Chapter 1

Characteristics and Historical Events

1.1 What Is Petroleum?

There are several ways to answer this question:

In appearance, petroleum is a naturally occurring liquid found beneath the Earth’s
surface. Petroleum liquid usually is associated with reservoir gas. Together, they are
also known as crude oil and natural gas, or simply oil and gas. Some crude oils are
as clear as vegetable oils. Others are green, brown, or black. Some flow freely like
water. Others are viscous and don’t flow at all unless they are heated. Some are solid
and are recovered by mining. Tar sand, for example, is a solid combination of clay,
sand, water, and bitumen (heavy black viscous oil). These characteristics vary with
location, depth, and age of the field.
The English word “petroleum” means “rock oil” or “oil from stone,” which is
derived from the Greek pétra, meaning “rock”, and oleum, meaning “oil.” In Chinese,
the characters for petroleum are 石油, pronounced shi-yóu which also means “stone
(rock) oil”.
In composition, petroleum is a complex mixture of countless organic molecules
derived from ancient living organisms. The molecules are mostly hydrocarbons,
including lesser amounts of heteroatom-containing hydrocarbons, contaminated with
various amounts of inorganic matter.
Geologically, petroleum is a fossil hydrocarbon associated with certain geological
formations, related more or less to natural gas, bitumen from oil sands or tar sands,
kerogen from shale, and coal. The word “petroleum” refers to the liquid form, or
“crude oil”, but often includes natural gas and bitumen.
Economically and politically, petroleum liquid (crude oil) is an important energy
(and material) source. In 2017, it accounted for 34.2% of world energy consumption,
as shown in Fig. 1.1 [1]. Its close cousin, petroleum gas (natural gas), accounted for
23.4%. For energy production, the third most important fossil hydrocarbon is coal
(27.6%). In additional to serving as our primary source of liquid fuels, petroleum
is a raw material from which we produce: lubricants, petrochemicals, construction
materials, and thousands of consumer products.

© Springer Nature Switzerland AG 2019 3

C. S. Hsu and P. R. Robinson, Petroleum Science and Technology,
https://doi.org/10.1007/978-3-030-16275-7_1
4 1 Characteristics and Historical Events

Fig. 1.1 World Energy

Consumption by
Source—2017 [1]

1.2 Fossil Hydrocarbons (Fossil Fuels)

When discussing petroleum, it is useful to introduce other fossil hydrocarbons, also

known as fossil fuels. These valuable resources appear in many forms which are
described below.

1.2.1 Natural Gas

Natural gas in reservoirs contains mostly methane (CH4 ). Like crude oil, the origin
of natural gas is biological, and oil and gas are formed by the same natural forces.
Hence, most (but not all) petroleum reservoirs contain both oil and gas. We commonly
talk about “oil and gas” together. As ancient biomass is transformed into fossil
hydrocarbons, different oil- and gas-generation windows correspond to different
residence time at different depths. Methane is formed when liquid petroleum is
“over-matured” due to excess thermal stress in deep formations.
Methane can also be formed from the anaerobic decomposition of natural wet-
lands, rice paddies, emissions from livestock, organic wastes in landfills and biomass
burning (forest fires, charcoal combustion, etc.), as biogenic methane. The radioac-
tive carbon isotope, 14 C, is present in biogenic methane, but absent in fossil methane
in natural gas.
Natural gas that contains only traces of other compounds is dry gas. If natural gas
contains significant amounts of ethane, propane, butanes, and higher hydrocarbons,
it is called wet gas. The heavier components can be recovered individually or as con-
densate or natural gas liquid (NGL) in natural gas processing plants. Natural gasoline
is a condensate fraction comprised mostly of pentane. Sour gas contains hydrogen
sulfide, and acid gas contains carbon dioxide and/or hydrogen sulfide. Sour-gas pro-
cessing plants coproduce elemental sulfur, which is used to make sulfuric acid and
fertilizers. Some natural gas contains commercial quantities of inert gases—helium
(the product of α-decay in radioactive minerals underground), neon and/or argon.
Almost all commercial helium comes from natural gas plants as a byproduct [2].
1.2 Fossil Hydrocarbons (Fossil Fuels) 5

1.2.1.1 Gas Hydrates (Clathrates)

Methane is also present in another form as methane hydrate (clathrates) [3], where
methane is incarcerated in a cluster of water molecules as an ice-like material. Vast
amounts of methane hydrate deposits occur on the deep ocean floor on continental
margins and in places north of the arctic circle. It is estimated that methane hydrate
deposits contain around 6.4 trillion (6.4 × 1012 ) tonnes of methane [4]—twice as
much carbon as all other fossil fuels on earth. However, the necessary technol-
ogy for industrial production of the hydrates is not yet available. Hydrocarbon
clathrates cause problems for the petroleum industry, because they can form inside
gas pipelines, often resulting in obstructions.
The production of methane hydrate is fundamentally different than the extrac-
tion of oil and natural gas. The conventional recovery is based on the hydrocarbons
flowing naturally through the pores of reservoirs to the production well. Hydrates,
on the other hand, are solid. They must be dissociated first before methane can be
extracted. Several methods have been tested, such as hot water injection to break
down the hydrate and release methane, depressurization by drilling into the deposits
to release pressure for releasing methane, and carbon dioxide injection to replace
methane in the clathrate (molecular cage). Carbon dioxide hydrates are more stable
than methane hydrates. Carbon dioxide captured from natural gas and coal power
plants and injected into hydrates for storage is a strategy of carbon dioxde seques-
tration to reduce its emission into atmosphere. Each technique has its challenges
and limitations. Hence, which of these methods will be best suited for production at
industrial scales is still uncertain.

1.2.2 Liquids (Crude Oils)

Crude oil is the common name for liquid petroleum. Crude oils, also called crudes,
are complex mixtures. There are hundreds of different crudes with significantly
different compositions. Crudes typically are named for their source country, reservoir,
and/or some distinguishing physical or chemical property. Table 1.1 presents selected
physical and chemical properties for ten crude oils.
The lightest liquid is condensate, which is essentially natural gas liquids, with
boiling points in the gasoline range. Light crude oils have low boiling points, low den-
sities (specific gravities), low viscosities, low sulfur, and low or negligible amounts
of nitrogen and other hetero-atom compounds. In sweet crudes such as Tapis (a
Malaysian crude), the sulfur content is low (0.028%). Sour crudes have more sulfur,
which gives them a tart taste. Synthetic crude oil is produced from coal, kerogen,
or natural bitumen. Processing costs are higher for conventional or synthetic crudes
with high density and large amounts of sulfur, nitrogen, and trace contaminants.
Shengli and many other Chinese crudes are very high in nitrogen, which can present
special challenges during processing.
6 1 Characteristics and Historical Events

Table 1.1 Selected properties of ten crude oils [5]

Crude oil API gravitya Residueb (vol.%) Sulphur (wt%) Nitrogen (wt%)
Alaska North Slope 27.1 53.7 1.2 0.2
Arabian Light 33.8 54.2 1.8 0.07
Arabian Heavy 28.0 46.6 2.8 0.15
Athabasca 8 50.8c 4.8 0.4
Brent (North Sea) 39 38.9 0.3 0.10
Boscan (Venezuela) 10.2 82.8 5.5 0.65
Kuwait 31.4 49.5 2.3 0.14
Shengli (China) 24.7 72.5 0.8 0.41
Tapis Blend 45.9 26.3 0.028 0.018
(Malaysia)
West Texas 40.2 36.4 0.3 0.08
a API Gravity is related to specific gravity by the formula
°API = (141.5/(specific gravity @ 60 °F))—131.5
b Unless otherwise stated, cut point = 343 °C-plus (650°F-plus) for atmospheric resids
c Cutpoint = 525 °C (913 °F) for vacuum resids of extra-heavy crude oils and bitumen

Heavy crude oils possess high density—close to that of water. Extra Heavy
oils have densities greater than water. Both oils have very high boiling points and
high viscosities (>1000 centipoise (cP)). They also contain high concentrations of
heteroatom-atom containing hydrocarbons.
Distillation yields are an exceptionally important property of petroleum, because
distillation is the key step in separating crude oil into useful fractions, which deter-
mine the value of crude oil. Crudes containing larger amounts of light, low-boiling
fractions—naphtha, kerosene, and gas oil (diesel)—are more valuable. Table 1.2
shows distillation data for four common crudes. The naphtha content of Brent is
twice as high as Ratawi, and its vacuum residue content is 60% lower. Bonny Light
crude yields the most middle distillate and the least amount of vacuum residue.

1.2.3 Bitumen, Asphalt, Tar

Colloquially, the terms “bitumen,” “asphalt,” and “tar” are used interchangeably to
describe certain black, semi-solid mixtures of hydrocarbons. “Pitch” is an archaic
term for the same kind of substance. Geologists say “bitumen” when referring to
natural deposits, such as the famous La Brea Tar Pits. In the United States, bitumen
produced by crude oil refining is called “asphalt.” Outside the United States, bitu-
men from refineries is called “refined bitumen” or simply “bitumen”. The severely
degraded oil on oil sand, or tar sand, is also called “bitumen”.
Like extra heavy oils, natural bitumens have specific gravities greater than 1.0 (API
gravity <10), but the viscosities are higher (>10,000 cP). Under ambient conditions,
1.2 Fossil Hydrocarbons (Fossil Fuels) 7

Table 1.2 Distillation yields for four selected crude oils [5]
Source field Brent Bonny light Green canyon Ratawi
Country Norway Nigeria USA Mid East
API gravity 38.3 35.4 30.1 24.6
Specific gravity 0.8333 0.8478 0.8752 0.9065
Sulfur, wt% 0.37 0.14 2.00 3.90
Yields, wt% feed
Light ends 2.3 1.5 1.5 1.1
Light naphtha 6.3 3.9 2.8 2.8
Medium naphtha 14.4 14.4 8.5 8.0
Heavy naphtha 9.4 9.4 5.6 5.0
Kerosene 9.9 12.5 8.5 7.4
Atmospheric gas oil 15.1 21.6 14.1 10.6
Light VGO 17.6 20.7 18.3 17.2
Heavy VGO 12.7 10.5 14.6 15.0
Vacuum residue 12.3 5.5 26.1 32.9
Total naphtha 30.1 27.7 16.9 15.8
Total middle distillate 25.0 34.1 22.6 18.0
Naphtha plus distillate 55.1 61.8 39.5 33.8

natural bitumen is a soft and/or sticky solid, but when heated it flows. In practical
terms, it is recovered as a solid but transported and processed as a liquid by adding
diluents to lower viscosity. It is important to distinguish between natural bitumen and
refined bitumens. The latter are specialty products with rather tight specifications.
Refined bitumen is used primarily for paving and construction. Tar sands (also known
as oil sands) contain much of the world’s recoverable oil.
The largest bitumen/extra heavy oil deposits are in Venezuela with a total of 298
billion barrels. In 2nd place is Alberta, Canada, where the proven reserves are 173
billion barrels; in addition, the province holds 1.4 billion barrels of conventional
crude [6]. In comparison, for that same year, proven reserves of conventional crude
oil in Middle East were 804 billion barrels [7]. In tar sands, bitumen is associated with
sand and clay, from which it can be recovered with hot water or steam. Venezuela’s
oil sands are technically “extra heavy oil” deposits since they don’t contain bitumen.
The viscosities of Canadian tar sands vary widely, ranging from 10,000 to 600,000 cP,
while those of Venezuelan tar sands are more uniform, typically ranging from 4000
to 5000 cP [7]. In the United States, tar sands are found primarily in Eastern Utah,
mostly on public lands. These deposits contain 12 to 19 billion barrels of recoverable
oil.
8 1 Characteristics and Historical Events

1.2.4 Solids

Compared to liquids and gases, solids are harder to recover, transport and refine.
Liquids and gases can be pumped through pipelines and into refineries with rela-
tive ease. Slurries of coal and water can be transported as fluids, but the water must
be removed and eventually purified at considerable expense before the coal can be
burned or gasified. Solid coal is consumed on a large scale to produce heat, steam and
electricity. These days, coal-powered transportation vehicles are rare. Coal-burning
steam ships and railway locomotives are less efficient than their oil-powered coun-
terparts. Typically, the specific energy of petroleum is 90% greater than a ton of
bituminous coal and 40% greater than a ton of anthracite [8]. Even if for some
reason a railroad or shipping company wanted to burn coal, doing so wouldn’t be
practical due to the present lack of coaling stations. Coal is the most widely used
fuel in China and many other countries for power generation. Sulfur, ash, and trace
metals in the coal cause severe contamination of air with smog, acid rain, mercury,
and particulates. Upon combustion, the sulfur becomes sulfur oxides (SOx), primar-
ily SO2 . High-temperature combustion generates nitrogen oxides (NOx) from the
nitrogen and oxygen in air. Smog (photochemical smog) is generated by sunlight-
induced reactions between nitrogen oxides (NOx) and volatile organic hydrocarbons
(VOC); reaction products include ground-level ozone, an especially noxious pollu-
tant. Sulfate particulates, ranging in size from 1 to 20 microns, can be carried by
winds hundreds of miles, eventually returning to the earth as dry or wet “acid depo-
sition.” Wet deposits are commonly called “acid rain,” which also can contain NOx.
The combination of smog, particulates, and acid rain can be deadly, especially in
large cities.
Kerogen is the solid organic matter in sedimentary rocks. Unlike bitumen, it
doesn’t flow even when heated. But at high-enough temperatures—e.g., 900 °F
(480 °C)—it decomposes into gases, liquids, bitumen, and refractory coke. Huge
amounts of kerogen are trapped in oil shale deposits. Fenton et al. [9] estimated that
1.3 trillion barrels of shale oil could be recovered from the world’s oil shale reserves.
Table 1.3 presents composition information on Green River oil shale from the west-
ern United States. About 91% of the kerogen is hydrogen and carbon, but only 15%
of the shale is kerogen. Shale oil—synthetic crude from oil shale—tends to contain
high amounts of arsenic, a severe poison for refinery catalysts, and mercury. Usu-
ally, the arsenic is removed in existing hydrotreating units with special high-nickel
chemisorption catalysts, which trap the arsenic by forming nickel arsenides.
Coal is another non-petroleum hydrocarbon resource. It is a black or brown
combustible rock composed mostly of carbon, hydrocarbons and ash. Generally,
it is classified into four ranks—anthracite, bituminous, sub-bituminous, and lignite.
Anthracite is relatively rare, containing 86–97% carbon and has a high heating value.
Bituminous coal is far more common. It contains 45–86% carbon and is burned
to generate electricity. It is also used extensively in the steel and iron industries.
Sub-bituminous coal contains 35–45% carbon, and lignite contains 25–35% carbon.
Lignite is crumbly, has high moisture content and relatively low heating value. Over
1.2 Fossil Hydrocarbons (Fossil Fuels) 9

Table 1.3 Typical Kerogen content: 15 wt%a

composition of Green River
oil shale Kerogen Composition, wt% of kerogen
Carbon 80.5
Hydrogen 10.3
Nitrogen 2.4
Sulfur 1
Oxygen 5.8
Total 100
Minerals, wt% of mineral content
Carbonates 48
Feldspars 21
Quartz 15
Clays 13
Analcite & pyrite 3
Total 100
a Equivalent to 25 gallons oil per ton of rock

the years, special circumstances have driven the large-scale conversion of coal into
liquids, both directly and indirectly. Direct processes convert coal into various com-
binations of coal tar, oil, water vapor, gases, and char. The coal tar and oil can be
refined into high-quality liquid fuels [10].
Developed in 1925, the Fischer-Tropsch (F-T) process is the main indirect route
for converting coal into liquids. The coal is first gasified to make synthesis gas (syn
gas)—a balanced mixture of CO and hydrogen. Over F-T catalysts, synthesis gas is
converted into a full range of hydrocarbon products, including paraffins, alcohols,
naphtha, gas oils, and synthetic crude oil. The F-T process was used extensively in
Germany between 1934 and 1945. In South Africa, an improved version of the F-T
process is used on a large scale to manufacture chemicals and fuels.
Synthesis gas is also derived from natural gas via steam-methane reforming. It can
be converted into hydrogen and petrochemicals such as methanol. Worldwide, vast
amounts of hydrogen are used to produce ammonia via the Haber-Bosch process.

1.3 Use of Petroleum: A History

Examination of artifacts shows that humans were using petroleum long before writing
emerged as a means of conveying knowledge and recording events from one genera-
tion to the next. According to archaeologists, bitumen was used for hafting spears as
early as 70,000 BC near Umm el Tlel, in present-day Syria [11]. Neanderthals used
bitumen, too. A paper by Cârciumaru et al. provides evidence that Neanderthals in
10 1 Characteristics and Historical Events

Romania also hafted spears with bitumen between 28,000 and 33,000 BC; the dates
are based on uncalibrated 14 C dating [12, 13].
Jane McIntosh’s excellent book [14] about the ancient Indus valley shows that
baskets were water-proofed with bitumen before 5500 BC in Mehrgarh, an ancient
site located in present-day Pakistan between the cities of Quetta, Kalat and Sibi.
Bitumen is mentioned in some of the earliest records, specifically those written
on tablets in about 3200 BC and discovered in the ancient city of Sumer. Bitumen
use is also mentioned in Egyptian pictographs that were written at roughly the same
time. Sumer was the leading city of the Sumerian civilization, which arose in about
3500 BC in Mesopotamia—“the land between two rivers”—and lasted until about
1900 BC. The two rivers are the Tigris and Euphrates, located in present-day Iraq.
Sumerian writings describe the use of bitumen for mortar, to cement eyes into
carvings, for building roads, for caulking ships, and in other waterproofing applica-
tions. The asphalt came from nearby oil pits, and great quantities of it were found
on the banks of the river Issus, one of the tributaries of the Euphrates.
The Greek historian Herodotus mentioned the use of bitumen in Babylon (1900
to 1600 BC), including for construction of the famous Tower [15, 16].
From about the same time (3200 BC), Egyptian writings describe the use of pitch
to grease chariot wheels and asphalt in mummification, primarily to water-proof the
strips of cloth in which the mummies were wrapped. The Egyptians’ primary source
of bitumen was the Dead Sea, which the Romans called Palus Asphaltites (Asphalt
Lake).
As far back as 1500 BC, while drilling for brine, Chinese miners discovered natural
gas, which was used as a communal source for lighting and heating. The Chinese
were also drilling pioneers. Confucius wrote in 600 BC about using bamboo poles
to build pipelines and drill 100-foot natural gas wells.
In 347 AD, oil was being produced from bamboo-drilled wells in China. Bitumen
was slowly boiled to get rid of lighter fractions, leaving behind a thermoplastic
material with which scabbards and other items were covered. Statuettes of household
deities were cast with this type of material in Japan, and probably also in China.
Ancient Persian tablets tell about using bitumen and its fractions for lighting, top-
ical ointments, and flaming projectiles. It is likely that the light fractions were recov-
ered with simple batch distillation apparatus similar to those described by Zosimus,
an alchemist who lived at the end of the 3rd and beginning of the 4th century AD
[17]. By 500 BC, it was known that light fractions, such as naphtha could be used
not just for illumination, but also as a supplement to asphalt, making the latter easier
to handle.
Greek fire was invented during the reign of Constantine IV Pogonatus (668–685)
by Callinicus of Heliopolis, a Jewish refugee from Syria. This formidable incendiary
weapon was hurled onto enemy ships from siphons and burst into flame on contact
with air. It could not be extinguished with water. In 673 AD, Greek ships used the
weapon to defend Constantinople (today’s Istanbul, Turkey), crippling the Arab fleet
that was attacking the city [18]. The composition of Greek fire was kept as a top secret
and remains a matter of speculation and debate. However, Greek fire is believed to
be a viscous liquid composed of naphtha, liquid petroleum, bitumen and quicklime.
1.3 Use of Petroleum: A History 11

In more recent times, the French extracted oil from oil sands in the 1700s. In
the United States and Canada, oil appeared in brine wells and was recovered by
skimming.
The modern petroleum era began in the 1840s. In 1847, James Oakes built a “rock
oil” refinery in Jacksdale, England, to recover “paraffin oil” for lamps. Benjamin
Silliman Jr., a chemist hired by the Pennsylvania Oil Rock Company, determined
that 50% of a petroleum sample could be distilled into burning oils and 40% could
be employed for lubrication and gas lighting. The first modern oil well was drilled in
1848 by F. N. Semyenov in Azerbaijan. Eleven years later, an actual oil refinery was
constructed near the well to convert the raw materials into desired products. A large
milestone in petroleum products was reached when Canadian geologist Abraham
Gesner distilled kerosene from crude oil in 1848. The operation replaced the need
for whale oil for lamps and heating. The first true oil well in North America was
drilled in Petrolia, Ontario in 1858.
In the 1840–1850s, most home-based lamps burned whale oil or other animal
fats. Historically, whale-oil prices had always fluctuated wildly, but they peaked
in the mid-1850s. By some estimates, due to the over-hunting of whales, in 1860
several species were almost extinct. Whale oil sold for an average price of US$1.77
per gallon between 1845 and 1855. In contrast, lard oil sold for about US$0.90 per
gallon. Lard oil was more abundant, but it burned with a smoky, smelly flame. Michael
Dietz invented a flat-wick kerosene lamp in 1857. The Dietz lamp was arguably the
most successful of several devices designed to burn oils other than animal fats [19].
Ignacy Łukasiewicz independently developed practical kerosene lamp. By 1858–59,
Łukasiewicz lamps were replacing other forms of illumination in Austrian railway
stations.
The availability of kerosene got a sudden boost on August 27, 1859, when Edwin
L. Drake struck oil with the well he was drilling near Titusville, Pennsylvania. By
today’s standards, the well was shallow—about 69 feet (21 meters) deep and it
produced only 35 barrels per day. Drake was able to sell the oil for US$20 per barrel,
a little less than the price of lard oil and 70% less than the price of whale oil.
Drake’s oil well was not the first—according to one source, the Chinese beat
Drake by thousands of years—but it may have been the first for which the goal was
oil production, and it may have been the first well of any kind drilled through rock
with a steam powered rotary engine. In any event, the Drake well certainly triggered
the Pennsylvania oil rush. Figure 1.2 shows some of the closely spaced wells that
sprang up in 1859 in the Pioneer Run oil field a few miles from Titusville.
According to a report issued in 1860 by David Dale Owens, the state geologist
of Arkansas: “On Oil Creek in the vicinity of Titusville, Pennsylvania, oil flows out
from some wells at the rate of 75–100 gallons in 24 hours already fit for the market.
At least 2000 wells are now in progress and 200 of these are already pumping oil or
have found it.”
According to The Prize, a prize-winning book by Daniel Yergin: “When oil first
started flowing out of the wells in western Pennsylvania in the 1860s, desperate oil
men ransacked farmhouses, barns, cellars, stores, and trash yards for any kind of
barrel—molasses, beer, whiskey, cider, turpentine, sale, fish, and whatever else was
12 1 Characteristics and Historical Events

Fig. 1.2 Pioneer Run oil field in 1859. Photo used with permission from the Pennsylvania Historical
Collection and Museum Commission, Drake Well Museum Collection, Titusville, PA

handy. But as coopers began to make barrels especially for the oil trade, one standard
size emerged, and that size continues to be the norm to the present. It is 42 gallons.”
The United States has produced about 3 billion barrels since the Drake Well. In
1870, America was the world’s leading oil producer, and oil was America’s 2nd
biggest export. The first cargo of oil was exported from American in 1861, and
by 1870 Russia and the United State were the two leading countries for petroleum
development. In the 1930s, the United States was the leading producer of oil, but was
also a major consumer and therefore not a major exporter. Oil companies began to
expand their exploration interests into countries in the Middle East, Africa, Europe,
and to Canada.
In 1879, Thomas Edison invented the electric light bulb, which slowly but surely
began to replace kerosene as an illuminant. In the late 19th Century and the early
20th Century, the world’s navies began to switch from coal to fuel oil. The Anglo-
Persian Oil Company (later part of BP) was established to provide fuel for the British
navy. In 1889, Gottlieb Daimler, William Mayback and (separately) Karl Benz built
the first gasoline-powered automobiles, creating a niche market for naphtha. Inter-
nal combustion engines grew in popularity, but were too expensive for most people.
Henry Ford changed that. In 1908, the Ford Motor Company began selling Model T
automobiles for $950 each. By 1910, 50,000 cars filled the roads of America and the
growing demand for fuels pushed refining to its limits. Refining at this moment was
still primitive up until the introduction of cracking. Cracking was discovered when
engineers realized heavier fractions of crude oil could be cooked until they cracked
1.3 Use of Petroleum: A History 13

into lighter components. In the 1920s, the creation of Prohibition Act allowed for
experts in alcohol distillation to find jobs elsewhere, namely, the petroleum indus-
try. Bringing knowledge previous learned in the spirits industry, these technologists
revolutionized the petroleum field with a multitude of developments and enthusiasm
for research. Petroleum refining was well established at this point.
John D. Rockefeller and his partners started concentrating on oil refining, instead
of drilling for oil, in 1867. His company grew by taking over other local refineries
in Cleveland, Ohio and established the Standard Oil Company in 1870. Through
horizontal integration his wealth soared as kerosene and gasoline grew in importance,
and he became the richest person in the country. At the peak, Standard Oil controlled
90% of all oil in the United States. In 1911, citing violations of federal anti-trust laws
by Supreme Court, the U.S. Justice Department ordered the breakup of Rockefeller’s
Standard Oil into 34 entities, including five regional “majors”, shown in Fig. 1.3.
Among these, Standard Oil of New York (SOCONY then Mobil) and Standard Oil
of New Jersey (Esso then Exxon) were merged into ExxonMobil in 1999. Standard
Oil of Ohio (Sohio) and Standard Oil of Indiana (Amoco) were acquired by BP in the
1990s. Standard Oil of California (SOCAL) changed the name to Chevron, which
merged with Gulf Oil in 1985 and acquired Texaco in 2001. In the 1920s, the seven
leading global companies (also known as seven sisters) shown in Fig. 1.4 dominated
the oil industry worldwide. Three of the 5 largest oil companies are based in the
U.S. and are spinoffs from Standard Oil; the remaining two are in Europe. Table 1.4
lists the historical events of discovery, recovery, refining and usage of crude oil from
prehistorical era to 1911.
Organization of Petroleum Exporting Countries (OPEC) was founded in Bagdad,
Iraq by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, with headquarters in Vienna,
Austria. In addition to the five founding members, there are 10 other members cur-
rently: Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Libya, Nigeria, Qatar,
the Republic of Congo and United Arab Emirates. Indonesia suspended OPEC mem-
bership in 2016 for not agreeing with oil production cut. As of 2018, the 15 countries
accounted for 44% of global production and 81.5% of the world’s “proven” reserves.
Two-third of OPEC’s oil production and reserves are in the six Middle-Eastern coun-

Fig. 1.3 Five major spinoff Standard of New

companies from Standard York
Standard Oil

Oil in 1911
Standard of New
Jersey
Standard of
Indiana

Standard of Ohio

Standard of
California
14 1 Characteristics and Historical Events

Table 1.4 Historical events of the discovery, recovery, refining and usage of crude oil
Date Description
≈ 70,000 BC According to archeologists, bitumen was used for hafting
≈ 5500 BC spears in Umm el Tlel, in present-day Syria
3200 BC Baskets were water-proofed with bitumen before 5500 BC
in Mehrgarh, in present-day Pakistan
Written descriptions of bitumen use correspond to the
advent of writing. Sumerian writing describe the use of
asphalt as an adhesive for making mosaics, for lining
water canals, sealing boats, and build roads. Egyptian
writings describe the use of pitch to grease chariot wheels,
and asphalt to embalm mummies
1500 BC In China, natural gas is used as a light and heating source
600BC Confucius writes about using bamboo poles to build
pipelines and drill 100-foot natural gas wells
347 AD Oil was produced from bamboo-drilled wells in China
c. 672 AD Byzantine Greeks invented formidable “Greek fire” by
mixing petroleum products with quicklime, which was
used to defend Constantinople from the Arab attack
1200–1300 AD The Persians mine seep oil near Baku (now in Azerbaijan)
1500–1600 AD Seep oil from the Carpathian Mountains is used in Polish
street lamps. The Chinese dig oil wells more than 2000
feet (600 meters) deep
1735 AD Oil is extracted from oil sands in Alsace, France
Early 1800s Oil is produced in United States from brine wells in
Pennsylvania
1847 James Oakes builds a “rock oil” refinery in Jacksdale,
England. The unit processes 300 gallons per day to make
“paraffin oil” for lamps. James Young builds a coal-oil
refinery in Whitburn, Scotland
1848 F.N. Semyenov drills the first “modern” oil well near Baku
1849 Canadian geologist Abraham Gesner distills kerosene
from crude oil
1854 Ignacy Lukasiewicz drills oil wells up to 150 feet (50
meters) deep at Bóbrka, Poland
1857 Michael Dietz invents a flat-wick kerosene lamp (Patent
issued in 1859)
1858 Ignacy Lukasiewicz builds a crude oil distillery in
Ulaszowice, Poland. The first oil well in North America is
drilled near Petrolia, Ontario, Canada
(continued)
1.3 Use of Petroleum: A History 15

Table 1.4 (continued)

Date Description
1859 Colonel Edwin L. Drake triggers the Pennsylvania oil
boom by drilling a well near Titusville, Pennsylvania that
was 69-feet deep and produced 35 barrels-per-day
1859 An oil refinery is built in Baku (now in Azerbaijan)
1860–61 Oil refineries are built near Oil Creek, Pennsylvania;
Petrolia, Ontario, Canada; and Union County, Arkansas.
The most desired product is kerosene for illumination
1863 John. D. Rockefeller, M.B. Clark and Samuel Andrews
finance an oil refinery in Cleveland, Ohio
1870 Rockefeller and Andrews charter the Standard Oil
Company
1879 Thomas Edison patents the electric light bulb. Over time,
the light bulb decreased the market for illumination
kerosene
1901 The Spindle Top gusher marks the discovery of the giant
East Texas oil field
1908 Oil is discovered in Iran. The Anglo-Iranian Oil Company
(AOC) is formed. AOC later became BP
1908 Advent of the Model T Ford brings gasoline-powered
automobile travel to the average American
1911 The U.S. Justice Department orders the breakup of
Standard Oil in 34 companies, including 5 “regionals”

tries that surround the oil-rich Persian Gulf. The OPEC cartel offset the dominance
of “seven sisters.” It especially influences crude oil prices.

Leading Global
Industries in the
1920s

US based Non US
companies companies

SOCAL GULF Royal British

MOBIL TEXACO EXXON Dutch Shell Petroleum
(CHEVRON OIL
(SHELL) (BP)

Fig. 1.4 Seven major global companies of the 1920s

16 1 Characteristics and Historical Events

Today, about 90% of transportation fuel needs are met by oil. While petroleum
accounted for 33% of worldwide energy consumption in 2015, it was responsible
for only 3.9% of worldwide electricity generation [1]. Figure 1.5 shows the world’s
energy consumption since 1820 [20].
Petroleum’s worth as a portable, energy-dense fuel powering the vast majority of
vehicles and as the base of many industrial chemicals makes it one of the world’s
most important commodities. The condition of the oil industry depends on several
key parameters, such as overall supply and demand, the number of vehicles in the
world and the kinds of fuel they burn, net energy gain (economically useful energy
provided minus energy consumed), the political stability of oil exporting nations,
and the ability to defend oil supply lines.
The top three oil producing countries are the United States, Russia (Eurasia), and
Saudi Arabia. Figure 1.6 shows the crude oil productions of these three countries in
2010–2014. The U.S. surpassed Russia and Saudi Arabia as world’s largest producing
country in 2014, after technology advances in hydraulic fracturing to produce large
quantities of gas and oil from shale.
About 48% of the world’s readily accessible reserves are located in the Middle
East, with 46% coming from the Arab Five: Saudi Arabia, UAE, Iraq, Iran and
Kuwait. As mention above, a large portion of the world’s total oil exists as bitumen
in Canada and extra heavy oil in Venezuela.

Fig. 1.5 World Energy Consumption since 1820 [20]

References 17

Fig. 1.6 Crude Oil Production of United States, Saudi Arabia and Eurasia (Russia and the Former
Soviet Union) in 2010–2014

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