

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6 Seismic Survey Results

Notes:

Once the development company has the results from the seismic survey
detailing the structure beneath the surface, the only way we can absolutely
prove the presence of hydrocarbons is to drill.

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7 Knowledge Check

Notes:

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Knowledge Check

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Conclusion

1 Module Conclusion

Notes:

Well done, you have reached the end of this module. You should now be able to:

Recall some of the early uses of crude oil,

Outline the origins and growth of the oil industry,
Recognise significant well control events and technological developments,
Describe why geology is important to the petroleum industry,
Explain how hydrocarbons are formed,
Describe where hydrocarbons are found, and
Identify different methods for finding oil and gas.

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2 Final Exam

Notes:

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3 Final Exam Intro

Notes:

It is now time to take the final exam, where a pass mark of 70% needs to be
achieved.

Take your time, and only click the 'Submit All' button when you are happy with
your answers.

If you fail, you will be able to re-sit the exam.

You are advised to review the module before doing so.

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Final Exam

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Thank You

Notes:

Thank you for completing this training module, we hope this will help you in your
workplace.
Remember, you can revisit this module at any time to refresh your knowledge.

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