petrofirst - upes freshmen orientation + spe alp

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PetroFirs t Oil & Gas Industry: Buckle Up, turbulence ahead!

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This presentation was done on 27th Sept 2012 at University of Petroleum & Energy Studies as part of their Freshmen Orientation and SPE Ambassador Lecture Program

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Page 1: PetroFirst - UPES Freshmen Orientation + SPE ALP

PetroFirst

Oil & Gas Industry: Buckle Up, turbulence ahead!

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Content Oil & Gas – Introduction The Industry Timeline Oil & Gas – India Outlook A Career in Oil & Gas Industry SPE – Valuable Resource for Students & YP

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Did you know…?

By the time you read this, 8000 barrels of oil will have disappeared - forever

Oil and gas isn’t found in caves underground, but in teeny-tiny holes of

sandstone rocks (mainly)

Oil ‘fields’ can easily be hundreds sq. km, and found thousand of meters deep

An average oil well is about the diameter of a drinking glass

Most of the oil we find today was created about a 100 million years ago

More than 99% of the oil ever formed has escaped and is gone forever

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Where did it come from?

?27-09-2012

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Where did it come from?

?27-09-2012

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Where did it come from?

?At least that’s what everyone thought for a really long time….27-09-2012

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Where did it come from?

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A few kilometers

The ‘Cooker’

Where did it come from?

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PetroFirst 9The ‘Sandwich’

Where did it come from?

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PetroFirst 10The ‘Sandwich’

Where did it come from?

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$$ …IF we can find it!

What does it look like?

Gas Oil

Water

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How do we find it?

Gravity Surveys

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How do we find it?

Magnetic Surveys

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How do we find it?

Shooting Seismic

Drill here!

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How do we find it?

Bad luck! Bad luck! Woo Hoo!

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About 1 in every 3 exploration wells is successful

If it is successful, then the following questions remain…

How big is this find…really? Do we invest in developing it?

How many wells should we drill? What kind of wells?

This field is in the middle of nowhere (they always are!) –

how do I get the oil to the customer?

What Next?

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Development & Production

1. Onshore well 5. Floating, single point mooring

2. Fixed, multi platform 6. Storage/shuttle tanker

3. Fixed, self-contained platform 7. Floating, tension leg

4. Self-contained, concrete gravity platform 8. Subsea manifolds27-09-2012

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Oil Refining – Cracking!

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Oil Refining – Cracking!

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Marketable Products

44%• Gasoline (Used to fuel cars)

19%• Heating Oil (Used to heat buildings) and Diesel Fuel

15%• Petrochemical feedstock for the manufacturing of chemicals, synthetic rubber

and plastics

8%• Jet Fuel

6%• Propane

5%• Residual Fuel Oil (powering factories, fueling large ships, and making

electricity)

3%• Asphalt

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The Industry Timeline

The story of oil & natural gas begins far back in time as long as 500 million years back!

Commercial extraction and production is a little over 150 years old! 27-09-2012

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Oil Through Ages

As early in 347 A.D. , Chinese were known to drill wells upto 800 ft. using bronze bit and bamboo polesIn 1264 Marco Polo witnessed the mining of seep oil at BakuIn 1500s seep oil mining in Carpathian Mountains of PolandHand dug mines up to 35 meters for oil at Baku in 15941735 marked by oil sand mining and extraction at Pechelbronn field in Alsace, France1802 – 1815 sees oil being produced as undesirable by – product from brine wells in United States

In 1802 in West Verginia Ruffner brothers took 18 months to drill a 58 ft. brine well

Asansol, India27-09-2012

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Ateshkah, Azerbaijan

Asansol, India27-09-2012

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Early Age of Modern Drilling

1848 was marked with first modern oil well in Aspheron Peninsula (North East of

Baku)

1854 saw first oil well in Europe at Bobrka, Poland

North America saw its first oil well in 1858 in Ontario, Canada

First Well in United States in Titusville, Pennsylvania in 1859

The Famous Drake well – publicized as first oil well

Till now all of the wells were either hand dug or percussion drilled!

Do you know? – Colonel Edwin Drake never worked in Military, he was a terminated

railroad conductor! 27-09-2012

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What did they do with it?

Chinese had found some medicinal usage of it

1500s to early 1800s, mostly used to light lamps/ street lamps

In 1849 Kerosene turned up as first distilled product of Crude Oil

Kerosene replaced Whale Oil as most preferred illuminant and created a

market for crude oil

Gasoline/Petrol was just a cheap by product of distillation process!

In 1850s crude was sold in US as a ‘cure – all medicine’ – Seneca

Oil

In 1857 Kerosene lamp was invented establishing a market for crude

oil 27-09-2012

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The Wizard of Menlo Park disappeared crude market !

Thomas Alva Edison pushed Crude out of demand in 1879!

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Karl Benz – The Redeemer

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The Race Begins!

Russian eminence in early 20th Century curtailed by political

turmoil

Mexico held a lead position till Queretaro Convention in 1917

Venezuela gauged situation better and came up

Wells were spurting every where in United States

Middle East came in with its huge resources

Multinationals were formed – Europe though a deficit zone

received its daily doze

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Seven Sisters

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Post World Wars

MNC Dominance continues – managed 100% of oil production and owned

80% of middle east output!

Demand reaches unprecedented heights

USA sees decline in production & begins import for the first time

Middle East production soars to new heights – Kuwait sees a boom!

Soviet Union witnesses a boom in 1950

Closing of Suez Canal in 1956 sees commencement of Africa – Algeria &

Libya become major exporters

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Technology Timeline

1896 First Offshore Well

1900s Mudding & Rotary Drilling

1910s Well Construction Methods

1920s Logging, Wireline & Testing

1930s Blowout Prevention Equipment & Seismic Exploration

1940s Platforming & ‘Out of Sight’ Offshore Drilling

Technology

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Rise of Service Companies

(as Oil Center Tool in 1927)

Weatherford Oil Well Tool Company (WOTCO)27-09-2012

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OPEC – The Lord of The Oil

Organization of Petroleum Exporting Countries (OPEC) was formed in a conference at Baghdad in 1960Founding members were: Iran, Iraq, Kuwait, Saudi Arabia & VenezuelaOPEC looked at earning more profit for itself from MNCsOPEC currently comprises of members with Qatar (1961), Indonesia (1962), Libya (1962), UAE(1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) & Angola (2007)Oil Industry nationalization bid started in Middle East in 1970s

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The Infamous Embargo

In 1973 Gulf States met in Kuwait and Arab Oil Embargo begins

A ban was imposed on export to USA, Canada & Netherlands

Price was raised by 70% and production was cut

Power shift was happening from MNCs to OPEC!

MNCs tried to thwart the impact by redirecting oil from other

resources

Actions lead to hastening of nationalization

Saudi Arabia did not nationalize at that time

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Rise of NOCs

Russia

Iran

Brazil

Malaysia

Venezuela

China

Saudi Arabia

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Rise of NOCs

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In The New Millennium

Through rough weathers and political turmoil

Unprecedented Consumptions and Demand

Technology Boom!

Offshore conquered

Liquid to Gaseous fuel shift

Attention to unconventional resources

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Demand & Supply

EIA’

s Int

erna

tiona

l Ene

rgy

Out

look

201

2

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Demand & Supply

EIA’

s Int

erna

tiona

l Ene

rgy

Out

look

201

2

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Demand & Supply

EIA’

s Int

erna

tiona

l Ene

rgy

Out

look

201

2

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How bright is the future?

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The Elephant Walk – India Outlook

According to Oil & Gas Journal (OGJ), India had approximately 5.7 billion barrels of proven oil reserves as of January 2011, the second-largest amount in the Asia-Pacific region after China.

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Grim News..

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Beg – Borrow – Steal!

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Don’t worry, Be happy!

Coal Bed Methane (CBM)• CBM policy in 1997 to boost development• Policy designed to be liberal and investor friendly• First commercial production in July 2007 at about 7200 cubic meters a day • Development of CBM field in Damodar Valley, Sohagpur and Tanjavur

Underground Coal Gassification (UCG)• Technology first used in US in 1800s and in India in early 1900s• Only feasible technology available to harness energy from deep unminable coal seems• Reduces capital outlay, operating cost and output gas expenses by 25 – 50 per cent compared

to surface gassification

Gas Hydrates and Bio – Fuels

• National Gas Hydrate Programme (NGHP), a consortium of national E & P companies and research institutions, to map gas hydrates for use as an alternate source of energy

• Bio – fuels (bio – ethanol and bio – diesel) are alternate sources of energy from domestic renewable resources; these have lower emissions compared to petroleum or diesel

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Opportunities!

Upstream Segment• Locating new fields for

exploration; 78% of the country sedimentary area is yet to be explored

• Development of unconventional resources; CBM fields in the deep sea

• Opportunities for brown/mature field development

• Increased demand for skilled labour and oilfield services and equipment

Midstream Segment• Expansion in the

transmission network of gas pipelines

• LNG imports have increased significantly; provides an opportunity to boost production capacity

• In light of mounting LNG production, huge opportunity lies for LNG terminal operation, engineering, procurement and construction services

Downstream Segment

• Development in city gas distribution (CGD) networks, which are similar to Delhi and Mumbai CGDs

• To construct new refineries considering advantages such as low operation costs, lesser freight charges and favourable prices

• Expansion of the country’s petroleum product distribution network

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Growth Drivers

Growing Demand

India is fifth largest energy

consumer

Rise in population and

economic growth fuel demand

Increase industrialization and usage of gas

Policy Support

Supportive FDI policies

Promotion of investments in

the factor

Introducing policies such as CBM and NELP

Increasing Investment

FDI grew 111% in 2011

Cumulative FDI in oil & gas totalled USD 3,159 million

Huge investments

planned under Eleventh Plan

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Major Players!

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Career in Oil & Gas Industry

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Core Industry

Upstream

Midstream

Downstream

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Who is a Petroleum Engineer?

Petroleum engineering requires a good knowledge of many other related disciplines, such as:

Reservoir EngineerProduction EngineerDrilling Engineer

Geology & Geophysics Drilling Engineering

Formation Evaluation Artificial lift systems

Reservoir simulation Oil & gas facilities engineering

Well engineering Economics

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Hard Work & The Money Sack

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Hard Work & The Money Sack

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What employer wants?

Analytical & Innovative

Dynamic and Eloquent

Purist – Detailist – Applicationist

Hard Working & Adaptable

Salesman of the year!

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Profile Management

Only marks won’t help!

Employer hires an Engineer not a Student!

Set yourself apart!

Show your character – Prove your mettle!

Back your words with your act!

Work from now!

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Go Global

You are in a highly globalized industry

Your employer could be sitting in any corner of the world

And so is your competition

Go out & get an idea of your battlefield

Network – Network – Network!

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Society of Petroleum Engineers Valuable Resource for Students & YP

SPE (Young Professional) Mumbai Chapter

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SPE Membership – Did you know?

Total Members: 104,000+

Average Age (Over past 3 years): 46

YP Members (i.e. < 35): 20,000+

Student Members: 29,000+

<20 20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65++

* n/a

0.00%

5.00%

10.00%

15.00%

20.00% Membership by Age Range

Age Range

Perc

enta

ge o

f Tot

al

Mem

bers

hip

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What is in it for you?

For Students For YPsStudent Chapters Local Section YP Programs

Scholarships YP AwardsAmbassador Lecture ProgramYoung Professional Network

OnePetroThe Way Ahead & JPT Online The Way Ahead & JPT

Student Paper Contests YP WorkshopsStudent Development Committee YP Coordinating Committee

eMentoring

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Did it help me?

Ofcourse it did!

World of opportunities!

Resources and more resources!

A peek of real competition!

Rubbing shoulders with who’s who!

SPE as a differentiator!

Never lose the link!

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Should you join ?

It’s free!…Student membership is industry fundedIt provides direct link to the industry

MentorsPotential EmployersTechnical Resources and Masters topicsScholarshipsNetworking

Expand your horizonsImprove your leadership skillsPlay your part in addressing global issues

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We Need You!

Deliver energy to the world

Be the helping hand & guiding eye

Find ways to produce and use hydrocarbons

more efficiently

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Thanks for being a wonderful audience!

BEST OF LUCK FOR YEARS AHEAD !

Neelendra NathPetroFirst Solutions

[email protected] +91 9510 228 545

PetroFirst

27-09-2012