Soran University 11/27/2024

Soran University
Petroleum Engineering Department

INTRODUCTION TO PETROLEUM
ENGINEERING

2024

Soran University
Petroleum Engineering Department

LECTURE # 1
INTRODUCTION
Fenk A Sulaiman

2024

1
Soran University 11/27/2024

Content

 Petroleum and Energy

 Oil and Gas Industry
 Petroleum Geosciences (Exploration)
 Petroleum Engineering
 Petroleum Reservoir
 Drilling Process
 Petroleum Production
 Oil and Gas Units
 Life Cycle of a Reservoir
 Reservoir Management
 Petroleum Economics
 Oil and Gas Company Classification
3

Petroleum and Energy

 Petroleum is a mixture of
hydrocarbon molecules and inorganic
impurities that can exist in the solid,
liquid (oil), or gas phase.

 The global economy is based on an

infrastructure that depends on the
consumption of petroleum.

2
Soran University 11/27/2024

Petroleum and Energy

 Petroleum Usage:
1. Transportation Fuels: Gasoline, diesel, jet fuel, and marine fuels.

2. Energy: Heating and electricity generation.

3. Petrochemicals: Plastics, fertilizers, and synthetic materials.

4. Industrial Uses: Lubricants, asphalt, and solvents.

5. Consumer Products: Cosmetics, detergents, and pharmaceuticals.

5
2

Oil and Gas Industry

 The terms upstream, midstream, and downstream refer to different segments of the oil
and gas industry, each representing distinct phases in the production and distribution
process.

Upstream Midstream Downstream

3
Soran University 11/27/2024

Oil and Gas Industry

 Upstream
 This refers to the
Upstream
exploration and
production phase. It
involves searching for,
drilling, and extracting oil
and natural gas from
underground reservoirs.
Activities in this sector
include geological
surveys, seismic testing,
and the development of
production facilities to
bring the resources to the
surface.
7

Oil and Gas Industry

 Midstream
 Focuses on the Midstream
transportation, storage,
and sometimes the initial
processing of oil and
gas. Once extracted,
crude oil and natural gas
need to be moved from
the production site to
refineries or processing
facilities, often via
pipelines, ships, trucks,
or rail. This phase also
includes storage and
terminal operations.
8

4
Soran University 11/27/2024

Oil and Gas Industry

 Downstream
 This is the refining and
distribution phase. It Downstream
involves refining crude
oil into usable products
like gasoline, diesel, jet
fuel, and
petrochemicals. The
downstream sector also
includes the marketing
and distribution of these
products to consumers,
either directly (e.g., gas
stations) or through
wholesalers.
9

Oil and Gas Industry

 Flowchart shows oil and gas

industry categories

10

5
Soran University 11/27/2024

Petroleum Geosciences (Exploration)

 It refers to the specific Petroleum System

set of geological
disciplines that are
applied to study the
origin, occurrence,
movement,
accumulation, and
search for hydrocarbons
(petroleum exploration).

11

Petroleum Geosciences (Exploration)

 Seismic survey is a low-impact, non-invasive

method used to gather information about the

location and characteristics of geological

structures beneath the Earth's surface.

 It produces detailed maps to identify areas

where crude oil and gas deposits may be found.

12

6
Soran University 11/27/2024

Petroleum Geosciences (Exploration)

 Seismic data are Rock type Vp(km/sec)

converted from time Anhydrite 4.1-5.0

to depth domain
Basalt 5.0-6.4
using well and
seismic velocity data Chalk 2.1-4.2

yield the detailed Dolomite 3.5-6.9

structural
Limestone 1.7-7.0
configuration of the
reservoir, including Salt 4.4-6.5

the faults that break Sandstone 1.4-4.3

it.
Mixed 2.1-4.5
sand/shale
Shale-Slate 2.3-4.7
13

Petroleum Engineering

 Petroleum engineering is concerned with the production of petroleum from subsurface reservoirs.

 A typical workflow for designing, implementing, and executing a project to produce hydrocarbons
must fulfill several functions.

 People with skills from many disciplines are involved in the workflow.

Petroleum geologists and geophysicists use technology to provide a description of

hydrocarbon‐bearing reservoir rock.

Petroleum engineers apply knowledge of the behavior of oil, water, and gas in porous rock to
extract hydrocarbons.

14

7
Soran University 11/27/2024

Petroleum Engineering

 Petroleum engineers tend to specialize in one of three

subdisciplines:

1.Reservoir engineering  Reservoir engineers

seek to optimize hydrocarbon production using an
understanding of fluid flow in the reservoir, well placement,
well rates, and recovery techniques.
2.Drilling engineering  Drilling engineers are
responsible for drilling and completing wells.
3.Production engineering  Production engineers design
Hydrocarbon production system
and select subsurface equipment to produce oil and gas well
fluids.

15

Petroleum Reservoir

 A petroleum reservoir (oil

and gas reservoir) is a
subsurface pool of
hydrocarbons contained in
porous or fractured rock
formations.
 Oil, gas, and water are
contained in the pore space
of reservoir rock.
 The accumulation of
hydrocarbons in rock is a
Example of a reservoir rock including petroleum
reservoir. migration and entrapment

16

8
Soran University 11/27/2024

Petroleum Reservoir

 Porous and permeable

Impermeable

Permeable

17

Petroleum Reservoir

 Petroleum reservoirs are broadly classified

as conventional and unconventional
reservoirs.

 In conventional reservoirs  the naturally

occurring hydrocarbons, such as crude oil
or natural gas, are trapped by overlying
rock formations with lower permeability,

 In unconventional reservoirs  the rocks

have high porosity and low permeability,
which keeps the hydrocarbons trapped in
place, therefore not requiring a cap rock.

18

9
Soran University 11/27/2024

Reservoir Types Based on Hydrocarbon Content

 Oil reservoir

 In some reservoirs, only oil and water

are present at the reservoir’s pressure
and temperature conditions.

 Between a reservoir’s oil and water

zones, there is a section of the
vertical column referred to as an oil-
water transitional zone.

19

Reservoir Types Based on Hydrocarbon Content

 Oil depleted reservoir

 In this type of reservoir, natural gas

occurs as solution gas, and is evident
or present only when reservoir
pressure sufficiently decreases, and
gas breaks out of the oil.

20

10
Soran University 11/27/2024

Reservoir Types Based on Hydrocarbon Content

 Associated free gas reservoir

 In other reservoirs, the associated free gas is

found at the structural top of the trap, forming a
gas cap.

 Beneath the gas cap is the oil accumulation and

beneath the oil is water.

 Such a reservoir could produce both the

associated free gas and solution gas dissolved in
the oil with well completions established in each
zone.

21 2

Reservoir Types Based on Hydrocarbon Content

 Gas reservoir

 In still other natural gas reservoirs, the gas zone

structurally is above a gas-water transition zone.

 The gas zone often contains connate water

saturation, which increases with depth, to
eventually become a completely water saturated
zone.

 The gas in this type of hydrocarbon accumulation

is referred to as non-associated gas, as there is
no oil present.

22

11
Soran University 11/27/2024

Drilling Process

 Drilling creates a pathway to the produced fluids

from the reservoir.

 Drilling rigs may be permanently installed or

portable.

 Typically, a hole (well) is drilled of a diameter

according to the diameter of drill bit if diameter of
the hole is kept smaller the bit can get stuck in
hole and will cause an adverse problem for the
crew.

 As drilling proceeds, bit is changed according to

different diameters of the hole ensuring the safe
operation.

23

Drilling Process

 Wells are needed to extract fluids from the reservoir.

 Each well must be drilled and completed so that fluids can flow from
the reservoir to the surface.
 The connection between the well and the reservoir is achieved by
completing the well so fluid can flow from reservoir rock into the well.

 Well performance in the reservoir depends on:

 The properties of the reservoir rock
 The interaction between the rock and fluids
 Fluid properties.

24

12
Soran University 11/27/2024

Drilling Process

25

Drilling Process

26

13
Soran University 11/27/2024

Drilling Process

 Drilling Classification

 Vertical well drilling

 Horizontal well drilling

27

Drilling Process

 Drilling Classification

 Directional well drilling

 Multilateral well drilling

28

14
Soran University 11/27/2024

Petroleum Production

 Petroleum production is the process of

preparing a well for hydrocarbon extraction
through well completion.

 Well completion involves installing casing,

tubing, and wellhead equipment, followed Well completion
by initiating production to bring oil or gas to
the surface using natural pressure or
artificial lift systems.

29

Petroleum Production

Well head (x-mass tree)

Well manifolds

30

15
Soran University 11/27/2024

Petroleum Production

 Separator is a piece of equipment that is used to

separate fluid from the well into oil, water, and gas
phases for transport to storage and processing
facilities.
 Produced hydrocarbons must be processed into marketable
products.
 Processing typically begins near the well site and continues
at refineries.
 Refined hydrocarbons are used for a variety of purposes: Three-Phase Horizontal Separator
 Natural gas for utilities
 Gasoline and diesel fuel for transportation
 Asphalt for paving.

31

Oil and Gas Units

 Two sets of units are commonly found in the petroleum literature:

 Oil field units

 Metric units (SI units)

32

16
Soran University 11/27/2024

Oilfield Units

33

34

17
Soran University 11/27/2024

Oil and Gas Units

35

Life Cycle of a Reservoir

 The life cycle of a reservoir begins when the field becomes an exploration
prospect and does not end until the field is properly abandoned.

Exploration: is the stage of a petroleum project focused on identifying and

assessing geological structures (prospects) that may contain hydrocarbons. It
involves allocating resources, acquiring and analyzing data, and, if warranted,
drilling an exploration well to evaluate the potential for development.

36

18
Soran University 11/27/2024

Life Cycle of a Reservoir

 Exploratory wells (wildcats) can be used to test a trap that has never produced,
test a new reservoir in a known field, and extend the known limits of a producing
reservoir.

Discovery occurs when an exploration well is drilled and hydrocarbons are

encountered.

Production can begin immediately after the discovery well is drilled or several
years later after appraisal and delineation wells have been drilled.

37

Life Cycle of a Reservoir

 Appraisal wells are used to provide more information about reservoir

properties and fluid flow.

 Delineation wells better define reservoir boundaries. In some cases, delineation

wells are converted to development wells.

 Development wells are drilled in the known extent of the field and are used to
optimize resource recovery.

38

19
Soran University 11/27/2024

Life Cycle of a Reservoir

 A buildup period ensues after first oil until a production plateau is reached.

 The production plateau is usually a consequence of facility limitations such as

pipeline capacity.

 A production decline will eventually occur.

 Production continues until an economic limit is reached and the field is

abandoned.

39

Life Cycle of a Reservoir

 Figure 1.2 illustrates a typical production profile for an oil field beginning with
the discovery well and proceeding to abandonment.

40

20
Soran University 11/27/2024

Life Cycle of a Reservoir

 Production stages were identified by chronological order as:

Primary production

Secondary production

Tertiary production

Sketch of production stages

41

Life Cycle of a Reservoir

 Production stages were identified by chronological order as:

Primary production (Primary recovery)

o Primary production is the first stage of production and relies entirely on natural
energy sources to drive reservoir fluids to the production well.

Secondary production (Secondary recovery)

o Oil recovery can be increased in many cases by slowing the decline in pressure.
This can be achieved by supplementing natural reservoir energy.

42

21
Soran University 11/27/2024

Life Cycle of a Reservoir

Secondary production

o The supplemental energy is provided using an external energy source, such as

water injection or gas injection.

o The injection of water or natural gas may be referred to as pressure maintenance

or secondary production.

o Pressure maintenance is often introduced early in the production life of some

modern reservoirs without subjecting the reservoirs to a conventional primary
production phase.

43

Life Cycle of a Reservoir

Tertiary production (Enhance Oil Recovery)

o EOR processes include miscible, chemical, thermal, and microbial processes.

• Miscible processes inject gases that can mix with oil at sufficiently high
pressures and temperatures.

• Chemical processes use the injection of chemicals such as polymers and

surfactants to increase oil recovery.

44

22
Soran University 11/27/2024

Life Cycle of a Reservoir

Tertiary production (Enhance Oil Recovery)

• Thermal processes add heat to the reservoir. This is achieved by injecting

heated fluids such as steam or hot water or by the injection of oxygen-containing
air into the reservoir and then burning the oil as a combustion process.

• Microbial processes use microbe injection to reduce the size of high molecular
weight hydrocarbons and improve oil mobility.

45

Life Cycle of a Reservoir

• EOR processes were originally implemented as third production stage after

secondary production, but laboratory experiments and field applications showed
some fields perform better if applied earlier in field life.

• EOR processes were often more expensive than just drilling more wells in a
denser pattern. The process of increasing the density of wells in an area is known
as infill drilling.

• Improved Oil Recovery (IOR): includes EOR and infill drilling for improving
the recovery of oil.
46

23
Soran University 11/27/2024

Life Cycle of a Reservoir

 Several mechanisms can occur during the production process:

 Production mechanisms that occur during primary production depend on such factors as
reservoir structure, pressure, temperature, and fluid type.

 Production of fluids without injecting other fluids will cause a reduction of reservoir pressure.

 The reduction in pressure can result in expansion of in situ fluids.

 In some cases, the reduction in pressure is improved if water moves in to replace the produced
hydrocarbons.

 Many reservoirs are in contact with water-bearing formations called aquifers.

47

Life Cycle of a Reservoir

 Example 1. Gas Recovery

The original gas in place (OGIP) of a gas reservoir is 5 trillion ft3 (TCF). How
much gas can be recovered (in TCF) if recovery from analogous fields is
between 70 and 90% of OGIP (original gas-in-place)?

 Solution 1.

 Two estimates are possible: a lower estimate and an upper estimate.

o The lower estimate of gas recovery is 0.70 × 5 TCF = 3.5 TCF.

o The upper estimate of gas recovery is 0.90 × 5 TCF = 4.5 TCF.

48

24
Soran University 11/27/2024

Reservoir Management

 Reservoir management is a continuous process that determine the optimum

operating conditions needed to maximize the petroleum production from a
subsurface resource.

 Reservoir management competing objectives: optimizing oil and gas

recovery from a reservoir while simultaneously minimizing capital investments
and operating expenses.

 Other objectives of the reservoir management:

 Decreasing of the risk

 Increasing of the oil and gas reserves 49

Reservoir Management

 Reservoir management is a process for balancing competing objectives to

achieve the key objective.

 An alternate definition says that reservoir management is a continuous process

designed to optimize the interaction between data and decision making.

 Both definitions describe a dynamic process that is intended to integrate

information from multiple disciplines to optimize reservoir performance.

50

25
Soran University 11/27/2024

Reservoir Management

 The process should recognize uncertainty resulting from our inability to

completely characterize the reservoir and fluid flow processes.

 It may be necessary to modify a reservoir management plan based on new

information obtained during the life of the reservoir.

 The plan should be flexible enough to accommodate changes in economic,

technological, and environmental factors. Furthermore, the plan is expected to
address all relevant operating issues, including governmental regulations.

51

Reservoir Management

 As an example:

Consider the development of an oil reservoir.

o It is possible to maximize recovery from the reservoir by drilling a large number

of wells, but the cost would be excessive.

o Drilling a single well would provide some of the oil but would make it very
difficult to recover a significant fraction of the oil in a reasonable time frame.

52

26
Soran University 11/27/2024

Reservoir Management

 The reservoir management process must be designed and implemented to

individual fields on the basis of:
 Logistics and size of the field/reservoirs
 Geological complexity of the field/reservoirs
 Reservoir rock and fluid properties
 Depletion state
 Regulatory controls
 Economics

53

Reservoir Management(Cont’d)

Reservoir
Management
process
Workflow 54 5

27
Soran University 11/27/2024

Petroleum Economics

 A prediction of cash flow from a project is obtained by combining a prediction of fluid production volume with
a forecast of fluid price.

 Production volume is predicted using engineering calculations, while fluid price estimates are obtained using
economic models.

 The calculation of cash flow for different scenarios can be used to compare the economic value of competing
reservoir development concepts.

 Cash flow is an example of an economic measure of investment worth.

 An economic measure should be consistent with the goals of the organization. It should be easy to understand
and apply so that it can be used for cost‐effective decision making.

55

Petroleum Economics

 Net cash flow from investment is made up of a number

of components; some positive, some negative; for
example ;
 Revenue: The total income
 Capital expenditure (CAPEX)  costs of drilling,
equipment, facilities, and infrastructure.
 Operational expenditure (OPEX)  Costs associated
with day-to-day operations, such as labor,
maintenance, utilities, and transportation.

56

28
Soran University 11/27/2024

Petroleum Economics

 Royalty
 Royalties and Taxes: Payments to governments or landowners based on production levels or
revenues.
 Price
 Oil is usually priced in U.S.$/barrel.
 Natural gas is priced either in $/million British Thermal Units (MMBtu) or by the cubic
meter (feet).
 Benchmark crudes in the world  for reporting the price on a daily basis.
 Brent in the North Sea | Minas in Indonesia | Urals in Russia | Dubai in the Persian/Arabian
Gulf | West Texas Intermediate (WTI) delivered at Cushing and Oklahoma (USA).

57

Petroleum Economics

Major Benchmark Crudes in the World:

Brent Crude (Brent Blend):
•Location: North Sea (between the UK and Norway).
•Importance: One of the most widely used benchmarks for oil pricing, especially for
oil produced in Europe, Africa, and the Middle East.

•Characteristics:
• Light crude (API gravity of ~38 degrees).
• Sweet (low sulfur content of ~0.37%).

•Usage: Pricing standard for about two-thirds of the world's internationally traded crude
oil supplies.
•Current Price: $75.18 per barrel (September 25, 2024)
58 10

29
Soran University 11/27/2024

Petroleum Economics

West Texas Intermediate (WTI):

•Location: United States, primarily in Texas.
•Importance: Main benchmark for oil pricing in North America.

•Characteristics:
• Lighter than Brent (API gravity of ~39.6 degrees).
• Sweet (low sulfur content of ~0.24%).

•Usage: Benchmark for oil produced and consumed in the U.S.

•Current Price: $71.52 per barrel (September 25, 2024)

59 10

Petroleum Economics

Dubai/Oman Crude:
•Location: Middle East, primarily Dubai and Oman.
•Importance: Benchmark for crude oil exported from the Middle East to Asia,
especially for sour crudes.

•Characteristics:
• Heavier and sourer than Brent and WTI (API gravity of ~31 degrees for Dubai
and ~32 for Oman).
• Higher sulfur content (~2%).

•Usage: Primary benchmark for pricing Persian Gulf crude oil.

•Current Price: Approx. $73.00 per barrel (September 25, 2024)

60 10

30
Soran University 11/27/2024

Petroleum Economics

Urals Crude:
•Location: Russia (produced in the Urals and Western Siberia).
•Importance: Benchmark for Russian and Eastern European crude oil.

•Characteristics:
• Heavier and sourer than Brent and WTI (API gravity of ~31.5 degrees).
• Higher sulfur content (~1.3%).

•Usage: Reference for pricing Russian crude, particularly for export to Europe.
•Current Price: Approx. $71.00 per barrel (September 25, 2024)

61 10

Petroleum Economics

 Oil benchmark price

62

31
Soran University 11/27/2024

Petroleum Economics

63 10

Oil and Gas Company Classification

 Operator (client)
 The company or individual responsible for managing an exploration,
development or production operation.

 Service company
 The company that works with operators in delivering oilfield services
including drilling, cementing, production and etc.

64

32
Soran University 11/27/2024

Oil and Gas Company Classification

 National company
 A national oil company (NOC) is an oil and gas company fully or in the
majority-owned by a national government
 Sinopec | Revenue: $377 billion | China Barrels per day: 4.88 million
 Saudi Aramco | Revenue: $355.9 bn | Saudi Arabia | barrels per day: 13.6 million
 Royal Dutch Shell | Revenue: $322 bn | UK-Netherlands | Barrels per day: 3.7
million
 BP | Revenue: $303.7 billion | UK | Barrels per day: 4.1 million
 Gazprom | Revenue: $112 billion | Russia | Barrels per day: 9.7 million

65

33