the awl bidness larry w. lake petroleum and geosystems engineering the university of texas
TRANSCRIPT
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The Awl BidnessLarry W. Lake
Petroleum and Geosystems Engineering
The University of Texas
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The Oil Business
• Exploration
• Production
• Refining
• Transportation
• Marketing
Larry W. Lake
Petroleum and Geosystems Engineering
The University of Texas
Upstream
Downstream
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A Brief Quiz…
1. What is the usual unit for a quantity of
crude oil?
2. What is the usual unit for a quantity of
natural gas?
3. How much crude oil goes into making
gasoline?
4. How much of your gasoline bill pays
for the crude oil?
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A Brief Quiz (cont.)…
5. When was oil first discovered in
commercial quantities?
6. Name a transportation fuel that is not
hydrocarbon based.
7. What is the largest reservoir in the U.S.?
In the world?
8. When will we run out of oil?
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Exploration…
Seal or trap
Water column or aquifer
Oil column
Gas cap
Source rock
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Seismic
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Onshore Seismic…
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Offshore Seismic…
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Offshore Receiver Spreads…
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Production…
Productivity Index, PI
DrivingForce
qo =4khkro
4ACArw
2( )ln + 2s[ ]o
(P – Pwf)
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Production…
Oil Rate - make as large as possible
Goal of everything we do
qo =4khkro
4ACArw
2( )ln + 2s[ ]o
(P – Pwf)
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Production…
Constants - Live with them
qo =4khkro
4ACArw
2( )ln + 2s[ ]o
(P – Pwf)
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Production…
Natural logarithm - makes a large number small
For example, ln(1000) = 6.9
Natural logarithm
qo =4khkro
4ACArw
2( )ln + 2s[ ]o
(P – Pwf)
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qo =4khkro
4ACArw
2( )ln + 2s[ ]o
(P – Pwf)
Production…
• Make large
• God provides or doesn't
• Fracturing
Permeability - basic property of rocks
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qo =4khkro
4ACArw
2( )ln + 2s[ ]o
(P – Pwf)
Production…
• Make small
• Lift with gas
• Pump (reduce fluid level)
Well pressure
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qo =4khkro
4ACArw
2( )ln + 2s[ ]o
(P – Pwf)
Production…
• Make large
• Reinject produced gas
• Inject water (waterflood)
Average reservoir pressure
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Production…
• Make large• God provides, etc.• Reperforating• Horizontal wells
qo =4khkro
4ACArw
2( )ln + 2s[ ]o
(P – Pwf)
Penetrated thickness
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Horizontal Wells….
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Aggie Drilling Engineer
From A.D. Hill
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qo =4khkro
4ACArw
2( )ln + 2s[ ]o
(P – Pwf)
Production…
• Make large
• Large oil content
• Inject chemicals, CO2
Oil relative permeability
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Schematic of solvent flood
Drawing by Joe Lindley, U.S. Department of Energy, Bartlesville, OK
Fig. 7-1
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Typical Micellar-Polymer Flood...
Low salinityLow calciumUsually 0.5 PV
SurfactantCo-surfactantCo-solventPolymerOil (sometimes)Usually 0.1 PV
PolymerAdditives
Gradual change to water
Fig. 9-1
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Production…
• Make small
• Inject heat (steam)
• Burn a little oil
Oil viscosity
qo =4khkro
4ACArw
2( )ln + 2s[ ]o
(P – Pwf)
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Process variations…
Driving the Oil...Steam Drive
Steam Oil + Water
Steam Water Cold Oil
ColdOil
ColdOil
Steam
Inject(2-30 days)
Steam
Coldoil
ColdOil
HotWater
Soak(5-30 days)
Shut in
Coldoil
ColdOil
HotWater
Produce(1-6 months)
Oil + Water
Steam soak
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More variations...
Burning the Oil
Using horizontal wells (SAGD)
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In-Situ Conversion Process (ICP)
Perspect
ive V
iew
¢
Producer
HeaterHeater
High Temperature Causes Long, Horizontal Fractures
Overburden
• NaphthaNaphtha• JetJet• DieselDiesel• Nat. GasNat. Gas• HydrogenHydrogen• Chem. FeedChem. Feed• HeatHeat
High Value Products
What is it? • Enhancement of natural maturation of kerogen by slow heating• Results in:
• thermal cracking • in-situ hydrogenation• high sweep vapor phase production • high API oil• N,S,O content vary with resource
• Average temperature limited to boiling point of diesel, i.e. essentially no bottoms
Current target resources:• Oil Shale • Heavy Oil / Tar Sands• Coal
How is it done?• Electric resistance or, potentially, gas heaters• Underground conductive heat transport
Light Processing
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4Shell Unconventional Resource Energy - White House Briefing April 11th, 2005 filename.pptSURE
Freezewall Technology For Groundwater Isolation
Water &TemperatureMonitor Wells
FreezeWells
Heater &Producer
Wells
NaturalFracturedShaleAquifers
SolidShale
Water &TemperatureMonitor Wells
FreezeWells
Heater &Producer
Wells
Water &TemperatureMonitor Wells
FreezeWells
Heater &Producer
Wells
NaturalFracturedShaleAquifers
SolidShale
Next Research Phase2 Step Process (at least) to Commercial
Freezewall Test• Football field sized test on 10 acres
near existing research
• Test robustness of freezewall barrier
• Active construction/production from late ’05 – early ’07
• Reclamation 2010
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Ice Wall on Surface
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Production…
• Make small
• Fracture well
• Inject acid
Well damage (skin factor)
qo =4khkro
4ACArw
2( )ln + 2s[ ]o
(P – Pwf)
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Results of Quiz…
1. What is the usual unit for a quantity of
crude oil?
• 1 barrel = 1 bbl = 42 U.S. gallons
• 1+6 zeros = 1 MMbbl
• 1+9 zeros = 1 Bbbl
• 1 metric ton = 7.5 barrels
• Giant field: 100 MMbbl = 0.1 Bbbl
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Results of Quiz…
2. What is the usual unit for a quantity of
natural gas?
• 1000 standard cubic feet = 1 MCF
• 1 MCF+6 zeros = 1 BCF
• 1 MCF+9 zeros = 1 TCF
• Roughly: 6 MCF gas = 1 Bbl crude
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Cost of gas= 0.405 $/Ccf
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Results of Quiz…
3. How much crude oil goes into making gasoline?
• Crude oil = transportation
Transportation
Residential/Commercial
Industrial
ElectricityGeneration & Transmission
Non-Fuel
Waste = 25 %
Waste = 20 %
Waste = 83 %
Waste = 68 %
Work Achieved
Work Achieved
Work Achieved
Work Achieved
23 %
15 %
23 %
39 %
Coal
NaturalGas
Nuclear
Petroleum
HydroOther
Source: LLNL/DOE
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Results of the Quiz…
(American Petroleum Institute, Sept. 2008)
4. How much of your gasoline bill pays for the crude oil?
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Results of Quiz…
5. When was oil first discovered in
commercial quantities?
• Drake’s Folly …1859
• Corsicana …1894
• Spindletop …1901
• Big Lake (Permian) …1923
• East Texas …1928
Texas
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Results of Quiz…
6. Name a transportation fuel that is not
hydrocarbon based.
• Wind
• Solar
• Hydrogen (fuel cells)
• Coal
• Muscles
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Results of Quiz…
7. What is the largest reservoir in the U.S.?
Prudhoe Bay, Alaska – 20+ Bbbls in
place
In the world?
Ghawar, Saudi Arabia – 300+ Bbbls
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Results of Quiz…
8. When will we run out of oil?
USGS Est. of Ultimate Rec
UR B-BblsProbability
Low (95%)
Mean (Expected Value)
High (5%)
2,248
3,003
3,896
2026
2037
2047
2% Growth
DeclineR/P = 10
History
Mean
Low (95%)
High (5%)
70
60
50
40
30
20
10
0
Bill
ion
Bar
rels
per
Yea
r
1900 1925 1950 1975 2000 2025 2050 2075 2100 2125
Campbell-Laherrere World Oil Production Estimates, 1930-2050
2005 2037
EIA- DOE Estimates, 1900--2125
2005
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When will we run out of oil?
From Jackson (JPT, 2007)
Undulating Plateau vs. Peak Oil
U.S. Production, Hubbert vs. Actual
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Major Points…
• Hydrocarbons found in porous rocks
• Crude oil = transportation
• Crude oil is about 70% of gasoline price
• Hydrocarbons essential to current way of
life
• World has a 30+ year supply; delivery rate
a question
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Hydrocarbons and Prosperity…
100
1,000
10,000
100,000
0.0001 0.001 0.01 0.1 1 10 100 1000
Per Capita Hydrocarbon Consumption, BOE/day
Pe
r C
ap
ita
Gro
ss
Do
mes
tic P
rod
uc
t, U
S $
AfricaAsiaCentral America/CaribbeanEuropeMiddle EastNorth AmericaOceaniaSouth AmericaSoutheast AsiaWorld
Prosperity
Consumption
USA
Trinidad and Tobago
Luxembourg
Chad
Zimbabwe
Source: CIA World Factbook (Feb. 2009)
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For More Information…
• U.S. Energy Information Administration
• American Petroleum Institute
• International Energy Agency
• California Division of Oil and Gas
• Early Texas Oil (Rundell)
• www.factsonfuel.org/gasoline
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Chemical EOR Processes...
Process Typical Typical AgentRecovery (%) Utilization
Polymer 5 1/3-1/2 lb polymer/bbl oil produced
Micellar/ 15 15-25 lb surfactantpolymer bbl oil produced
Alkaline/ 5 35-45 lb chemicalpolymer bbl oil produced
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US CO2 Emissions by Sector and Fuels 2000
Millions of metric tons per year carbon equivalent
Source: U.S. EPA Inventory of Greenhouse Gas Emissions, April 2002
0
100
200
300
400
500
600
700
Residential Commercial Industrial Transportation ElectricGeneration
Natural Gas
Petroleum
Coal
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Solvent EOR Processes...
ProcessUlt. Recovery
% OOIPUtilization
Miscible 10-15 10 MCF/bbl
Immiscible 5-10 10 MCF/bbl
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Results of Quiz…
4. How much of your gasoline bill pays for the crude oil?
Expense ¢ per gallon
Production 15-60
Producer profit 53-58
Refining 13
Marketing 5
Transportation 15
Retailer 6
Refining etc. profit
10
US taxes 19
Ave. state taxes 23
Total 159
1$ change in crude price causes 2.5¢ change in gasoline price
www.factsonfuel.org/gasoline
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Thermal Recovery Processes...
Process Ult. Recovery
% OOIP
Utilization
Steam (drive
and soak)
50-65 0.5 bbl /bbl equivalent
Combustion 10-15 10 MCF air/bbl
SAGD ?? ??
Various EM Like steam Like steam
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Undulating Plateau vs. Peak Oil
From Jackson (JPT, 2007)