Oil and Gas Industry Overview [Training Basics Series]

[Music] [Music] During this overview of the oil and gas industry, we will look at the early days, explain the three sectors of the industry, and some of the differences. There will be videos covering common topics often discussed today, and we'll touch on the different geological formations that upstream producers drill and produce. Our focus will then shift to different types of wells producers use to bring their resources to the surface, then close by looking at what makes up oil and gas resources being produced. On August 27th, 1859, Edwin Drake made the first successful use of a drilling rig on a well and drilled specifically for oil. Historians believe that the need to find a replacement for whale oil was the motivation for this endeavor. Early production sites looked nothing like today's locations. They do tell us that artificial lift has been important to the upstream sector from the beginning. This derrick was needed to pump oil to the surface. Getting the product to market has always been a challenge. This was the beginning of the midstream sector. Once the resources reached the surface, like most commodities, they have to be delivered to the market. This flow chart shows the three different sectors of the oil and gas industry. The upstream industry finds and produces crude oil and natural gas. The upstream is sometimes known as the exploration and production sector or E&P. Today, there are several ways that an E&P company artificially lifts the resources to the surface. A modern version of the wooden derrick that we saw earlier is represented here in this photograph. The midstream industry processes, stores, markets, and transports commodities such as crude oil, natural gas, and natural gas liquids or NGLs. Those NGLs are mainly ethane, propane, butanes, and sulfur. Midstream companies are a vital link between the far petroleum-producing areas and the population centers where most customers are located. The midstream landscape can vary from one location to the next. It all depends on the resources being produced and the volume of that resource. This example of a compressor station shows one way that natural gas is transported from the production fields to market. The downstream industry includes oil refineries, petrochemical plants, petroleum products retail outlets, and natural gas distribution companies. The downstream industry touches every province and territory and provides thousands of products such as gasoline, diesel, jet fuel, heating oil, asphalt, lubricants, synthetic rubber, plastics, fertilizers, antifreeze, pesticides, pharmaceuticals, natural gas, propane, and a lot more. The downstream sector is very different from the other two sectors. Process pressures and the desired final product will dictate what a downstream facility looks like. The drilling or well is where the upstream sector begins. This part of our industry has dramatically changed since the mid-2000s. Here is a list of the top four produced reservoirs in the United States today. Oil reservoirs are mostly crude oil with some water and gas. Volatile oil reservoirs turn into gas wells after they are produced long enough. Dry gas reservoirs produce mostly natural gas with some water vapor. Gas condensate reservoirs are full of heavy hydrocarbons that turn into NGLs once they are brought to the surface. Not all formations are created equal. Pay zones and the resources located within them can vary between wells drilled on the same site. The market value of the resource that can be found in these formations will dictate to the producer if they are worth exploring and producing. This illustration shows us just a sample of the most popular wells being drilled today. Not all well types exist in every production play. Conventional gas refers to natural gas that has been produced from reservoirs using traditional drilling, pumping, and compression techniques. Shale gas is natural gas that is found trapped within shale formations. The shale needs to be fractured in order to produce the gas. Coal bed methane is a form of natural gas extracted from coal beds or coal seams. The term refers to methane that's been absorbed into the coal. Tight gas is natural gas produced from reservoir rocks with such a low permeability that massive hydraulic fracturing is necessary to produce the well at economic rates. When the natural drive energy of a reservoir is not strong enough to push the oil to the surface, artificial lift is employed to recover more production. These units bring motion to the surface and take liquid head pressure off the tubing. This allows natural pressure in the wellbore to free flow the well. Notice that a pumping unit has already been set in the background behind the wellhead. This is in preparation for when the flowing well no longer has enough energy to bring the product to the surface. This wellhead is on a dual completed well. Two separate formations are being produced up through the same wellbore and are being controlled at the same wellhead. Not all production areas use dual completed wells. The same type of well can be found throughout the midcontinent production field. This illustration shows how a dual completed well functions coming in on the same wellhead. A well needs to be perforated in order to allow resources to enter the wellbore and come to the surface. The perforation of a well typically takes place in the completion stage of operation. An oil well is not just producing oil. The well stream can vary in makeup from play to play and from well to well. This is a list of what may be found in an oil well stream. The ratio of oil to water or fluids to gas determines if a well is considered a gas well or an oil well. This chart shows a breakdown of different hydrocarbon properties. These properties can aid or hinder in the separation process. Understanding each is something that we will look at in future chapters. This list is a breakdown of what can be found in unrefined natural gas. Each of these components presents challenges to the producer. These challenges may be in the form of time, equipment purchased, or environmental impact. Reducing those costs is important and needs to be done correctly. Different producers need to know different data points. All pressures are not measured the same. PSIA may be more relevant in the midstream sector. PSIG is more commonly used in the upstream sector. Here is a list of the top 10 forms of energy being produced in the U.S. today. Some have been used for decades, while others are growing in use across the country. Thanks for participating in this training. This concludes the chapter for the oil and gas industry. [Music]

touch on the different geological formations that upstream producers drill and produce our focus will then shift to different types of wells producers used to bring their resources to the surface then close by looking at what makes up oil and gas resources being produced on

August 27th 1859 Edwin Drake made the first successful use of a drilling rig on well and drilled specifically for oil historians believe that the need to find a replacement for whale oil was the motivation for this endeavor early

production sites looked in nothing like today's locations they do tell us that artificial lift has been important to the upstream sector from the beginning this derrick was needed to pump oil to the surface getting the product to market has always been a challenge this

was the beginning of the midstream sector once the resources reached the surface like most commodities they have to be delivered to the market this flow chart shows the three different sectors of the oil and gas industry the upstream

industry finds and produces crude oil and natural gas the upstream is sometimes known as the exploration and production sector or EMP today there are several ways that an EMP company artificially lifts the resources to the surface a modern version of the wooden

derrick that we saw earlier is represented here in this photograph the midstream industry processes stores markets and transports commodities such as crude oil natural gas and natural gas liquids or NGLs those NGOs are mainly ethane propane butanes and sulphur

midstream companies are a vital link between the far petroleum producing areas and the population centers where most customers are located the midstream landscape can vary from one location to the next it all depends on the resources being produced and the volume of that resource

this example of a compressor station shows one way that natural gas is transported from the production fields to market the downstream industry includes oil refineries petrochemical plants petroleum products retail outlets and natural gas distribution companies the downstream industry touches every

province and territory and provides thousands of products such as gasoline diesel jet fuel heating oil asphalt lubricants synthetic rubber plastics fertilizers anti freeze pesticides pharmaceuticals natural gas propane and a lot more the downstream sector is very different from the other two sectors

process pressures and the desired final product will dictate what a downstream facility looks like the drilling over well is where the upstream sector begins this part of our industry has dramatically changed since the mid 2000s here is a list of the top four produced

reservoirs in the United States today oil reservoirs are mostly crude oil with some water and gas volatile oil reservoirs turn into gas wells after it is produced long enough dry gas reservoirs produce mostly natural gas with some water vapor gas condensate

reservoirs are full of heavy hydrocarbons that turn into NGLs once they are brought to the surface not all formations are created equal pay zones and the resources located within them can vary between wells drilled on the same site the market value of the

resource that can be found in these formations will dictate to the producer if they are worth exploring and producing this illustration shows us just a sample of the most popular wells being drilled today not all well types exist in every

production play conventional gas refers to natural gas that has been produced from reservoirs using traditional drilling pumping and compression techniques shale gas is natural gas that is found trapped within shale formations the shale needs to be fractured in order

to produce the gas coal bed methane is a form of natural gas extracted from coal beds or coal seams the term refers to methane that's been absorbed into the coal tight gas is natural gas produced from reservoir rocks with such a low

permeability that massive hydraulic fracturing is necessary to produce the well at economic rates when the natural drive energy of a reservoir is not strong enough to push the oil to the surface artificial lift is employed to recover more production these units

bring emotion to the surface and take liquid head pressure off the tubing this allows natural pressure in the well bore to free flow the well notice that a pumping unit has already been set in the background behind the wellhead this is

in preparation for when the flowing well no longer has enough energy to bring the product to the surface this wellhead is on a dual completed well to separate formations are being produced up through the same well bore and are being

controlled at the same wellhead not all production areas use dual completed wells the same type of well can be found throughout the midcontinent production field this illustration shows how a dual completed well functions coming in on the same wellhead a well needs to be

perforated in order to allow resources to enter the well bore and come to the surface the perforation of a wealth typically takes place in the completion stage of operation an oil well is not just producing oil the well stream can vary in makeup from

play to play and from well to well this is a list of what may be found in an oil well string the ratio of oil to water or fluids to gas determines if a well is considered a gas well or an oil well

this chart shows a breakdown of different hydrocarbon properties these properties can aid or hinder in the separation process understanding each is something that we will look at in future chapters this list is a breakdown of what can be found in unrefined natural

gas each of these components presents challenges to the producer these challenges may be in the form of time equipment purchased or environmental impact reducing those costs is important and needs to be done correctly different producers need to know

different data points all pressures are not measured the same psia may be more relevant in the midstream sector PSIG is more commonly used in the upstream sector here is a list of the top 10 forms of energy being produced in the

u.s. today some have been used for decades while others are growing in use across the country thanks for participating in this training this concludes the chapter for the oil and gas industry [Music]