Geology in the News
From the New York Times, Feb. 3, 2012
Mount Isa , Queensland, Australia
World’s Largest Cu, Pb, Sn Mining Operation
Mount Isa
Mount Isa
Mount Isa , Queensland, Australia
World’s Largest Cu, Pb, Sn Mining Operation
Mining Operation
Toxic waste area
Open Pit Mine
Copper. Lead, silver miners in Pre-Cambrian shale
and volcanic rock, 2 billion years old
Northwest Offshore Australia Gas
Barrow Island Anticline Oil Field
Vagabond Venture Oil Group
SEARCH FOR FOSSIL
FUELS
Winter 2012
The Course Outline
The Basics:
Week 1: Geology of Coal, Oil and Gas
Week 2: Processes of Exploration
Week 3: Engineering Processes: Reservoir/
Drilling/Production
The Adventure:
Week 4: ‘Vagabond Group’ chooses 2 prospects
Week 5: ‘Vagabond
Group’
drills!
Your chance
to invest
Week 6: the Payout?!
A black-gold millionaire or dry hole hobo?
By now, you should start to see that deciding
-WHAT to drill
-WHERE to drill &
- HOW to drill
is a TEAM EFFORT
Composed of
GEOLOGIST, GEOPHYSICIST,
LANDMEN, & ENGINEERS
Today . . . .
12
Petroleum Engineer
Primary Jobs:
Reservoir
Characterization
Well Design Production &
& Drilling Enhancements
Economic
Analysis
13
Petroleum Engineer: Reservoir Characterization
Job #1
Reservoir Characterization
14
Petroleum Engineer: Reservoir Characterization
“Reservoir characterization methodology:
 determining reservoir architecture,
 establishing fluid-flow trends,
 constructing reservoir model, and
 identifying reserve growth potential
Further investigations within reservoir type:
 integrating data: petrophysical, seismic, and
geologic attributes
 3-D geo-celluar model building;
 delineating flow units and fluid flow
compartments,
 documenting reserve growth concepts under
varying reservoir conditions”
Texas Bureau of Economic Geology
15
Petroleum Engineer: Reservoir Characterization
From Seismic Data
16
Petroleum Engineer: Reservoir Characterization
Generalized Stratigraphic Map
17
Petroleum Engineer: Reservoir Characterization
PETROPHYSICAL & PALEO DATA
Laboratory Analysis
Well
core
Paleo Analysis
Lithology
18
Petroleum Engineer: Reservoir Characterization
PETROPHYSICAL DATA
Laboratory Analysis
Gulf of Mexico Pliocene Sandstone
1 millimeter
Porosity – a measure of the open
spaces within a rock that can contain
oil or water. Unit of measurement is
PERCENT
Permeability – a measure of the ability
for fluid to flow thru a rock. Unit of
measurement is DARCY
Point of Reference:
Concrete Block
Porosity
+/- 20%
Permeability
2–5D
Brick
+/- 5 %
.025 D (25 mD)
19
Petroleum Engineer: Reservoir Characterization
PETROPHYSICAL DATA – Rules of Thumb
Porosity (%)
RESERVOIR QUALITY
0 – 5%
Insignificant
5 – 10%
Poor
10 – 15%
Fair
15 – 20%
Good
20 – 25%
Excellent
PERMEABILITY
mD (milliDarcy)
RESERVOIR QUALITY
1 – 10 mD
Poor
10 – 100 mD
Good
100 – 1000 mD
Excellent
20
Petroleum Engineer: Reservoir Characterization
Correlation of Well Logs
(more on logging later…)
21
Petroleum Engineer: Reservoir Characterization
Resulting in
Reservoir Model
• Reservoir characteristics are
input to a program that
generates a 3D map of the
subsurface reservoir
• The 3D map can then be used
to assess where hydrocarbon
has migrated to which then
indicates where future wells
should be drilled
22
Petroleum Engineer: Reservoir Characterization
TYPICAL QUESTIONS TO ASK REGARDING
RESERVOIR CHARACTERIZATION
•
•
•
•
•
•
•
•
•
•
•
What is the source rock?
What type of reservoir rock is expected?
What reservoir porosity is expected?
What reservoir permeability is expected?
What is the expected trapping mechanism?
What type of drive mechanism is expected?
Is the well type a straight hole or deviated?
What is the planned TD (total depth) of the well?
How many feet of pay is expected?
How do characteristics vary between in-field wells?
How many PROVEN reserves are expected to be found?
23
Petroleum Engineer: Reservoir Characterization
Classification of Reserves is key!
What are Reserves?
The amount of oil & gas in a reservoir currently
available for production
Why are they important?:
Reserves when produced generate a cash flow and by
estimating the total cash flow from a well, the
“expected value” of that well can be calculated. This
sets the limit on much you can spend in developing
the well for any expected Return on Investment (ROI)!
24
Petroleum Engineer: Reservoir Characterization
Classification of Reserves is key!
BUT…
There are several different reserves names used:
• Reserves in Place (physically contained in the reservoir; remember that only 25
to 30% of that can actually be recovered with conventional technologies; OOIP)
• Recoverable Reserves (estimate of what can be produced from the reservoir)
• Proven Reserves, Developed or Undeveloped (reserves that can be
calculated with reasonable certainty because the field has been defined by appraisal
well(s) that have been tested)
• Proved Behind-Pipe Reserves (undeveloped, proven reserves calculated
behind the casing)
• Proved (P90), Probable (P50) and Possible (P10) Reserves
25
Petroleum Engineer: Reservoir Characterization
Classification of Reserves is key!
• Proved (P90) Reserves – 90 % chance or greater that the reserves
are there; must have “very high certainty” that reserves can be
“economically” recovered with current technology. Security and Exchange
Commission (SEC) allows only reporting of P90 as official data.
• Probable (P50) Reserves- 50 % chance that the reserves are there
• Possible (P10) Reserves - 10 % chance that the reserves are there
• Remember estimates are based on data from a location
as much as 2 miles below the surface, and on
characteristics of a hole 6” in diameter extrapolated
over several hundred acres of reservoir…
Reserves estimating is more of an art than a science!
28
Petroleum Engineer: Reservoir Characterization
Note that the world understands that “proved”
reserves is what’s important…
USA Today
29
Petroleum Engineer: Reservoir Characterization
Note that the world understands that “proved”
reserves is what’s important…
10th !
Domestic
International
30
Petroleum Engineer: Reservoir Characterization
Note that the world understands that “proved”
reserves is what’s important…
6th !
31
Petroleum Engineer: Well Design & Drilling
Job #2
Well Design and Drilling
32
Petroleum Engineer: Well Design
Well Design
during drilling
Blowout
Preventer
Blowout Preventer – Monitor &
Controls the pressure within
each casing string of the well
Casing String – Successive
sections of pipe of decreasing
diameter set one inside the
other and cemented in place
Surface
Casing
Strings
``
33
Petroleum Engineer: Well Design
How is Casing Installed?
• Drill 36” hole to design depth
Surface
• Slide 30” casing to depth within
36” hole
• Cement 30” casing to 36” hole
• Drill 24” hole thru cement in 30”
casing to design depth
30”
Casing
36”hole
• Slide 20” casing to depth within
the 24” hole
24”hole
• Cement 20” casing to 24” hole
20”
Casing
• And so on ….
34
Petroleum Engineer: Well Design
Typical Well Casing Program
• 30” Casing = Conductor Pipe (hung at
surface; it is drilled or driven)
Casing Size
Depth
• 20” Casing = Surface Casing (hung at
surface; may not be necessary,
depends on geology)
30 in
(36”hole)
500 ft
• 13 3/8” Casing = Intermediate Casing
(hung at the surface)
20 in
(26”hole)
3,000 ft
13 3/8 in
(17 ½” hole)
7,000 ft
9 5/8 in
(12 ½” hole)
10,000 ft
7 in Liner
(8½” hole)
15,000 ft
• 9 5/8” Casing = Intermediate casing
(depending on design, could be hung
off of 13 3/8”)
• 7” Liner = Not a casing per se because
it is hung off the end of the 9 5/8”
casing; it doesn’t run to the surface
35
Petroleum Engineer: Well Design
Well Casing Program
Why is casing needed?
• Protect freshwater aquifers that
might be present in the subsoil
• Prevents contamination between
rock strata layers
• Contain any unusual pressure in
the layers of rock strata that
might be encountered
• Prevent borehole collapse while
drilling deeper
• Provide control of drilling mud
being pumped down-hole
Freshwater Aquifer
Low Pressure Zone or
future producing zone
High Pressure Zone
Wellbore
thru the rock
strata
Black Gold!
36
Petroleum Engineer: Well Design
Well Design
during completion
Xmas Tree
Xmas Tree– Monitor & Controls
the pressure within the each
casing of the well while allowing
the well to flow to the surface
Surface
Perforations – Holes shot thru
the casing to allow fluid to
flow into the wellbore
Down-hole Completion
Equipment – Devices & tools
installed in the well to control
which reservoir is produced and
Perforations
to give real-time data
``
Down-hole
Completion
Equipment`
Captured from a
YouTube Video.
This is a section of
pipe tubing;
Shaped charges will
be set off to make the
perforations.
These pictures show
the power of the
shaped charges…
38
Petroleum Engineer: Well Design
Well Design
during completion
To
Production
Facilities
Xmas Tree
Production Tubing – A string of
pipe that runs from the
producing zone to the wellhead
in which oil and/or gas flows to
the surface facilities
Surface
``
Perforations
Down-hole
Completion
Equipment`
39
Petroleum Engineer: Well Design
Types of Well Design
•“Straight-hole”
•Directional or
“Deviated Well”
•“Horizontal Well”
Black Gold!
40
Petroleum Engineer: Well Design
Deviated Well
Why drill a deviated well?
• Known fault can cause an
unplanned deviation from
the projected drill path
• High pressure zones might
exist to one side of a fault
• Subsurface “debris” like
ancient reefs could cause a
slower drill rate (ROP) than
desired (time is money!)
High
Pressure
zones behind
fault
Fault
Black Gold!
41
Petroleum Engineer: Well Design
Deviated, Horizontal Wells
Why drill a horizontal well?
• Low permeability reservoirs
are best produced by
horizontal wells, the
ultimate in “deviated well”
• Three kinds of horizontal
wells, long/short/medium
radius:
• Long = 10 per 100ft
• Medium = 20 per 100ft
• Short = 40 per 100ft
Target
Reservoir
42
Petroleum Engineer: Well Design
Horizontal Well Procedure
• At start of deviation, replace drillbit
with a “bent sub”, gyroscope,
steerable mud motor & bit
• Add logging-while-drilling (LWD)
unit & power pack within 20 ft of bit
• Slowly rotate drillstring to prevent
“sticking” & start “pushing”
steerable system forward while
flowing mud to mud motor
• Drill while being pushed forward &
steer system as need be to maintain
horizontal direction
43
Petroleum Engineer: Well Design
Multilateral,
Horizontal Wells
• Added advantage of horizontal
well design is to include
“Multilaterals” (additional
boreholes from the same
drillsite)
Drillsite
Significant
Production
Increase
• From one wellsite, several
sections of the reservoir can
be accessed & produced
Plan view
44
Petroleum Engineer: Drilling Plan
Horizontal Drilling Advantages
• Increase in reserves in place by 2% of the original
oil in place (OIIP)**
• Cost ratio of horizontal versus vertical wells is
approximately 2 to 1**
• Production ratio for horizontal wells versus vertical
wells is approximately 3.2 to 1**
• Inclusion of multilaterals increases production ratio
even more!!
** per U.S. Department of Energy
45
Petroleum Engineer: Well Design
Final Well Program
• Well Schematic – Showing hole
(bit) size, casing plan, mud plan,
planned TD
• Drilling Time Estimate –
Breakdown total time into key
components to various depths
• Well Cost Estimate – Listing of all
expected costs for the well
• Well Time VS. Depth Plot – a
“picture” of how much drilling
time is planned for each casing
run
46
Petroleum Engineer: Drilling
47
Petroleum Engineer: Drilling
Well Location?
Onshore
Offshore
48
Petroleum Engineer: Drilling
Well Type?
Exploratory
(“Wildcat Well”)
On-structure
(“In-field”, Appraisal)
Normal Success
Rate = +/- 1 in 10 to
+/- 3 in 10
Normal Success
Rate = +/- 5 in 10 to
+/- 9 in 10
49
Petroleum Engineer: Drilling
Main Components of Drilling
Derrick
Traveling Block/Swivel
Turntable/Kelly/
Kelly Bushing
Blowout Preventer
Casing (different sizes)
Drill String
Drill Bit
Drill Mud
50
Petroleum Engineer: Drilling
What is Drilling Mud
A mixture of clay with either water, oil, oil and
water, or synthetic organic matter and water.
To this, various viscosity and density
enhancers and additives to achieve specific
objectives (adjust pH, control bacteria, defoam, filtrate reducers, etc.) are added.
Mud
IN
Mud out
Drilling Mud
Well
How does it get in the well? bore
Mud is pumped into the drill pipe, flows down
the drill pipe, exits out the drill bit, and flows,
along with rock cuttings, up the borehole back
to the rig.
Drill Bit
51
Petroleum Engineer: Drilling
What is the Drilling Mud System?
A ‘CLOSED SYSTEM’ where
the drilling mud is mixed &
pumped:
3. Mud
Hose
2. Mud
Pump
1. Mud Pit
or Tanks
4. Circulate Mud down
drillstring and back up
borehole exit below
Blowout Preventer
5. Shale shakers
• from the mud pit/tanks,
• up into the mud hose
• down into the drillstring,
• thru the drillbit,
• up the wellbore,
• over the shellshakers and
• back to the mud pit/tanks
52
Petroleum Engineer: Drilling
What does Drilling Mud do?
• Cools drill-bit
• Stabilizes borehole walls
• Transports rock cuttings (“cuttings”) to
surface (mud engineer examines cuttings
w/microscope to check for oil and porosity)
• Offsets hydrostatic/reservoir pressure
53
Petroleum Engineer: Drilling Plan
How Critical is
Drilling Mud?
0
500
• Blue line is Pore Pressure (the
pressure from the overburden)
• Yellow line is Mud Weight
pressure
• If Mud weight is too hi, it will
damage the reservoir; if too
low, a well blowout is possible!
20"
1,500
TVDBDF (m)
• Red line is the Pressure that
will fracture the Reservoir
1,000
2,000
2,500
13.5/8"
3,000
3,500
Overpressure
zones
4,000
10.3/4" x 9.7/8"
4,500
5,000
5,500
0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3
SG
Specific Gravity
55
Petroleum Engineer: Drilling
Drilling Contract Types
• Costs per Day (DAY RATE)
• Costs per Foot (FOOTAGE RATE)
• Set Costs (TURNKEY BASIS)
• Success often depends on quality &
experience of Operator
56
Petroleum Engineer: Drilling
Drilling Operations
• Survey well location
• Build roads, clear and level ground
• Drill water well (optional)
• Layout casing pipe/drill string &
equipment
• Prepare drilling mud
• Assemble Rig
• Drill each segment; set casing &
cement
57
Petroleum Engineer: Drilling
Drilling Operations (cont’d)
• Planned drill breaks: layout and position
casing on deck, circulate bottom to remove
cuttings, coring, drill stem testing, etc.
• Unplanned drill breaks: stuck pipe,lost
circulation, required fishing trip, etc.
• Let’s look at POSSIBLE DRILLING PROBLEMS,
CORING and WELL LOGGING
58
Petroleum Engineer: Drilling
Possible Drilling Problems
• Lost tool (something breaks off or is dropped in well)
• Stuck Pipe (drill pipe adheres to well walls due to suction/differential
pressure or dogleg in wellbore)
• Sloughing shale (swelling of shales, drops to bottom, can’t circulate
out)
• Lost circulation (high porosity zone/cavernous zone)
• Corrosive gases encountered (hydrogen sulfide)
• Abnormal high pressure (drill into/through a high press zone)
• Blowout (mud weight not sufficient to hold back abnormal high
pressure gas; gas flows to surface and ignites unexpectedly)
59
Petroleum Engineer: Drilling
What is Coring?
• Two types of coring:
• Sidewall Cores (1”dia X 4” long)
• Rotary Cores (3 ½” to 5 ¼” dia X
30-50 FEET long)
60
Petroleum Engineer: Drilling
What is a Well Log?
• After reaching the well “TD”, the well-bore is
logged using a tool that is “run” downhole on
a cable.
• In the tool are sensors that measure rock and
fluid properties continuously down the
borehole.
•
• Properties measured include: resistivity of the
rock, conductivity thru the rock, size of
borehole, rock’s reaction to nuclear radiation,
etc.
• A long, fan-folded, “chart” prints out the data
61
Petroleum Engineer: Drilling
Logging Types (not all)
•
•
•
•
•
•
•
•
•
Caliper Log
SP (spontaneous potential) Log
Dip/dipmeter Log
Electrical Resistivity Log
Sonic/Acoustic Velocity Log
Natural Gamma Ray Radiation Log
Neutron (Formation) Density Log
Neutron Porosity Log
Nuclear Magnetic Resonance Log
Each type of log has its advantages and disadvantages and hence
are used at different times and in different situations.
62
Petroleum Engineer: Drilling
Drilling Questions
• How many bidders? What are the advantages of
selected contractor?
• What type of rig contract?
• What is fixed price / what is variable price? Any
rented equipment included?
• Does contractor use own-crew or “rented” crew?
• What has been safety record of this rig/crew?
• Who is the Tool Pusher and what is his/her
experience?
• How much coring and logging is planned?
63
Petroleum Engineer: Drilling
Click here to see an
Onshore Drilling
Animation
REVIEW – SESSION 3
WHAT HAVE WE TALKED ABOUT?
TEAM effort composed of a
• Deciding what, where and how to drill is a _______
GEOLOGIST ____________,
LANDMAN
GEOPHYSICIST
ENGINEER
__________,
__________
and __________
and many others.
POROSITY
• The measure of open spaces in rock is the __________;
the measure of the ability
PERMABILITY
of fluid to flow thru rock is the ___________.
• The amount of oil/gas in a reservoir currently available for production is called
RESERVES
what? _________.
• The most important type reserves and the only one the SEC will accept are the
P90 OR PROVED
______________
reserves.
ART than a science.
• Reserves estimating is more of an ______
• Successive sections of pipe of decreasing diameter set one inside the other and
CASING STRING
cemented in a wellbore is the _______
______.
CASING
• Protection of freshwater aquifers in a well is done by the ________.
Next
page
64
REVIEW – SESSION 3
WHAT HAVE WE TALKED ABOUT?
EXPLORATION OR “WILDCAT” and _______________________.
APPRAISAL OR ON-STRUCTURE
• Two well types: ______________________
1
• The worst odds of an exploratory well being successful is ___in
10;
3
the worst odds of an on-structure/appraisal well being successful is ___in
10.
MUD
• When drilling, the drill bit is kept cool by the ______.
RESERVOIR
• If mud weight is too high, it will damage the ___________;
if too low, a well
BLOWOUT is possible.
__________
TOTAL DEPTH
• The depth below surface to the bottom of a well is the _____
_____ abbr. as “TD”.
• A technique of running a special tool downhole to take measurements around the
LOGGING
payzone is called well _________.
• Engineers are highly trained, overworked, and under-appreciated and therefore
MILLIONS!
they should be paid _________!
65
REVIEW – SESSION 3
Thank You!
Remember
Geology Rocks!
66
The Course Outline
The Basics:
Week 1: Geology of Coal, Oil and Gas
Week 2: Processes of Exploration
Week 3: Engineering Processes: Reservoir/
Drilling/Production
The Adventure:
Week 4: ‘Vagabond Group’ chooses 2 prospects
Week 5: ‘Vagabond
Group’
drills!
Your chance
to invest
Week 6: the Payout?!
A black-gold millionaire or dry hole hobo?
68
Petroleum Engineer - REFERENCES
INTERNET
• http://www.oilprimer.com/
• http://oilandgasinvesting.com/
• http://www.beg.utexas.edu/mainweb/presentations/2004
_presentations/pdf/wang_111704.pdf
• http://www.petroleum-economist.com/
• http://www.eia.doe.gov/bookshelf/brochures/gasolinepric
esprimer/index.html
• http://www.eia.doe.gov/pub/oil_gas/natural_gas/data_pu
blications/cost_indices_equipment_production/current/cos
tstudy.html
• http://oilandgasinvesting.com/news/1-latest-news/50investing-in-oil-a-gas-based-on-cash-flow-a-costs-versusrecoverable-reserves.html
• http://www.energyinst.org.uk/education/glossary/
• http://fossil.energy.gov/programs/reserves/npr
/publications/Drilling_for_Oil_and_Gas.pdf
• http://www.glossary.oilfield.slb.com/
• http://en.wikipedia.org/wiki/Well_drilling
• http://en.wikipedia.org/wiki/Drilling_mud
• http://www.youtube.com/watch?v=LcNZfJbH5pk
• http://www.youtube.com/watch?v=oZUUGpecphc&NR=1
• http://www.youtube.com/watch?v=fl8L4qSqSqE
• http://www.youtube.com/watch?v=cXd01nq_HK8
• http://www.geolab.unc.edu/Petunia/IgMetAtlas/mainmen
u.html
• http://www.offshore-mag.com/index.cfm
• http://tonto.eia.doe.gov/ftproot/petroleum/tr0565.pdf
• http://www.horizontaldrilling.org/
• http://home.versatel.nl/the_sims/rig/lakepeigneur.htm
• http://www.youtube.com/watch?v=BdRcALtA8CE&NR=1
• http://www.api.org/ehs/performance/explore/moreexplorprod
uction.cfm
• http://tonto.eia.doe.gov/dnav/ng/ng_enr_sum_dcu_rusf_a.ht
m
• http://www.eia.doe.gov/pub/oil_gas/natural_gas/data_publica
tions/crude_oil_natural_gas_reserves/current/pdf/appb.pdf
• http://www.eia.doe.gov/pub/oil_gas/petrosystem/petrosysog.
html
• http://www.energy.gov/energysources/fossilfuels.htm
• http://tonto.eia.doe.gov/energy_in_brief/foreign_oil_depende
nce.cfm
• http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publicati
ons/company_level_imports/current/import.html
• http://www.eia.doe.gov/neic/speeches/Caruso061305.pdf
• http://www.npc.org/Study_Topic_Papers/7-STGGlobalAccess.pdf
• http://www.eia.doe.gov/neic/infosheets/crudeproduction.html
• http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publi
cations/chronology/petroleumchronology2000.htm#T_2_
• http://images.google.com/imgres?imgurl=http://www.osha.go
v/SLTC/etools/oilandgas/images/rig09.jpg&imgrefurl=http://w
ww.osha.gov/SLTC/etools/oilandgas/illustrated_glossary.html&
h=628&w=353&sz=56&hl=en&start=18&tbnid=TwN7VuGlNKMVM:&tbnh=137&tbnw=77&prev=/images%3Fq%3
Drotary%2Boil%2Bdrilling%2Brig%26gbv%3D2%26hl%3Den%26
safe%3Doff%26sa%3D
• http://www.investopedia.com/features/industryhandbook/oil_
services.asp
69
Petroleum Engineer - REFERENCES
INTERNET
http://www.osha.gov/SLTC/etools/oilandgas/images/bop_stac
k.jpg
http://www.youtube.com/watch?v=lkqpEXy0frE&feature=relat
ed
http://www.youtube.com/watch?v=sYTO_0_0ReQ&feature=rel
ated
http://www.youtube.com/watch?v=4ntsk1g2oY&feature=related
http://www.techstreet.com/apigate.html
http://en.wikipedia.org/wiki/Jackup_barge
http://www.youtube.com/watch?NR=1&v=fNq2uKfSvhw&feature=
endscreen
http://www.youtube.com/watch?v=Q9gGqNUxQ5Q&feature=ends
creen&NR=1
http://en.wikipedia.org/wiki/Completion_(oil_and_gas_wells)
http://gekengineering.com/Downloads/Free_Downloads/Perforati
ng_Basics.pdf
http://en.wikipedia.org/wiki/Semi-submersibles
http://www.ehow.co.uk/info_8712642_deep-vs-shallow-waterdrilling.html
http://www.ehow.co.uk/about_4597210_offshore-oil-rigs.html
JACKUP DRILLING RIGS
70
SEMI-SUBMERSIBLES RIGS
71
INLAND WATER RIGS
72
Deepwater system types (2008)
73