The Awl BidnessThe Awl BidnessLarry W. Lakey

Petroleum and Geosystems EngineeringThe University of TexasThe University of Texas

The Oil BusinessThe Oil BusinessLarry W. Lakey

Petroleum and Geosystems EngineeringThe University of Texas

E l ti

The University of Texas

Exploration ProductionUpstream

RefiningD t Transportation

MarketingDownstream

Marketing

A Brief Quiz

1 Wh t i th l it f tit f1. What is the usual unit for a quantity of crude oil?

2. What is the usual unit for a quantity of natural gas?

3 H h d il i t ki3. How much crude oil goes into making gasoline?

4. How much of your gasoline bill pays for the crude oil?

A Brief Quiz (cont.)

5 Wh il fi t di d i5. When was oil first discovered in commercial quantities?

6. Name three personal items that are nothydrocarbon products.

7. What is the largest reservoir in the U.S.? In the world?In the world?

8 When will we run out of oil?8. When will we run out of oil?

Exploration

Seal or trap Gas cap

Oil column

Water column or aquifer

Source rockSource rock

QuickTime and aTIFF (Uncompressed) decompressorTIFF (Uncompressed) decompressor

are needed to see this picture.

Seismic

Darcys Law

THE

PU BL IC FO UN T A IN SO F TH E C IT Y O F D IJONE XP E RIE NC E AND A PP LICA T IO N

PR INC IP L ES T O FO LLO W AND FORM U LA S TO B E U SE D

IN T HE QU ES TIONIN T HE QU ES TION

O F

T H E D IST R IBU TI O N O F W A TERWO R K FI NI SH ES W IT H

AN A PPE ND IX R EL A T ING TO T HE WA T ER S U PP LIES OF SEV E RA L C ITI ES

T HE F IL TE R ING O F WA T ER

AND

T HE MANU FA C TU R E O F ST RONG P IPE S O F L EA D SH EE T M E TA L A N D B IT UM E NT HE MANU FA C TU R E O F ST RONG P IPE S O F L EA D , SH EE T M E TA L A N D B IT UM E N

BY

H ENR Y DAR C YIN SPE C T OR GE N ER A L OF B R ID G ES A ND H IGHW A YS

The good quality o f wa ter i s one of th in gs w hi ch contr ib u te th e m ost toThe good quality o f wa ter i s one of th in gs w hi ch contr ib u te th e m ost tothe health of c iti ze n of a c it y . T her e is n o th ing th at th e m agistra te

should have m ore of int eres t i n then m ai n ta in ing the quali ty of thatw hich is us efu l for th e dr ink comm une of ma n an d of a ni ma l, an d

re m edies ac ci de nt s b y which th es e water can b e al tere d, be in t he r ead offountai n , of r iver , o f bro ok or th ey r un , be in th e p la ce or be c ons erv ed

that th a t one i n deri ve , be f in a ll y i n t he well of or b e born of s our ce.(D e J US SIEU , H ist. de I 'A cad im ie. roya le des s ciences , 1733, p. 351.)

PAR IS

V IC T OR DAL M ON T , ED ITO R,Succe sso r o f Ca ril ian-G aery and Vor Da lm on t,

BO O KS EL LE R OF TH E I MP ER IA L C OR PS O F BR IDG E S, H IGH W AY S AND M IN ES ,Qu ay o f A ugus tin s, 49 .

1856

Darcys E iExperiment

Production

qo =4khkro

4A( )[ ](P Pwf)

D i i

4ACArw2

( )ln + 2s[ ]oDrivingForce

Productivity Index, PI

Production

qo =4khkro

4A( )[ ](P Pwf)4A

CArw2( )ln + 2s[ ]o

Oil Rate - make as large as possible

Goal of everything we do

Production

qo =4khkro

4A( )[ ](P Pwf)4A

CArw2( )ln + 2s[ ]o

Constants - Live with themConstants Live with them

Production

qo =4khkro

4A( )[ ](P Pwf)4A

CArw2( )ln + 2s[ ]o

Natural logarithm makes aNatural logarithmNatural logarithm - makes a large number small

Natural logarithm

For example, ln(1000) = 6.9

Production

qo =4khkro

4A( )[ ](P Pwf)4A

CArw2( )ln + 2s[ ]oPermeability - basic property of

Make largerocks

God provides or doesn't FracturingFracturing

Production

qo =4khkro

4A( )[ ](P Pwf)4A

CArw2( )ln + 2s[ ]o

Well pressure Make small

Well pressure

Lift with gas Pump (reduce fluid level)p ( )

Production

qo =4khkro

4A( )[ ](P Pwf)4A

CArw2( )ln + 2s[ ]o

Average reservoir pressure Make large Reinject produced gas Reinject produced gas Inject water (waterflood)

Production

qo =4khkro

4A( )[ ](P Pwf)4A

CArw2( )ln + 2s[ ]o

Penetrated thickness Make large God provides, etc.p , Reperforating Horizontal wells Horizontal wells

Horizontal Wells.

Aggie DrillingAggie Drilling Engineer

From A.D. HillFrom A.D. Hill

Production

qo =4khkro

4A( )[ ](P Pwf)4A

CArw2( )ln + 2s[ ]o

Oil relative permeability Make large

L il

p y

Large oil content Inject chemicals, CO2j , 2

Production

qo =4khkro

4A( )[ ](P Pwf)4A

CArw2( )ln + 2s[ ]oOil viscosity

Make small Inject heat (steam)Inject heat (steam) Burn a little oil

Production

qo =4khkro

4A( )[ ](P Pwf)4A

CArw2( )ln + 2s[ ]o

Well damage (skin factor) Make small

Fracture well Fracture well Inject acid

Results of Quiz

1. What is the usual unit for a quantity of crude oil?crude oil?

1 barrel = 1 bbl = 42 U S gallons1 barrel = 1 bbl = 42 U.S. gallons 1+6 zeros = 1 MMbbl 1+9 zeros = 1 Bbbl 1 metric ton = 7.5 barrels1 metric ton 7.5 barrels Giant field: 100 MMbbl = 0.1 Bbbl

Results of Quiz

2. What is the usual unit for a quantity of natural gas?natural gas?

1000 standard cubic feet = 1 MCF 1000 standard cubic feet = 1 MCF 1 MCF+6 zeros = 1 BCF 1 MCF+9 zeros = 1 TCF Roughly: 6 MCF gas = 1 Bbl crude

Results of Quiz

3. How much crude oil goes into making gasoline?

Transportation Waste 83 %

Work Achieved

a spo a o

Industrial

Non-Fuel

Waste = 83 %

Work Achieved

39 %Petroleum

Residential/

Industrial

Waste = 20 %

Work Achieved23 % NaturalGas

Commercial

Electricity

Waste = 25 %

Work Achieved23 % CoalElectricityGeneration & Transmission Waste = 68 %15 %

NuclearHydroOther

Crude oil = transportationSource: LLNL/DOE

Results of the Quiz

4. How much of your gasoline bill pays for the crude oil?

(American Petroleum Institute, Sept. 2008)

Results of Quiz

4 How much of your Expense per gallon4. How much of your gasoline bill pays for the crude oil?

Production 15-60Producer profit 53-58for the crude oil? pRefining 13Marketing 51$ change in Marketing 5Transportation 15Retailer 6

crude price causes

Retailer 6Refining etc. profit

102.5 change in gasoline price profit

US taxes 19Ave state taxes 23Ave. state taxes 23Total 159

www.factsonfuel.org/gasoline

Results of Quiz

5 Wh il fi t di d i5. When was oil first discovered in commercial quantities?

Drakes Folly 1859Drake s Folly 1859 Corsicana 1894 Spindletop 1901 Big Lake (Permian) 1923

TexasBig Lake (Permian) 1923

East Texas 1928

Results of Quiz

6. Name three personal items that are not6. Name three personal items that are nothydrocarbon products.

Anything made fromCotton Silk Leather Metals MineralsCotton, Silk, Leather, Metals, Minerals

But dont forget.All of the above require energy to be q gyproduced

Results of Quiz

7. What is the largest reservoir in the U.S.?

Prudhoe Bay, Alaska 20+ Bbbls in place

In the world?

Ghawar, Saudi Arabia 300+ Bbbls

Results of Quiz

8. When will we run out of oil?

USGS Est. of Ultimate Rec 204770

2005 2037

UR B-BblsProbability

Low (95%)

Mean (Expected Value)

High (5%)

2,248

3,003

3,8962026

20372% Growth60

50

r Yea

r

2026DeclineR/P = 10

40

30arr

els

per

HistoryMeanLow (95%)High (5%)

30

20

Bill

ion

Ba

C

EIA- DOE Estimates, 1900--2125

2005

High (5%)

10

0

B Campbell-Laherrere World Oil Production Estimates, 1930-2050

01900 1925 1950 1975 2000 2025 2050 2075 2100 2125

When will we run out of oil?

Undulating Plateau vs Peak Oil

U.S. Production, Hubbert vs Actual

From Jackson (JPT, 2007)

vs. Peak OilHubbert vs. Actual

Major Points

Hydrocarbons found in porous rocksy p Crude oil = transportation Crude oil is about 70% of gasoline price Hydrocarbons essential to current way of

lifelife

World has a 30+ year supply; delivery rate a question

For More Information

U S Energy Information Administration U.S. Energy Information Administration American Petroleum InstituteAmerican Petroleum Institute International Energy Agency California Division of Oil and Gas Early Texas Oil (Rundell) www.factsonfuel.org/gasoline L L k @ il t d Larry_Lake@mail.utexas.edu

Chemical EOR Processes...

Process Typical Typical AgentRecovery (%) Utilization

Polymer 5 1/3-1/2 lb polymer/bbl oil producedp

Micellar/ 15 15-25 lb surfactantpolymer bbl oil producedpolymer bbl oil produced

Alkaline/ 5 35-45 lb chemicalpolymer bbl oil produced

Solvent EOR Processes...

ProcessUlt. Recovery

UtilizationProcess% OOIP

Utilization

Miscible 10-15 10 MCF/bbl

Immiscible 5-10 10 MCF/bblImmiscible 5-10 10 MCF/bbl

Thermal Recovery Processes...

Process Ult. Recovery% OOIP

Utilization

Steam (drive and soak)

50-65 0.5 bbl /bbl equivalent)

Combustion 10-15 10 MCF air/bbl

SAGD ?? ??

Various EM Like steam Like steam