Petroleum

PAMANTASAN NG LUNGSOD NG MAYNILA
Intramuros, Manila
College of Engineering and Technology
Chemical Engineering Department
Petroleum (Latin: petra: "rock" + oleum: "oil") is a naturally occurring, yellow-to-black liquid
found in geological formations beneath the Earth's surface, which is commonly refined into
various types of fuels.
Petroleum is a fossil fuel. Petroleum is often called crude oil, or oil. It is called a fossil fuel
because it was formed from the remains of tiny sea plants and animals that died hundreds of
millions of years ago. When the plants and animals died, they sank to the bottom of the oceans.
Here, they were buried by thousands of feet of sand and sediment, which turned into sedimentary
rock. As the layers increased, they pressed harder and harder on the decayed remains at the
bottom. The pressure and some heat changed the remains and, eventually, petroleum was
formed. Petroleum deposits are locked in porous rocks almost like water is trapped in a wet
sponge. When crude oil comes out of the ground, it can be as thin as water or as thick as tar.
Petroleum is called a nonrenewable energy source because it takes hundreds of millions of years
to form.
The crude oil mixture is composed of the following groups:

1. Hydrocarbon compounds (compounds made of carbon and hydrogen)
2. Non-hydrocarbon compounds
3. Organometallic compounds and inorganic salts (metallic compounds)
1. HYDROCARBON COMPOUNDS
Crude oils and high-boiling crude oil fractions are composed of many members of a
relatively few homologous series of hydrocarbons. The composition of the total mixture, in terms
of elementary composition, does not vary a great deal, but small differences in composition can
greatly affect the physical properties and the processing required to produce salable products.
Petroleum is essentially a mixture of hydrocarbons, and even the non-hydrocarbon elements are
generally present as components of complex molecules predominantly hydrocarbon in character,
but containing small quantities of oxygen, sulfur, nitrogen, vanadium, nickel, and chromium. The
hydrocarbons present in crude petroleum are classified into three general types: paraffins,
naphthenes, and aromatics. In addition, there is a fourth type, olefins, that is formed during
processing by the dehydrogenation of paraffins and naphthenes.

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Table 1: Petroleum composition by weight of Hyrdrocarbons
Hydrocarbon
Paraffins
Naphthenes
Aromatics
Olefins
Average
30%
49%
15%
6%
Range
15% to 60%
30% to 60%
3% to 30%
Remainder
The exact molecular composition varies widely from formation to formation but the
proportion of chemical elements vary over fairly narrow limits as follows:
Table 2: Petroleum composition by weight of elements
Element
Carbon
Hydrogen
Nitrogen
Oxygen
Sulfur
Metals
Percent Range
83% to 87%
10% to 14%
0.1% to 2%
0.05% to 1.5%
0.05% to 6%
<0.1%
PARAFFINS
The paraffin series of hydrocarbons is characterized by the rule that the carbon atoms are
connected by a single bond and the other bonds are saturated with hydrogen atoms. The general
formula for paraffins is CnH2n+2.
The simplest paraffin is methane, CH4, followed by the homologous series of ethane,
propane, normal and isobutane, normal, iso-, and neopentane, etc. When the number of carbon
atoms in the molecule is greater than three, several hydrocarbons may exist which contain the
same number of carbon and hydrogen atoms but have different structures. This is because carbon
is capable not only of chain formation, but also of forming single- or double-branched chains
which give rise to isomers that have significantly different properties. For example, the motor
octane number of n-octane is 17 and that of isooctane (2,2,4-trimethyl pentane) is 100.
The number of possible isomers increases in geometric progression as the number of
carbon atoms increases. There are two paraffin isomers of butane, three of pentane, 17 structural
isomers of octane and, by the time the number of carbon atoms has increased to 18, there are
60,533 isomers of cetane. Crude oil contains molecules with up to 70 carbon atoms, and the
number of possible paraffinic hydrocarbons is very high.

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Figure 1: Paraffins in Crude oil
OLEFINS
Olefins do not naturally occur in crude oils but are formed during the processing. They are
very similar in structure to paraffins but at least two of the carbon atoms are joined by double
bonds. The general formula is CnH2n. Olefins are generally undesirable in finished products
because the double bonds are reactive and the compounds are more easily oxidized and
polymerized to form gums and varnishes. In gasoline boiling-range fractions, some olefins are
desirable because olefins have higher research octane numbers than paraffin compounds with
the same number of carbon atoms. Olefins containing five carbon atoms have high reaction rates
with compounds in the atmosphere that form pollutants and, even though they have high
research octane numbers, are considered generally undesirable.
Some diolefins (containing two double bonds) are also formed during processing, but they
react very rapidly with olefins to form high-molecular-weight polymers consisting of many simple
unsaturated molecules joined together. Diolefins are very undesirable in products because they
are so reactive they polymerize and form filter and equipment plugging compounds.
NAPHTHENES (CYCLOPARAFFINS)
Cycloparaffin hydrocarbons in which all of the available bonds of the carbon atoms are
saturated with hydrogen are called naphthenes. There are many types of naphthenes present in
crude oil, but, except for the lower-molecular-weight compounds such as cyclopentane and
cyclohexane, are generally not handled as individual compounds. They are classified according
to boiling range and their properties determined with the help of correlation factors such as the
KW factor or CI.

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Figure 2: Naphthenes in Crude oil
AROMATICS
The aromatic series of hydrocarbons is chemically and physically very different from the
paraffins and cycloparaffins (naphthenes). Aromatic hydrocarbons contain a benzene ring which
is unsaturated but very stable and frequently behaves as a saturated compound.
The cyclic hydrocarbons, both naphthenic and aromatic, can add paraffin side chains in
place of some of the hydrogen attached to the ring carbons and form a mixed structure. These
mixed types have many of the chemical and physical characteristics of both of the parent
compounds, but generally are classified according to the parent cyclic compound.
Figure 3: Aromatic Hydrocarbons in Crude oil

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2. NON-HYDROGENCARBON COMPOUNDS
SULFUR COMPOUNDS
Sulfur in crude oils is mainly present in the form of organosulfur compounds. Hydrogen
sulfide is the only important inorganic sulfur compound found in crude oil. Its presence, however,
is harmful because of its corrosive nature. Organosulfur compounds may generally be classified
as acidic and non-acidic. Acidic sulfur compounds are the thiols (mercaptans). Thiophene, sulfides,
and disulfides are examples of non-acidic sulfur compounds found in crude fractions.
Examples of some sulfur compounds from the two types are:
A. ACIDIC SULFUR COMPOUNDS
B. NON-ACIDIC SULFUR COMPOUNDS
Because many organic sulfur compounds are not thermally stable, hydrogen sulfide is
often produced during crude processing. High-sulfur crudes are less desirable because treating
the different refinery streams for acidic hydrogen sulfide increases production costs.
Most sulfur compounds can be removed from petroleum streams through hydro
treatment processes, where hydrogen sulfide is produced and the corresponding hydrocarbon
released. Hydrogen sulfide is then absorbed in a suitable absorbent and recovered as sulfur.

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NITROGEN COMPOUNDS
Organic nitrogen compounds occur in crude oils either in a simple heterocyclic form as in
pyridine (C5H5N) and pyrrole (C4H5N), or in a complex structure as in porphyrin. The nitrogen
content in most crudes is very low and does not exceed 0.1 wt%. In some heavy crudes, however,
the nitrogen content may reach up to 0.9 wt %. Nitrogen compounds are more thermally stable
than sulfur compounds and accordingly are concentrated in heavier petroleum fractions and
residues. Light petroleum streams may contain trace amounts of nitrogen compounds, which
should be removed because they poison many processing catalysts.
During hydrotreatment of petroleum fractions, nitrogen compounds are
hydrodenitrogenated to ammonia and the corresponding hydrocarbon.
Nitrogen compounds in crudes may generally be classified into basic and non-basic
categories. Basic nitrogen compounds are mainly those having a pyridine ring, and the non-basic
compounds have a pyrrole structure. Both pyridine and pyrrole are stable compounds due to their
aromatic nature.
A. BASIC NITROGEN COMPOUNDS
B. NON-BASIC NITROGEN COMPOUNDS
Porphyrins are non-basic nitrogen compounds. The porphyrin

ring system is composed of four pyrrole rings joined by =CH- groups.
The entire ring system is aromatic. Many metal ions can replace the
pyrrole hydrogens and form chelates. The chelate is planar around
the metal ion and resonance results in four equivalent bonds from the
nitrogen atoms to the metal. Almost all crude oils and bitumens
contain detectable amounts of vanadyl and nickel porphyrins. The
structure of porphyrin is shown.

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OXYGEN COMPOUNDS
Oxygen compounds in crude oils are more complex than the sulfur types. However, their
presence in petroleum streams is not poisonous to processing catalysts. Many of the oxygen
compounds found in crude oils are weakly acidic. They are carboxylic acids, cresylic acid, phenol,
and naphthenic acid.
Naphthenic acids are mainly cyclopentane and cyclohexane derivatives having a
carboxyalkyl side chain. Naphthenic acids in the naphtha fraction have a special commercial
importance and can be extracted by using dilute caustic solutions. The total acid content of most
crudes is generally low, but may reach as much as 3%, as in some California crudes. Non-acidic
oxygen compounds such as esters, ketones, and amides are less abundant than acidic
compounds. They are of no commercial value.
A. ACIDIC OXYGEN COMPOUNDS
B. NON-ACIDIC OXYGEN COMPOUNDS
3. METALLIC COMPOUNDS
Many metals occur in crude oils. Some of the more abundant are sodium (Na), calcium
(Ca), magnesium (Mg), aluminium (Al), iron (Fe), vanadium (V), and nickel (Ni). They are present
either as inorganic salts, such as sodium and magnesium chlorides, or in the form of
organometallic compounds, such as those of Ni and V (as in porphyrins).
Calcium and magnesium can form salts or soaps with carboxylic acids. These compounds
act as emulsifiers, and their presence is undesirable. Although metals in crudes are found in trace
amounts, their presence is harmful and should be removed. When crude oil is processed, sodium
and magnesium chlorides produce hydrochloric acid, which is very corrosive. Desalting crude oils
is a necessary step to reduce these salts. Vanadium and nickel are poisons to many catalysts and
should be reduced to very low levels. Most of the vanadium and nickel compounds are
concentrated in the heavy residues. Solvent extraction processes are used to reduce the
concentration of heavy metals in petroleum residues.

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Appreciable property differences appear between crude oils as a result of the variable
ratios of the crude oil components. For a refiner dealing with crudes of different origins, a simple
criterion may be established to group crudes with similar characteristics.
Crude oils can be arbitrarily classified into three or four groups depending on the relative
ratio of the hydrocarbon classes that predominates in the mixture. The three types of crudes are:
1. Paraffinic the ratio of paraffinic hydrocarbons is high compared to aromatics and
naphthenes
2. Naphthenic the ratios of naphthenic and aromatic hydrocarbons are relatively
higher than in paraffinic crudes
3. Asphaltic contain relatively a large amount of polynuclear aromatics, a high
asphaltene content, and relatively less paraffins than paraffinic crudes
Paraffinic oils are prepared by solvent separation techniques from paraffinic crude oil,
which gve good yield of high viscosity index stocks containing a lot of was. Paraffinics have good
thermal and oxidative stability and good-high temperature viscosity characteristics.
Naphthenic oils derived from naphthenic crude are very available and inexpensive. They
yield medium viscosity indiex and low viscosity index base oils with very little wax and naturaly
low pour points.
It is called asphaltic crude if the distillation residue contained less than 2% wax.
Petroleum formation occurs by various hydrocarbons combining with certain minerals

such as sulfur under extreme pressure. Modern day scientists have proven that most, if not
all petroleum fields, were created by the remains of small animal and plant life being compressed
on the sea bed by billions of tons of silt and sand several million years ago.
When small sea plants and animals die they will sink, they will then lie on the sea bed
where they will decompose and mix with sand and silt. During the decomposition process tiny
bacteria will clean the remains of certain chemicals such as phosphorus, nitrogen and oxygen.

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This leaves the remains consisting

of mainly carbon and hydrogen. At the
bottom of the ocean there is insufficient
oxygen for the corpse to decompose
entirely. What we are left with is the raw
materials for the formation of petroleum.
The
partially
decomposed
remains will form a large, gelatinous
mass, which will then slowly become
covered by multiple layers of sand, silt
and mud. This burying process takes
millions of years, with layers piling up one
atop another.
As the depth of the sediment build up increases the weight of the sand and silt pressing
down on the mass will compress it into a layer which is much thinner than the original. Finally,
when the depth of the buried decomposing layer reaches somewhere around 10,000 feet the
natural heat of the earth and the intense pressure will combine to act upon the mass. The end
result, over time, is the formation of petroleum.
With petroleum formation the actual temperature applied to the original organic mass is
critical in determining the overall properties of the resulting petroleum. Typically lower
temperatures during petroleum formation will result in thicker, darker raw petroleum deposits,
the most solid of which being a bitumen substance.
If the heat applied during the formation of petroleum process fluctuates too much then
gas will be produced, often separating from the petroleum, sometimes remaining mixed with the
raw oil. If temperatures are too high, in the somewhere over 450 degrees Fahrenheit then the
original biomass will be destroyed and no gas or petroleum is formed.
As the mud and silt above the deposit become heavier and the forces placed upon the silt
and mud begin to change the bottom layers of the compressing layer above the petroleum then
it will turn into shale. As the shale forms the oil will be forced out of its original area of formation.
The raw petroleum then moves to a new rock formation, usually termed a reservoir rock, and lays
trapped until it is accessed in some way.
The formation of naturally occurring raw petroleum takes millions of years, certainly far
longer than can be deemed renewable, yet mankind has managed to almost complete deplete
the world supply in little more than a century.
At its base, petroleum is a fossil fuel, which means it is derived from the remains of organic
material. In other words, petroleum results from a number of chemical reactions that occur to
material that was once alive. In most cases, liquid petroleum was once zooplankton or algae that
settled to the bottom of a sea or lake and was then buried under sediment. The sediment ensured

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that no oxygen was able to reach the decaying organic matter and this set the stage for the
formation of oil.
In most cases, the organic matter goes through several changes that take thousands or
millions of years. As sediment continues to pile up and increase pressure on the organic matter, it
is first changed into a waxy solid called kerogen. In fact, this material is currently being mined in
many fracking processes because it can, through chemical conversion, be made into liquid
petroleum and natural gas.
Kerogen is formed in a process called diagenesis, the chemical form of which is outlined in the
following diagram.
Essentially, heat and pressure break down organic compounds like humin and various
other organic acids, lipids, proteins, and carbohydrates to form long hydrocarbon chains called
geopolymers. These geopolymers are the basis of kerogen. Diagenesis is a critical mechanism in
the formation of coal and is just the first of several processes necessary to convert solid
hydrocarbon to liquid petroleum.
The addition of greater heat is necessary to convert kerogen to liquid or gaseous
hydrocarbons and the process takes time. The combination of high temperature and pressure is
necessary to carry out the endothermic process known as hydrocarbon pyrolysis. It is sometimes
referred to as cracking as well.
Hydrocarbon pyrolysis is irreversible, which means that once a liquid hydrocarbon is formed, it is
not converted back into solid form. This is why oil deposits can exist below the surface for millions
of years unchanged. Liquid hydrocarbons are really just formed by breaking longer chains. It is a
general rule in chemistry that the larger a molecule is, the more likely it is to be solid and the
smaller a molecule is, the more likely it is to be a liquid or gas. Long hydrocarbon chains are solid,
while medium chains (5 25 carbons long) are liquid. Smaller chains (less than 5 carbon atoms),
tend to be gases. That is why gasoline at 7 or 8 carbons is a liquid while methane, with only one
carbon atom, is a gas.
Versions of cracking are used in industry to create everything from charcoal to carbon
fiber to biofuels. The process is often used in oil refineries to breakdown the less valuable heating
oil molecules (25 carbons per chain on average) into smaller, more valuable 7 and 8 chain
molecules that can be sold as gasoline.
The Importance of Oxygen

Oxygen is critical to many processes and its absence is absolutely critical to the formation
of hydrocarbons. When oxygen is present, several things can happen. At the surface, when
organic material is first laid down, the presence of oxygen means the presence of bacteria that
can quickly consume the decaying material before it has a chance to be buried by sediment. This
is why most petroleum deposits were once at the bottom of a sea or lake, often one with very low
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oxygen content, where sediment had time to accumulate before too much decay could occur in
the presence of oxygen.
If oxygen is present, besides disrupting the early stages of kerogen formation completely, it can
also lead to the formation of acids and other molecules rather than strict hydrocarbon. These are
usually harmful to the formation of hydrocarbon and can even reverse formation that has already
occurred.
Finally, levels of oxygen that are not high enough to prevent hydrocarbon formation can
still be a problem Low levels of oxygen can lead to the buildup of toxic nitrogen oxide compounds
as well as sulfuric and sulfurous acids. All these act as contaminants in petroleum, making it more
expensive and difficult to refine.
PHILEX PETROLEUM CORPORATION

Philex Petroleum is an upstream oil and gas company incorporated in the Philippines in
December 2007 as a wholly-owned subsidiary of Philex Mining Corporation. After the distribution
of approximately 36% of Philex Petroleum shares to Philex Mining shareholders as property
dividends, Philex Petroleum listed its shares on the second board of the Philippine Stock Exchange
under the Amended Rules on Listing by Way of Introduction of the PSE on September 12, 2011.
The Company has interests in various petroleum service contracts in the Philippines and
Peru held directly and through its major subsidiaries, Pitkin Petroleum Plc (Pitkin) and Forum
Energy Plc (Forum).
These direct interests in Philippine petroleum service contracts include (1) a 50% operating
interest in SC 75 Northwest Palawan, (2) an overriding royalty interest (ORRI) of 1.65% in SC 6
Cadlao, and (3) a 5.56% interest SC 6A Octon; all located in the Northwest Palawan Basin.
PXP holds a 53.43% controlling interest in Pitkin, an international upstream oil and gas
company registered in the United Kingdom with operations in Peru and in the Philippines. The
Pitkin assets in Peru include: (a) a 25% participating interest in Peru Block Z-38 located in offshore
Tumbes Basin and (b) a 100% operating interest in Peru Block XXVIII located in onshore Sechura
Basin. Its Philippine assets include: (a) a 70% operating interest in SC 74 Northwest Palawan and
(b) a 35% participating interest in SC 53 Mindoro.
Additionally, PXP holds a 60.49% voting interest in Forum, with 36.44% held directly and
24.05% held indirectly through a 51.24%-owned subsidiary, FEC Resources, Inc., a Canadian
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public company registered with the US Securities and Exchange Commission, the Alberta
Securities Commission, and the British Columbia Securities Commission and quoted in North
America. Forum, a UK incorporated company with focus on the Philippines, has: (a) a 70%
operating interest in SC 72 Recto Bank which covers the Sampaguita natural gas discovery in
offshore West Palawan, held through Forum (GSEC 101) Limited, (b) a 100% operating interest in
SC 40 North Cebu held through Forum Exploration, Inc., and (c) minority interests in the SC 6 and
SC 14 sub-blocks in offshore Northwest Palawan, including a 2.27% interest in the producing
Galoc field, held through Forum Energy Philippines Corporation.
PHILIPPINE NATIONAL OIL COMPANY EXPLORATION CORPORATION

PNOC Exploration Corporation is the upstream oil, gas and coal subsidiary of the stateowned Philippine National Oil Company. A government owned and controlled corporation, the
Company was incorporated on 20 April 1976 and is mandated by the government through
the Department of Energy (DOE) to take the lead in exploration, development and production of
the countrys oil, gas and coal resources. The Company was listed in the Makati Stock Exchange
and the Manila Stock Exchange in 1976 and 1977, respectively.
At present, PNOC EC has seven petroleum Service Contracts (SCs), namely: SC 37 (Cagayan
Basin), SC 38 (Malampaya), SC 47 (Offshore Mindoro), SC 57 (Calamian), SC 58 (West Calamian),
SC 59 (West Balabac) and SC 63 (East Sabina). The Company is the operator in SC 37, SC 47 and
SC 63 and a non-operating partner in SC 38, SC 57, SC 58 and SC 59.
PNOC EC used to operate the very first natural gas facility in the country- the San Antonio
Gas Power Plant within SC 37 before joining the Malampaya consortium (SC 38) in 1999 with a
10% stake. Malampaya is the countrys single biggest investment of its kind.
PNOC EC also holds six (6) Coal Operating Contracts (COCs), namely: COC 41 (Malangas),
COC 122 (Isabela), COC 141 (Isabela), COC 184 (Agusan del Sur), COC 185 (Zamboanga Sibugay)
and COC 186 (Zamboanga Sibugay). As part of its coal business, the company also trades coal
from other sources through its two coal terminals located in Malangas and Cebu.
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PILIPINAS SHELL PETROLEUM CORP.

The Shell companies in the Philippines
(SciP) represent various companies operating in
oil and gas exploration, extraction, refining and
delivery to consumers. Commencing its
operations in 1914, SciP has grown to be one of
the Philippines largest investors, directly
employing over 4,000 people nationwide.
SciP is part of Shell, a global group of
energy
and
petrochemicals
companies
employing approximately 93, 000 people and operating in more than 90 countries and territories.
Shell helps meet the worlds growing demand for energy, aiming to do so in economically,
environmentally and socially responsible ways.
Pilipinas Shell Petroleum Corporation (PSPC) is involved in the manufacture, marketing,
sales, supply and distribution of oil productsserving customers in almost every field of transport,
commerce and industry with its wide range of high quality fuels, lubricants, liquefied petroleum
gas, aviation fuel, bitumen and other specialty products. Pilipinas Shell commenced operations of
its first crude distiller in Tabangao, Batangas in 1962 (now an oil refinery since 1994). Shell also
opened a refrigerated LPG terminal in 1983, the first of its kind in Asia operated by Shell Gas
Eastern, Inc. with trading handled in the region by Shell Gas Trading Asia Pacific.
In the business of oil and gas exploration and production, Shell Philippines Exploration
B.V. (SPEX) operates the Malampaya Deep Water Gas-to-Power Project together with its joint
venture partners. Malampaya represents the largest and most significant industrial investment in
the history of the Philippines. It heralded the birth of the countrys natural gas industry, enabling
the supply of clean, environment-friendly fuel and providing 2,700 megawatts of power to Luzon
for a period of 20 years. This represents roughly 40-45% of Luzons power generation
requirements, providing the country a considerably long-term revenue stream to the government,
in addition to considerable foreign exchange savings.
PETRON CORPORATION
Petron Corp. (PSE: PCOR) is the largest oil refining and marketing company in the Philippines,
supplying more than a third of the countrys oil requirements.
Petron operates a refinery in Limay, Bataan, with a rated capacity of 180,000 barrels per day
(29,000 m3/d). From the refinery, Petron moves their products mainly by sea to 32 depots and
terminals in the country. They operate a lube oil blending plant at their Pandacan Terminal, where it
manufactures lubes and greases.
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Petron is public company listed on the Philippine Stock Exchange.

A 51-percent stake is owned by the Philippine food and beverage
giant San Miguel Corporation (SMC) while the Ashmore Group owns 40
percent. The remaining sharesabout 9 percentare held by the public.
The company's ISO-14001-certified refinery processes crude
oil into a full range of petroleum products, including LPG, gasoline,
diesel, jet
fuel, kerosene, industrial
fuel
oil, solvents, asphalts and
mixed xylene.
Petron's largest client is in the power sector. They also supply jet
fuel at key airports to international and domestic carriers. Through more
than 1,200 service stations, they retail gasoline, diesel and kerosene to
motorists and public transport operators. They also sell their LPG
brand Gasul to households and other consumers through an extensive dealership network.
Petron is expanding to non-fuels businesses which include convenience store brand "Treats".
They have partnered with major fast-food chains, coffee shops, and other consumer services to give
customers a one-stop full service experience. They are also putting up additional company-owned and
operated service stations in strategic locations. Petron also opened its first fuel additives blending plant
in the Asia-Pacific region at the Subic Bay Freeport Zone in November 2008. The plant has the capacity
to blend 12,000 metric tons (MT) of fuel additives per year. When used in gasoline, diesel, or fuel
oil, fuel additives improve efficiency, boost engine performance, and benefit the environment by
reducing harmful emissions.
The PetroFCC, the first "cracking" unit of its kind in the world, converts black products (fuel oil)
into higher-value LPG, gasoline, and diesel, and yields a higher level of the petrochemical feedstock
propylene than typical FCC units.
CHEVRON PHILIPPINES
Chevron is one of the largest investors in the Philippines, with more than $2 billion in
capital investments. It markets Caltex fuels, lubricants and other petroleum products.
Chevrons geothermal operations in the Philippines help make us one of the worlds
leading producers of geothermal energy. It holds an interest in the Malampaya gas-to-power
project, the first natural gas development and largest industrial project in the Philippines.
Chevron operates through five subsidiaries in the Philippines. Our
upstream companies are Chevron Malampaya LLC, Chevron Geothermal
Services Company and Chevron Kalinga Ltd. Our downstream company is
Chevron Philippines Inc. It also operates a business processes support
organization through Chevron Holdings Inc.
Chevron has a 40 percent interest in Philippine Geothermal
Production Company, Inc. (PGPC). PGPC develops and produces steam
energy for the third-party-owned and -operated Tiwi and Mak-Ban
geothermal power plants in southern Luzon. They have a combined
generating capacity of 692 megawatts.
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1.
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ALCORN GOLD RESOURCES CORPORATION

ALCORN (PRODUCTION) PHILIPPINES, INC.
ALTISIMA ENERGY, INC.
ALSONS CONSOLIDATED RESOURCES, INC.
ANGLO-PHILIPPINE OIL & MINING CORPORATION
BASIC CONSOLIDATED, INCORPORATED
COPLEX RESOURCES NL MR. KENNETH J. FELLOWES
FORUM EXPLORATION, INCORPORATED
GLOBAL EXPLORATION (GLOBEX) INC.
JAPAN PETROLEUM EXPLORATION CO., LTD. (JAPEX)
NIDO PETROLEUM PHILIPPINES PTY. LTD.
NOVUS PETROLEUM LIMITED
ORIENTAL PETROLEUM & MINERALS CORP.
PACRIM ENERGY LIMITED
PANCONTINENTAL OIL & GAS N.L.
PETROENERGY RESOURCES CORPORATION
PETROZ N. L.
PHILODRILL CORPORATION
PHOENIX ENERGY CORPORATION
PREUSSAG ENERGIE GMBH
SAN JOSE OIL COMPANY, INCORPORATED
SEAFRONT RESOURCES CORPORATION
SOUTH CHINA RESOURCES, INC.
SOUTHWEST RESOURCES
STERLING ENERGY
TEXACO PHILIPPINES INC.
TRANS-ASIA OIL & ENERGY DEVELOPMENT CORP.
UNOCAL SULU, LTD.
VULCAN INDUSTRIAL & MINING CORPORTION

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METHODS FOR OIL EXPLORATION

OIL
Oil is a fossil fuel - formed many million years ago - generated from tremendous amounts
of microscopic organisms, which have accumulated at the bottom of seas, lakes and
ponds; covered by thousands of feet of sediments; and through complex processes
involving the interaction of temperature and pressure in the right physico-chemical
environment throughout geologic time, the organic matter is converted to petroleum
droplets. These droplets stay in the host rock (known as source rocks), until they are
expelled.
1. SEISMIC SURVEYS
Seismic surveys are done by sending high-energy sound waves into the ground
and measuring how long they take to reflect back to the surface. Since sound travels
at different speeds as it passes through different materials, computers can use seismic
data to create a 3-D map of what lies below the surface.
PRINCIPLE OF OPERATION
When a seismic wave travelling through the Earth
encounters an interface between two materials with different
acoustic impedances, some of the wave energy will reflect off
the interface and some will refract through the interface. At its
most basic, the seismic reflection technique consists of
generating seismic waves and measuring the time taken for the
waves to travel from the source, reflect off an interface and be
detected by an array of receivers (or geophones) at the surface. Knowing the travel times
from the source to various receivers, and the velocity of the seismic waves, a geophysicist
then attempts to reconstruct the pathways of the waves in order to build up an image of
the subsurface.
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2. GRAVITY AND GEOMAGNETIC SURVEYS

While seismic exploration remains the primary
method of exploring for petroleum, use of gravity and
magnetic methods has continued to expand, based on
their contribution to reliable evaluations (and recent
discoveries) in deeper, more challenging environments
such as sub-salt structures and deep sea.
These relatively inexpensive techniques can identify
potential oil and natural gas bearing sedimentary basins
and structures. High-resolution aero-magnetic surveys done by special aircraft can also
show fault traces and differentiate between different rock types near the surface.
By gathering geophysical data to narrow the search area within large fields, exploration
crews can refine their targets and apply seismic techniques more efficiently. Combining
seismic and gravity methods enables oil explorers to better define and focus projects early
on, and minimize the risk of conducting expensive investigation before potential is
determined.
PRODUCTION
As of end June 2011, the total oil production from the different fields totalled to
about 63,208,020.12 barrels. The four (4) existing producers, Nido, Matinloc, North
Matinloc and Galoc fields, produced 18,823,407 barrels, 12,137,881 barrels, 2,219,353
barrels and 8,931,848 barrels respectively.
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The first 3 fields are under the operatorship by Philodrill Corporation while Galoc
is being managed by Galoc Production Company (GPC). All of these producing fields
under Service Contract No. 14 are located in offshore NW Palawan. There are two (2)
other fields that are being evaluated for rehabilitation, namely; Cadlao and West
Linapacan fields that have produced 11,235,334 barrels and 8,528,118 barrels of oil
respectively.
Shell Philippines Exploration B.V. (SPEX) produced from the Malampaya field (SC
38) a cumulative total of 1,083,551.282 mmscf of natural gas and 48,191,493.636 barrels
of condensate from October 2001 until 30 June 2011. Another field, the Libertad gas
field, located in Bogo, northern Cebu is under development and expected to produce
natural gas as fuel to power a 1 Megawatt turbine for domestic electric generation in the
area. The Libertad gasfield is under SC40 being operated by Forum Energy Philippines,
Inc.
EXPLORATION
The geophysical survey over the sixteen (16) sedimentary basins in the country
totalled to about 519,841.73 line-kilometers (ln-kms) of 2D and 16,948.56 squarekilometers (sq-kms) of 3D seismic data.
For this year, Forum Energy Philippines, under SC72 acquired a total of 564.93 sqkms of 3D data over Recto Bank in the West Philippine Sea while NorAsian Energy Ltd.
acquired 228.8 sq-kms of 3D data over the Camotes Sea under SC69. Meanwhile, 2D
seismic acquisition for 2011 totalled to 2,202.28 ln-kms. This seismic data was acquired by
Forum Energy over Recto Bank in the area of SC72. Several other exploration companies
are planning to conduct geophysical survey over their respective SC areas this year.
For the year 2011, two (2) wells were drilled in onshore northwest Leyte and
offshore NW Palawan. NorAsian Energy Ltd drilled Duhat-1/1A well which is located in
Sitio, Kalunasan, Barangay Banat-1, San Isidro, Leyte. On the other hand, Nido Petroleum
Philippines, operator of SC54B drilled Gindara-1 well located in offshore NW Palawan.
Several other exploration drilling activities are expected to be undertaken in the near
future.
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Intramuros, Manila
MALAMPAYA GAS FIELD
SHELL PHILIPPINES EXPLORATION B.V. (SPEX)

The Malampaya gas field is
a natural gas field located in the West
Philippine Sea. It was discovered in
1992
and
developed
by Shell
Philippines Exploration B.V. Royal
Dutch Shell now operates it on behalf
of
partners Chevron
Corporation and Philippine National
Oil Company Exploration Corporation.
The field began production in 2001
and produces natural gas and natural
gas condensate. The total proven reserves of the Malampaya gas field are around 3.7
trillion cubic feet (105 billion m), and production is slated to be around 410 million cubic
feet/day (11.7105m).
HISTORY
The area surrounding the Spratly Islands is said to be rich in yet unexplored oil and
gas fields, and hence, remains controversial.
The Philippines began exploring the areas west of Palawan for oil in 1970.
Exploration in the area began in Reed Bank/Tablemount (Reed Bank is the largest
seamount within the Spratly Islands)
in 1976, gas was discovered
following the drilling of a well.
However, China's complaints halted
the exploration.
Today,
Malampaya
oil
platform is the only operational oil
platform in the Philippines. It is
extracting natural gas from the
Camago-Malampaya oil leg (CMOL)
(or simple Malampaya Field), located
80 kilometres (50 mi) west of
northern Palawan. It is not claimed by other countries. It contains 3.7 trillion cubic feet
(1.01011 m3) of natural gas reserves. The Malampaya Project began the Philippines'
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Intramuros, Manila
natural gas industry and enabled the supply of at least 2,700 megawatts of power for a
period of at least 20 years starting 2002. The gas is conveyed through a 500 km pipeline
from the field to Batangas City where it is fed into the generation system.
In December 2001, an extended well test of the thin oil rim beneath the field
initially yielded about 8 million barrels (1,300,000 m3) of oil per day (bpd). It is also
believed to be the deepest horizontal subsea well test undertaken in the world at a depth
of about 850 m.
The upstream component of the $4.5 billion USD Malampaya gas-to-power project
was jointly developed by Shell Philippines Exploration B.V. (SPEX), Chevron
Texaco and PNOC EC. The project was formally inaugurated on October 16, 2001. Shell
Philippines Exploration owns 45% of the project, ChevronTexaco owns 45% and PNOCEC owns 10%. Malampaya is expected to provide substantial long-term revenue of
between $810 billion USD to the Philippine government over its life span. Other sites
eyed by PNOC-EC west of Palawan are the Calamian, West Calamian, West Balabac, and
East Sabina sites.
Another oil field being explored today is Reed Bank, which exploration was halted
in 1980's after China's objections. The concession is currently awarded to Forum Energy
plc, a UK-based oil, gas and coal company. The Reed Bank concession is located in the
South China Sea west of Palawan Island. The license is located to the southwest of the
Shell-operated Malampaya Gas Field.Unlike Malampaya, Reed Bank is claimed by the
People's Republic of China, Republic of China, and Vietnam. There is still no news on
whether these countries are disputing this exploration or not. In March 2011, two Chinese
vessels chased off the Veritas Voyager, a survey ship hired by Forum Energya UK-based
company with a portfolio of projects in the Philippines. Forum Energy intends to return
to Reed Bank in 2012 to explore for energy resources. The U.S. military has also signalled
its return to the area, with war games scheduled in March with the Philippine navy near
Reed Bank.
CURRENT DEVELOPMENT
Since it began operations in 2001, the Malampaya project has produced cleanerburning natural gas for three power plants in Batangas, which have a combined
generating capacity of 2,700 megawatts (Shell, nd).
The project is now in its next stages of development, Malampaya Phases
2 and 3, which aim to maintain the level of gas production to ensure a steady supply of
natural gas to power the Luzon electricity grid. Luzon is the largest and most populous
island in the Philippines (Shell, nd).
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Two additional production wells were successfully installed in 2013, marking the
completion of Malampaya Phase 2. Malampaya Phase 3 involves the design, fabrication
and installation of a new depletion compression platform, which will start production in
2015 (Shell, nd).
GALOC OIL FIELD

Located 37 miles (60 kilometers) northwest of
Palawan Island in the Philippines, the Galoc oil
field is situated in the North West Palawan
Basin on Block C of Service Contract 14. A
sandstone reservoir holding approximately 10
MMbo in proven reserves and 23.5 MMbo in
proven and probable reserves, the field is
located at a total depth of 6,890 feet (2,100
meters) in water depths ranging from 951 to
1,312
feet
(290
to
400
meters).
Galoc
oil
column
Discovered in 1981, the field was initially

appraised in 1988 to be non-commercial.
Subsequent 3-D seismic data was acquired in
1997, and taking into account innovations in
drilling techniques, the 187-foot (57-meter)
was
deemed
commercially
viable.
Serving as the operator of the field, Galoc Production Company holds a 58.29% interest
in the field. The JV company is wholly owned by Otto Energy. Galoc project partners
include Nido Petroleum with 22.28%, Philodrill Corp. with 7.03%, Oriental
Petroleum/Linapacan Oil Gas & Power with 7.57%, Forum Energy with 2.27%, Alcorn
Gold Resources with 1.53%, and PetroEnergy Resources with 1.03%.
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Intramuros, Manila
FIELD DEVELOPMENT
A plan of development was submitted to Philippine authorities on Dec. 15, 2005, and the
project plan was approved on March
15, 2006. The first field to be developed
in the country since 1992, Galoc was
brought into production through
subsea wells tied to an FPSO.
For an investment of $120 million, the
first phase of development included
two horizontal subsea wells, a short
subsea pipeline, single-leg multi-riser
mooring system and the Rubicon
Intrepid FPSO. The two wells, Galoc-3
and Galoc-4, as well as an appraisal pilot well, were drilled from a single wellhead cluster
by the Energy Searcher drillship in late 2007 and early 2008.
Flowing production into a single flowline, the wells have a daily production capacity of
25,000 bopd along with associated gas. Well engineering, procurement and construction
was
awarded
to
Advanced
Well
Technologies.
The riser system comprises a flowline riser, as well as a control, chemical and service
umbilical riser. Boasting remotely operated subsea equipment, field operations are
controlled from the Rubicon Intrepid FPSO by a 30-person crew.
A dynamically positioned FPSO, the vessel was converted from a shuttle tanker by
Rubicon Offshore. With a 300,000 barrel storage capacity, the Rubicon Intrepid FPSO
houses a single-lift processing module with the production capacity of 25,000 bopd and
40 MMcf/d (1.1 MMcm/d) of associated gas. Delivered by Expro, the processing system
includes two stages of separation, as well as a system for water treatment.
Moored at a water depth of 1,050 feet (320 meters), the Rubicon Intrepid FPSO's riser and
mooring systems allow for rapid disconnection of the FPSO should adverse weather
threaten the area.
In the process of reconnecting the FPSO after the typhoon's passage, it was
discovered that the retrieval line and a section of the riser system were irreparably
damaged. Additionally, the subsea equipment was found to have accelerated corrosion
in the hydraulic fittings, and these required replacement.
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Intramuros, Manila
While a set-back in the field development time line, these issues were solved quickly and
safely.
Production commenced at Galoc on Oct. 9, 2008. Although held up by the
passage of a typhoon, the field development was completed in 23 months.
Quickly reaching a daily production rate of 18,000 to 20,000 bopd, crude oil is offloaded
to shuttle tankers.
With a current life expectancy of 2 to 6 years, a second phase of development is
being evaluated. This phase would tie-back more production wells to the existing
infrastructure to both boost production and stabilize pressure of the field.
NIDO OIL FIELD

Nido is, by far, the oldest producing field
in the country. It started production in
1979 which is also the highest oil
production level the country has ever
attained.
The Nido oil field is located in
Block A of Service Contract 14 (SC
14), at the southern end of the North
West Palawan Basin, approximately 60
km west of
Nido-A was discovered in July 1977 with the drilling of Nido-A1. Nido-B was
discovered in January 1978 with the drilling of Nido-B1. Both fields comprise pinnacle or
atoll type carbonate reefs generally of the Lower Miocene age. In mid-1979 three
additional development wells (Nido-A2, -B2 and -B3) were completed and a production
platform was installed at Nido-A and Nido-B standing in waters of 43 metres and 78
metres, respectively.
Both fields were brought into production in February 1979 with production
peaking in mid to late 1979 at over 13,000 bopd and 29,000 bopd for Nido-A and NidoB, respectively. Both fields were switched to a cyclic production regime in mid-1984. Total
oil production from both fields has passed 18.5 million barrels of oil (Nido Petroleum LTD).
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Intramuros, Manila
MATINLOC OIL FIELD

The Matinloc oil field is located in
Block B of Service Contract 14 (SC
14) approximately 50 km northwest of
Palawan Island and 54 km north of the
Nido oil field in the Philippines.
Matinloc is situated in 25 metres
of water and was discovered in January
1979 with the drilling of
the wildcat Matinloc-1 well, intersecting a carbonate reef build-up. The field is mapped as
a four-way closure with a gross hydrocarbon column of more than 91 metres.
Matinloc-2 and Matinloc-3 were drilled directionally from the Matinloc-1 location
in early 1980 and 1982, respectively. The Matinloc production platform was installed in
June 1982 and production commenced in July of that same year with a peak production
rate of 6,800 bopd. Cyclic production began on Matinloc in January 1997.
Since production start-up Matinloc has produced over 12 million barrels of oil with
an average crude oil gravity of 43 API. The Matinloc crude is marketed to Philippine
refineries together with the oil produced at the Nido oil fields.
RECENT ACTIVITIES ON MATINLOC AND NIDO OIL FIELD
The Nido and Matinloc oil fields continued to produce oil on a cyclical basis. Oil
production from these fields during 2013 totalled 36,602 (9,070 bbls net to Nido).
A total of 40,970 bbls (10,308 bbls net to Nido) was lifted and sold during 2013,
with proceeds from liftings of A $0.4 million received in the quarter.
The Operator of the block is continuing to evaluate the option of developing the
1X1 oil discovery, which straddles both SC 14A and SC 54A, via the Nido A platform. Nido
is also in discussions with parties concerning the potential divestment of SC 14A and B.
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Intramuros, Manila
TINDALO OIL FIELD

The Tindalo oil field is situated in the
Northwest
Palawan
Basin,
offshore
Philippines within service contract 54 Block
A. The block covers an area of 862km. It is
owned by Nido Petroleum Philippines
(42.4%), Yilgarn
Petroleum
Philippines
(30.1%),
Trafigura Ventures III BV (15%) and TG

World Energy Corp (12.5%).
The Tindalo field was discovered in
October 2008. The discovery was
made by exploration well Tindalo-1, drilled at water depth of 100m. The drilling
intersected an oil column of 124m-144m. The oil was found at Miocene carbonate
reservoir. The well was plugged and suspended for production in future.
The field was estimated to have reserves of up to 24.5 million barrels of oil. First
production from the field commenced in May 2010 at a peak rate of
18,689 barrels of oil per day (bopd). An extended well test program commenced in June
2010 to test well performance and prepare a long-term reservoir management plan for
the field.
A workover of the Tindalo-1 well with the drilling of a sidetrack was planned to
increase oil production and reduce water production. The sidetrack was completed in
September 2010 and the workover of Tindalo-1 well was completed in November 2010.
In December 2010, testing of the Tindalo sidetrack well showed declining oil production
and higher water cuts. The
Tindalo-1 well was plugged and abandoned in January 2011 and entire infrastructure at
the field was demobilized.
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Intramuros, Manila
WHAT HAPPENED TO GUIMARAS?

The Guimaras oil spill occurred in the Panay Gulf on August 11, 2006 when the oil tanker
M/T Solar 1 sank off the coast of Guimaras and Negros islands in the Philippines, causing
what is considered as the worst oil spill in the country.
The oil tanker M/T Solar 1, carrying more than two million liters of bunker fuel, sank
during a violent storm approximately 20.5
kilometres (12.7 mi) off the southern coast
of Guimaras at around midnight on
August 11, 2006, causing some 500,000
litres (110,000 imp gal; 130,000 US gal) of
oil to pour into the gulf, that traveled up
through the Guimaras Strait and Iloilo
Strait. Siphoning the remaining 1.5 million
liters from the sunken tanker, at a depth of
more than 600 metres (2,000 ft), was
scheduled for March 2007.
The oil spill adversely affected marine
sanctuaries and mangrove reserves in
three out of five municipalities in Guimaras Island and reached the shores
of Iloilo and Negros Occidental. The oil spill occurred in the Guimaras Strait that connects
the Visayan Sea with the Sulu Sea, and is considered a rich fishing ground that supplies
most of the demand for the entire country. (NDCC, August 2006)
Haribon sent two biologists to Guimaras to assess the damage and talk to the affected
communities regarding their immediate needs. Haribon provided assistance particularly
for the long-term rehabilitation of the area. The government evacuated the affected
families who had been exposed to the toxic elements of the crude oil. According to
reports gathered in the field, people contracted skin diseases associated with these
elements.
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Intramuros, Manila
WELL COMPLETION
Well completion refers to the process of finishing a
well so that it is ready to produce oil or natural gas. In
essence, completion consists of deciding on the
characteristics of intake portion of the well in the targeted
hydrocarbon formation.
The purposes of well completion are:
Connect the reservoir to the surface so that fluids

can be produced from or injected into the reservoir
Provide a conduit for well stimulation treatments
Isolate the producing reservoir from other zones
Protect the integrity of the reservoir, especially in

unconsolidated formations
Provide a conduit to measure the changes in flow

rate and pressure needed to run a well test
TYPES OF COMPLETION
Figure 2. General Types of Well Completion. (a) Open Hole Completion (b) Liner Completion (c)
Perforated Completion
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Intramuros, Manila
Open Hole Completions

These are the most basic type and are only used in very competent formations that are
unlikely to cave in. An open hole completion consists of simply running the casing directly down
into the formation, leaving the end of the piping open without any protective filter.
Open hole completions were originally used in the early days of the petroleum industry
when most wells were drilled with cable tools. Normally, casing was run as the hole was drilled.
When the formation was penetrated and oil and gas began to flow, drilling ceased and the well
was produced as an open hole completion. As rotary rigs began to drill a majority of the wells, it
was still common to complete a well using an open hole completion. If the well needed to be
stimulated, nitroglycerine was used to rubbleize the formation near the wellbore. In a typical open
hole completion, casing is set prior to drilling into the producing interval. A non-damaging fluid
can then be used to drill into the pay section.
One important disadvantage of an open-hole completion is that production casing must
be set prior to drilling and logging the reservoir. If for some geological or engineering reason the
target formation is not productive, then money has been spent to set casing in a well that may be
plugged as a dry hole. Another disadvantage is the lack of control that occurs when an open hole
completion is made. One cannot control the flow of fluids from the reservoir into the wellbore nor
the injection profile in an open hole completion. In addition, if the formation is not competent,
sloughing zones can cave into the wellbore and restrict flow to the surface.
Perforated Completions
These consist of production casing run through the formation. The sides of this casing are
perforated, with tiny holes along the sides facing the formation, which allows hydrocarbons to
flow into the well hole while still providing a suitable amount of support and protection for the
well hole. In the past, bullet perforators were used. These were essentially small guns lowered
into the well that sent off small bullets to penetrate the casing and cement. Today, jet perforating
is preferred. This consists of small, electrically-fired charges that are lowered into the well. When
ignited, these charges poke tiny holes through the formation, in the same manner as bullet
perforating.
A perforated casing completion, is the most commonly used completion technique today.
The main advantage of this type of completion is that the well can be drilled and logged to total
depth prior to running and cementing production casing. By obtaining cores and logs of the
potential producing interval, one can estimate the economic value of that wellbore prior to
committing funds to complete the well. Another advantage of a perforated casing completion is
that it is easier to obtain a good cement job, compared to a liner completion. If the primary
cementing job is properly performed, one can selectively produce from and inject into the
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Intramuros, Manila
reservoir and isolate intervals as required. The production of an unconsolidated formation can be
accomplished by performing an inside gravel pack. Finally, the perforated casing completion is
quite adaptable to multiple completions and alternate completions.
Liner completions
These are similar to open hole completions in that casing must be set prior to drilling the
producing interval. The advantage of a liner completion is that the drilling fluid system can be
changed and a non-damaging fluid used to drill the pay interval. Several types of liner completions
are commonly employed in well completions. These include:
Slotted liner
Screen and liner
Cemented liner
Figure 3. Types of Liner Completion. (a) Slotted Liner (b) Screen and Liner (c) Cemented
Liner
The slotted liner completion is similar to an open hole completion and has all the major
advantages and disadvantages discussed for open hole completions. The only difference is that a
slotted liner is hung in the open hole interval to minimize sloughing of the formation into the well
bore.
A screen and liner completion is similar to the slotted liner completion in that a screen and
liner is set in the open hole section of the wellbore. The difference is that gravel is sometimes
placed behind the screen. The advantages and disadvantages are the same as for open hole
completions. The screen and liner completion is used primarily in unconsolidated formations to
prevent the movement of formation materials into the wellbore, restricting the flow of reservoir
fluids.
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Intramuros, Manila
The cemented liner completion is used when intermediate casing is set in a well prior to
reaching total depth. Many times intermediate casing is used to isolate zones behind pipe such as
low pressured intervals that tend to cause lost circulation problems or to isolate zones such as
sloughing shales or salt layers. Intermediate casing is also set in transition zones between normally
pressured intervals and geopressured intervals. After the casing is set, the weight or chemistry of
the drilling fluid can be changed to continue drilling the well. The cemented liner completion is
advantageous because the particular intervals behind the liner can be selectively perforated. This
selection will allow one to control both the production and injection of fluids in those intervals.
The main disadvantage of a cemented liner is the difficulty encountered in obtaining a good
primary cement job across the liner. If a good cement job is obtained, then a cemented liner
completion is very similar to a perforated casing completion.
This technique also suffers from the same inability for zonal control of production
or injection as exists in the open hole completion and may only effectively control
sand production over a limited range of conditions. However, it is a low cost technique since the
cost of a screen to cover the reservoir interval is much less than the cost of a casing string run to
surface plus the cost of cementing and perforating. However in the case of using premium sand
exclusion screens, the cost saving will be reduced. The technique is therefore only of application
as an alternative to the open hole completion in situations where the reservoir rock consists of
relatively large and homogenous sand grains.
Permanent/Single completions are those in which the completion and wellhead are assembled
and installed only once. Installing the casing, cementing, perforating and other completion work
is done with small-diameter tools to ensure the permanent nature of the completion. Completing
a well in this manner can lead to significant cost savings compared to other types.
Multiple zone completion is the practice of completing a well such that hydrocarbons from two
or more formations may be produced simultaneously, without mixing with each other. For
example, a well may be drilled that passes through a number of formations on its way deeper
underground, or it may be more desirable in a horizontal well to add multiple completions to
drain the formation most effectively. When it is necessary to separate different completions, hard
rubber packing instruments are used to maintain separation.
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Intramuros, Manila
COMPLETION COMPONENTS
The upper completion refers to all components from the bottom of the production tubing
upwards. Proper design of this "completion string" is essential to ensure the well can flow properly
given the reservoir conditions and to permit any operations as are deemed necessary for
enhancing production and safety.
Wellhead
This is the pressure containing equipment at the surface of the well where casing strings
are suspended and the blowout preventer or Christmas tree is connected.
Christmas Tree
This is the main assembly of valves that controls flow from the well to the process plant (or
the other way round for injection wells) and allows access for chemical squeezes and well
interventions.
Tubing hanger
This is the component, which sits on top of the wellhead and serves as the main support
for the production tubing.
Production tubing
Production tubing is the main conduit for transporting hydrocarbons from the reservoir to
surface (or injection material the other way). It runs from the tubing hanger at the top of the
wellhead down to a point generally just above the top of the production zone.
Downhole safety valve
This component is intended as a last-resort method of protecting the surface from the
uncontrolled release of hydrocarbons. It is a cylindrical valve with either a ball or flapper closing
mechanism. It is installed in the production tubing and is held in the open position by a highpressure hydraulic line from surface contained in a 6.35 mm (1/4") control line that is attached to
the DHSV's hydraulic chamber and terminated at surface to a hydraulic actuator. The high
pressure is needed to overcome the production pressure in the tubing upstream of the choke on
the tree. The valve will operate if the umbilical HP line is cut or the wellhead/tree is destroyed.
Annular safety valve
On wells with gas lift capability, many operators consider it prudent to install a valve,
which will isolate the A annulus for the same reasons a DHSV may be needed to isolate the
production tubing in order to prevent the inventory of natural gas downhole from becoming a
hazard as it became on Piper Alpha.
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Intramuros, Manila
Side pocket mandrel

This is a welded/machined product which contains a "side pocket" alongside the main
tubular conduit. The side pocket, typically 1" or 1" diameter is designed to contain gas lift valve,
which allows flow of High pressure gas into the tubing there by reducing the tubing pressure and
allowing the hydrocarbons to move upwards.
Electrical submersible pump
This device is used for artificial lift to help provide energy to drive hydrocarbons to surface
if reservoir pressure is insufficient.
Landing nipple
A completion component fabricated as a short section of heavy wall tubular with a
machined internal surface that provides a seal area and a locking profile. Landing nipples are
included in most completions at predetermined intervals to enable the installation of flow-control
devices, such as plugs and chokes. Three basic types of landing nipple are commonly used: no-go
nipples, selective-landing nipples and ported or safety-valve nipples.
Sliding sleeve
The sliding sleeve is hydraulically or mechanically actuated to allow communication
between the tubing and the 'A' annulus. They are often used in multiple reservoir wells to regulate
flow to and from the zones.
Production packer
The packer isolates the annulus between the tubing and the inner casing and the foot of
the well. This is to stop reservoir fluids from flowing up the full length of the casing and damaging
it. It is generally placed close to the foot of the tubing, shortly above the production zone.
Downhole gauges
This is an electronic or fiberoptic sensor to provide continuous monitoring of downhole
pressure and temperature. Gauges either use a 1/4" control line clamped onto the outside of the
tubing string to provide an electrical or fiberoptic communication to surface, or transmit measured
data to surface by acoustic signal in the tubing wall. The information obtained from these
monitoring devices can be used to model reservoirs or predict the life or problems in a specific
wellbore.
Perforated joint
This is a length of tubing with holes punched into it. If used, it will normally be positioned
below the packer and will offer an alternative entry path for reservoir fluids into the tubing in case
the shoe becomes blocked, for example, by a stuck perforation gun.
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Intramuros, Manila
Formation isolation valve

This component, placed towards the foot of the completion string, is used to provide two
way isolation from the formation for completion operations without the need for kill weight fluids.
Their use is sporadic as they do not enjoy the best reputation for reliability when it comes to
opening them at the end of the completion process.
Centralizer
In highly deviated wells, this component may be included towards the foot of the
completion. It consists of a large collar, which keeps the completion string centralized within the
hole.
Wireline entry guide
This component is often installed at the end of the tubing, or "the shoe". It is intended to
make pulling out wireline tools easier by offering a guiding surface for the toolstring to re-enter
the tubing without getting caught on the side of the shoe.
WELL COMPLETION PROCESS

Well completion incorporates the steps taken to transform a drilled well into a producing
one. These steps include casing, cementing, perforating, gravel packing and installing a
production tree.
Casing
The first step in completing a well is to case the hole. After a well has been drilled,
should the drilling fluids be removed, the well would eventually close in upon itself. Casing
ensures that this will not happen while also protecting the well stream from outside
incumbents, like water or sand.
Consisting of steel pipe that is joined together to make a continuous hollow tube,
casing is run into the well. The different levels of the well define what diameter of casing
will be installed. Referred to as a casing program, the different levels include production
casing, intermediate casing, surface casing and conductor casing.
Additionally, there are two types of casing that can be run on a well. One type of
casing consists of a solid string of steel pipe. Solid casing is run on the well if the formation
is firm and will remain that way during the life of the well. Should the well contain loose
sand that might infiltrate the well stream, the casing is installed with a wire screen liner
that will help to block the sand from entering the wellbore.
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Cementing
The next step in well completion involves cementing the well. This includes
pumping cement slurry into the well to displace the existing drilling fluids and fill in the
space between the casing and the actual sides of the drilled well.
Consisting of a special mixture of additives and cement, the slurry is left to harden,
sealing the well from non-hydrocarbons that might try to enter the wellstream, as well as
permanently positioning the casing into place.
Perforation
Cased-hole completions require casing to be run into the reservoir. In order to
achieve production, the casing and cement are perforated to allow the hydrocarbons to
enter the wellstream.
This process involves running a perforation gun and a reservoir locating device
into the wellbore, many times via a wireline, slickline or coiled tubing. Once the reservoir
level has been reached, the gun then shoots holes in the sides of the well to allow the
hydrocarbons to enter the wellstream. The perforations can either be accomplished via
firing bullets into the sides of the casing or by discharging jets, or shaped charges, into the
casing.
While the perforation locations have been previously defined by drilling logs, those
intervals cannot be easily located through the casing and cement. To overcome this
challenge, a gamma ray-collar correlation log is typically implemented to correlate with
the initial log run on the well and define the locations where perforation is required.
Gravel Pack
Some wells require filtration systems in order to keep the wellstream clear of sand.
In addition to running a casing with a liner, gravel packing is used to prevent sand from
entering the wellstream.
More complicated than cementing a well, gravel packing requires a slurry of
appropriately sized pieces of coarse sand -- or gravel -- to be pumped into the well between
the slotted liner of the casing and the sides of the wellbore. The wire screens of the liner
and the gravel pack work together to filter out the sand that might have otherwise entered
the wellstream with the hydrocarbons.
Production Tree
The last step in completing a well, a wellhead is installed at the surface of the well.
Many times called a production tree or Christmas tree, the wellhead device includes
casingheads and a tubing head combined to provide surface control of the subsurface
conditions of the well.
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While both onshore and offshore wells are completed by production trees,
offshore wells can be completed by two different types of trees: dry and wet trees. Similar
to onshore production trees, dry trees are installed above the waters surface on the deck
of a platform or facility and are attached to the well below the water. Wet trees, on the
other hand, are installed on the seabed and encased in a solid steel box to protect the
valves and gages from the elements. The subsea wet tree is then connected via electronic
or hydraulic settings that can be manipulated from the surface or via ROVs.
Additionally, wells may have production flowing from multiple reservoir levels.
These wells require multiple completions, which keep the production separate. Doublewing trees are installed on multiple reservoir levels.
Furthermore, completions have evolved to incorporate downhole sensors that
measure flow properties, such as rate, pressure and gas-to-oil ratio. Known as intelligent
wells or smart wells, these completions help to achieve optimum production rates.
EXTRACTION OF PETROLEUM
Primary Extraction
In the primary recovery stage, reservoir drive comes from natural mechanisms. Reservoir
drive simply refers to the factors that move oil out of a well to the surface once drilling has
occurred. Natural reservoir drives include natural gas expansion, gravity drainage of oil from
upper parts of a well to lower parts, and displacement of oil by water. For todays wells, primary
recovery accounts for 5-15% of the total amount of petroleum contained within a given deposit.
Secondary Extraction
As wells age, their natural pressures fall. Once the pressure is too low to force oil to the
surface, extraction moves into secondary recovery. Secondary recovery depends on mechanical
methods to increase pressure in the well. Often times this takes the form of injecting liquids or
other material such as natural gas, carbon dioxide, or air into the well to increase pressure.
Pumps are also used in secondary extraction. Because they are prone to problems and are
more expensive to operate, submersible pumps are avoided if possible. Most people will be
familiar with a pumpjack, which is often mistakenly referred to as an oil derrick. Pumpjacks are
alternatively called pumping units, horse head pumps, beam pumps, and thirsty bird pumps. They
are composed of a walking beam that is balanced atop a triangular apparatus. One end of the
beam is attached to a motor-driven crank and the other end is attached to a pushrod that extends
into the oil well.
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Recovery through water injection is usually about 30% of a wells total output. The total
recovery from a well after primary and secondary stages is usually between 35 and 45% of the
total contained. Note that this is not a fraction of the total amount that will be extracted. Rather,
it is a fraction of the total amount in the well. The amount of petroleum extracted from a well is
usually 50 to 60% of the total deposit.
Tertiary Extraction
In the final stage of extraction, methods intended to increase liquidity of the oil are applied.
At this stage, heat and chemicals become necessary.
Some of the principle methods used in tertiary extraction are called thermally enhanced
oil recovery or TEOR. In these methods, heat is applied to make the oil flow better. Steam is the
most common method of heating oil, but burning is used as well.
Chemicals called surfactants are also used in tertiary extraction. They decrease surface
tension of oil, which helps it flow. Surface tension can be thought of in this case as the attraction
of hydrocarbons for one another. Solids have greater attractive forces between molecules that
make them up than do liquids. Liquids, in turn, have greater attractive forces between molecules
than do gases. By decreasing intermolecular attractions, surfactants help to decrease the viscosity
of oil. Surfactants are often used in combination with TEOR.
Occasionally, oil-eating bacteria are also used in tertiary recovery. Bacteria that eat
petroleum often have appetites only for hydrocarbons of a certain length. If bacteria are used that
break larger hydrocarbons into smaller ones, then they will assist in making the oil less viscous
since larger molecules tend toward the solid end of the spectrum. Bacterial injection can be more
economical than other recovery methods and also more environmentally friendly. This technique
is currently incentivized in places like Texas in an effort to increase its use.
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SEPARATION OF OIL, NATURAL GAS AND WATER

In almost all production operations, the produced fluid stream consists of three phases: oil,
water and natural gas. Generally, water produced with the oil exists partly as free water and partly
as water-in-oil emulsion. In some cases, however, when the water-oil ratio is very high, oil-in-water
rather than water-in-oil emulsion will form. Free water produced with the oil is defined as the
water that will settle and separate from the oil by gravity. To separate the emulsified water,
however, heat treatment, chemical treatment, electrostatic treatment, or a combination of these
treatments would be necessary in addition to gravity settling. Therefore, it is advantageous to first
separate the free water from the oil to minimize the treatment costs of the emulsion.
Along with the water and oil, gas will always be present and, therefore, must be separated
from the liquid. The volume of gas depends largely on the producing and separation conditions.
When the volume of gas is relatively small compared to the volume of liquid, the method used to
separate the free water, oil and gas is called a free-water knockout. In such a case, the separation
of the water from oil will govern the design of the vessel. When there is a large volume of gas to
be separated from the liquid (oil and water), the vessel is called a three-phase separator and either
the gas capacity requirements or the water-oil separation constraints may govern the vessel
design.
COMPONENTS
An oil/gas separator generally consists of following components
Inlet device located in pre-separation zone/section for preliminary phase separation;

Baffles downstream the inlet component to improve flow distribution;
Separation enhancement device located in the primary separation (gravity settling)
section for major phase separation;
Mist extraction device located in gas space to further reduce liquid content in the bulk gas
stream;
Various weirs to control the liquid level or interface level;
Vortex breaker to prevent gas carry under at outlet of liquid phase;
Liquid level/interface detection and control, etc.;
Gas, oil, water outlet;
Pressure relief devices
In most oil/gas processing systems, the oil/gas separator is the first vessel the well stream
flows through after it leaves the producing well. However, other equipment such as heaters may
be installed upstream of the separator.
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HORIZONTAL SEPARATOR
The produced fluid stream, coming either directly from the producing wells or from a freewater knockout vessel, enters the separator or hits the inlet diverter, where the initial bulk
separation of the gas and liquid takes place due to the change in momentum and differences in
fluid densities. The gas flows horizontally through the gravity settling section (the top part of the
separator) where the entrained liquid droplets, down to certain minimum size (normally 100
microns), are separated by gravity. The gas then flows through the mist extractor, where smaller
entrained liquid droplets are separated, and out of the separator through the pressure control
valve, which controls the operating pressure of the separator and maintains it at a constant value.
The bulk of liquid, separated at the inlet diverter, flows downward, normally through a
downcomer that directs the flow below the oil-water interface. The flow of the liquid through the
water layer, called water washing, helps in the coalescence and separation of the water droplets
suspended in the continuous oil phase. The liquid collection section should have sufficient volume
to allow enough time for the separation of the oil and emulsion from the water. The oil and
emulsion layer forming on top of the water is called the oil pad. The weir controls the level of the
oil pad and an interface controller controls the level of the water and operates the water outlet
valve. The oil and emulsion flow over the weirs and collect in a separate compartment, where its
level is controlled by a level controller that operates the oil outlet valve.
VERTICAL SEPARATOR
Horizontal separators are normally preferred over vertical separators due to the flow
geometry that promotes phase separation. However, in certain applications, the engineer may be
forced to select a vertical separator instead of a horizontal separator despite the process-related
advantages of the later. An example of such applications is found in offshore operations, where
the space limitations on the production platform may necessitate the use of a vertical separator.
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The produced fluid streams enters the separator from the side and hits the inlet diverter,
where the bulk separation of the gas from the liquid takes place. The gas flows upward through
the gravity settling sections which are designed to allow separation of liquid droplets down to a
certain minimum size (normally 100 microns) from the gas. The gas then flows through the mist
extractor, where the smaller liquid droplets are removed. The gas leaves the separator at the top
through a pressure control valve that controls the separator pressure and maintains it at a
constant value.
The liquid flows downward through a downcomer and a flow spreader that is located at
the oil-water interface. As the liquid comes out of the spreader, the oil rises to the oil pad and the
water droplets entrapped in the oil settle down and flow, countercurrent to the rising oil phase,
to collect in the water collection section at the bottom of the separator. The oil flows over a weir
into the oil chamber and out of the separator through the oil outlet valve. A level controller
controls the oil level in the chamber and operates the oil outlet valve. Similarly, the water out of
the spreader flows downward into the water collection section, whereas the oil droplets
entrapped in the water rise, countercurrent to the water flow, into the oil pad. An interface
controller that operates the water outlet valve controls the water level. A chimney must be
provided to allow the gas liberated from the oil to rise and join the rest of the separated gas, and,
thus, avoid over pressurizing the liquid section of the separator. The use of the oil weir and
chamber provides good separation of water from oil, as the oil has to rise to the full height of the
weir before leaving the separator. The oil chamber, however, presents some problems such as: it
takes up space and reduces the separator volume needed for the retention times of oil and water;
provides a place for sediments and solids to collect which creates cleaning problems and may
hinder the flow of oil; and it also adds to the cost of the separator.
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LOCATING AN OIL FIELD

The Science of Searching
Though we have explored a lot of possible sources of petroleum that may be no more
unexplored frontiers on earth, still, there is plenty deep inside the earth that we havent discovered
yet.
In order for oil companies to locate oil and gas reservoirs deep beneath land and sea, they
utilizes wide range of technologies to help them to do so. But search remains a complex business.
Success is never certain.
Improving the Odds

In the early days of oil exploration, oil companies and prospectors really had no idea what
they were looking for. Areas near seepages are the focus of these companies where they bubbled
up naturally in pools. Then they begin sunk a drill and hoped for the best.
The rate of success has improved greatly since those early discoveries, from 10% or less to
more like 50%. New technologies developed by BP and the others may improve the odds even
further.
Drilling is still the only sure way to find out whether theres oil gas down there. However,
drilling is expensive. Each project can cost tens of tens of millions of dollars or more. So before we
drill, we do as much planning as possible. And that can take years.
The Geologists Eye

We start with what we can see. Both geologists and geophysicists provide crucial insights
at this stage in the exploration process. Geologists look at what rocks are made of and the
formations they make in the earth. Geophysicists use physical characteristics, such as magnetic
and gravitational properties, to guess the type and shape of the subsurface rocks.
Aerial photography from aircraft and satellites can be revealing. The same tectonic shifts
that formed mountains and other topographical features above the earths surface also shaped
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the rock formations down below. To the trained eye, these photographs can say a lot about what
lies beneath the soil.
Aircraft can measure the gravitational pull over an area. Even small gravitational
differences can reveal large clues about the density of underlying rocks.
But the most powerful tool available to us is the acoustic survey. Geophysicists use air guns
to fire acoustic pulses down through the rock. The sound waves bounce back like echoes,
revealing different layers and depths.
This data gives our experts the
information they need to map reservoirs and
identify whether theyre filled with oil, gas or
merely water.
Needless to say, this sort of seismic study
is a lot less damaging to the environment than
random drilling. But there are still
environmental risks to consider. Before we
begin a seismic study, we speak with marine
biologists where appropriate, and look
thoroughly at any environmental issues. For
example, work might be delayed so that it
doesnt interfere with animals feeding times,
breeding periods or migrating seasons.
Visualizing Success in Four Dimensions

Anyone who has seen a 3D film in a large-format screen can imagine what the next stage
in our exploration process is like.
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In special room called a highly immersive visual environment, or HIVE, our geologists,
geophysicists, computer scientists, drilling engineers and others come together to view seismic
data in four dimensions (The fourth dimension is time.)
On a large, curved screen three projectors display sophisticated renderings of the
reservoirs oil and gas deposits, the surrounding rock structures and the earth or sea above it.
Viewed though 3D glasses, these projections help us to more accurately plan our next step:
drilling into soil and rock to find out or certain whether these visualizations were correct.
Drilling Initiation
When all the experts have been consulted, the risks have been assessed, the
environmental studies have been carried out and the data has been compiled into workable maps
of the exploration site, its time to send in the drilling crew.
Before any drilling begins on land we may have to build access roads, construct a
temporary power station or install wells for the water supply. In fragile habitats or very remote
places helicopters or barges may be the only responsible way to get equipment and supplies into
place.
Drilling for oil in the winds, currents and choppy waters of the open seas is even more
challenging. The most difficult part is getting a drilling rig to stay in position despite the currents
and waves.
Three types of rigs

In shallower water of up to 100 metres, we use what is called a jack-up unit. It starts out
as a barge, which is towed into place. Legs extend to the sea floor and then the barge lifts out of
the water, becoming a stable drilling platform.
In rougher seas or water up to 300 metres deep we use some of the water itself as a
counterweight. A semi-submersible drilling rig is a platform attached to submerged pontoons.
When the pontoons are flooded with water they lower into the ocean, meaning waves dont
affect the platform nearly as much.
In the most extreme deepwater situations we bring in the most heavyweight drilling
option available, the drill ship. Drill ships are held in place by large anchors or by dynamic
positioning systems, which use computer-controlled propellers to help the ship stay in place.
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Safety First
Because crude oil and natural gas are hot and
highly pressurized, we have to take great care to
control pressure during the drilling process.
However, its not quite as dramatic a job as
some old Hollywood movies suggest, with struck oil
spewing violently out into the sky. As a precaution,
modern wells are fitted with emergency valves to
prevent this kind of blowout.
Everyone involved in a drilling project
undergoes rigorous safety training. Risks are assessed
at every step. Increasingly we plan exploration
projects remotely, using data instead of site visits, which means fewer employees and contractors
are exposed to potential dangers on the actual rig.
CREATING A DRILLING SITE

Drilling for oil and natural gas is a complex process, but advanced technology has made
the job more efficient and productive while providing less impact on the environment. Want to
see how the oil and gas industry does it? This is through drilling rigs.
A drilling rig is a machine that creates holes in the earth sub-surface. Drilling rigs can be
massive structures housing equipment used to drill water wells, oil wells, or natural gas extraction
wells, or they can be small enough to be moved manually by one person and are called augers.
Drilling rigs can sample sub-surface mineral deposits, test rock, soil and groundwater physical
properties, and also can be used to install sub-surface fabrications, such as underground utilities,
instrumentation, tunnels or wells. Drilling rigs can be mobile equipment mounted on trucks, tracks
or trailers, or more permanent land or marine-based structures (such as oil platforms, commonly
called 'offshore oil rigs' even if they don't contain a drilling rig). The term "rig" therefore generally
refers to the complex of equipment that is used to penetrate the surface of the Earth's crust.
The task of drilling rig is to bore a hole on Earths crust to form an oil well. An oil well is
a boring in the Earth that is designed to bring petroleum oil hydrocarbons to the surface. Usually
some natural gas is produced along with the oil. A well that is designed to produce mainly or only
gas may be termed a gas well.
The well is created by drilling a hole 12 cm to 1 meter (5 in to 40 in) in diameter into the
earth with a drilling rig that rotates a drill string with a bit attached. After the hole is drilled,
sections of steel pipe (casing), slightly smaller in diameter than the borehole, are placed in the
hole. Cement may be placed between the outside of the casing and the borehole known as the
annulus. The casing provides structural integrity to the newly drilled wellbore, in addition to
isolating potentially dangerous high pressure zones from each other and from the surface.
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With these zones safely isolated and the formation protected by the casing, the well can
be drilled deeper (into potentially more-unstable and violent formations) with a smaller bit, and
also cased with a smaller size casing. Modern wells often have two to five sets of subsequently
smaller hole sizes drilled inside one another, each cemented with casing.
Drilling Equipment (Derrick)

Derrick is a framework erected over an oil well to allow drill tubes to be raised lower.
44
Centrifuge: an industrial version of the device that separates fine silt and sand from the
drilling fluid.
Solids control: solids control equipment is for preparing drilling mud for the drilling rig.
Chain tongs: wrench with a section of chain, that wraps around whatever is being
tightened or loosened. Similar to a pipe wrench.
Degasser: a device that separates air and/or gas from the drilling fluid.
Desander / desilter: contains a set of hydrocyclones that separate sand and silt from the
drilling fluid.
Drawworks: (#7) is the mechanical section that contains the spool, whose main function is
to reel in/out the drill line to
raise/lower the traveling
block (#11).
Drill bit: (#26) is a device
attached to the end of the drill
string that breaks apart the rock
being drilled. It contains jets
through which the drilling fluid
exits.
Drill pipe: (#16) joints of hollow
tubing used to connect the
surface equipment to the bottom
hole assembly (BHA) and acts as
a conduit for the drilling fluid. In
the diagram, these are "stands" of
drill pipe which are 2 or 3 joints
of drill pipe connected together
and "stood" in the derrick
vertically, usually to save time
while tripping pipe.
Elevators: a gripping device that
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casing to facilitate the lowering or lifting (of pipe or casing) into or out of the borehole.
Mud motor: a hydraulically powered device positioned just above the drill bit used to spin
the bit independently from the rest of the drill string.
Mud pump: (#4) reciprocal type of pump used to circulate drilling fluid through the system.
Mud tanks: (#1) often called mud pits, provides a reserve store of drilling fluid until it is
required down the wellbore.
Rotary table: (#20) rotates the drill string along with the attached tools and bit.
Shale shaker: (#2) separates drill cuttings from the drilling fluid before it is pumped back
down the borehole.
Steps:
Some people believe that oil and natural gas
companies can explore for oil wherever they
want. This is not true. Companies must secure
permission from the owner of the mineral
rights, whether the owner is a private citizen or
the government. Many mineral owners and
the government allow oil and natural gas
companies to compete to drill on their land.
The companies assume all the costs and risks of
drilling and, in return, pay the mineral owners
a portion of what they find and a signing
bonus to secure the drilling rights. The share of
the production paid by the company to the
mineral owner is called a royalty payment.
The drilling derrick is used to position and

support the drill string. Modern drilling
equipment comes in a wide range of sizes.
Many wells can be drilled with equipment that
requires far less space than in the past.
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Drill rigs now run on electricity to supply the

power to turn the bit and raise and lower the
drill pipe and casing. Since most drilling occurs
in remote areas, the electricity is supplied by
electric power generators that run on diesel
fuel. These generators make drilling rigs much
quieter than in the past.
The drill bit uses three conical shaped cutting

surfaces to grind rock into rice-sized particles.
The newest bits drill 150 percent to 200 percent
faster than similar bits just a few years ago! The
drill string consists of lengths of pipe fastened to
each other and to the drill bit. The drill string
transmits power from the top drive to the drill
bit.
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As the drill cuts into the rock, drilling mud is

added to the hole. This helps cool the drill bit,
and the mud is circulated to bring cuttings to
the surface. The weight of the drilling
mud keeps the hole open. This mud isnt really
mud. Its a fluid consisting of water, clay,
additives and thickeners. It both cools the drill
bit, which can get really hot, and flushes out
the shards of cut rock from the reservoir.It also
helps counteract the pressure of any gas or
fluids encountered along the way, in this way
preventing a well from loss of control or "blow
out. As the mud comes back up through the
outer part of the pipe, we get the first hard
evidence showing whether we were right
about the resources at the site.
Protecting the aquifer from contamination is a

major concern of the oil and natural gas
industry. Casing made of steel or high-tech
alloys is lowered into the hole and cemented
into place to protect fresh water aquifers. The
casing also keeps the hole open so that oil and
natural gas can be brought to the surface.
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To reduce waste, the drilling mud is passed

through a sieve where the ground rock
particles or cuttings can be removed. Then the
mud is recycled back into the hole.
Dirt and rock cuttings are removed from the

hole and temporarily stored nearby. Holding
areas are carefully sited, lined and often times
covered with nets to protect local wildlife.
Geologists monitor the cuttings to check
whether theyre coming out in the sequences
they expected, while records of the mud and
rock fragments are kept for further study later
on.
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All aspects of the drilling operations are closely

monitored to ensure efficient drilling and
safety. Electronic sensors measure drilling rates,
vibration, pressure, rock type, mud properties
and many other drilling parameters.
Computers monitor operations and collect
data from inside the well. With advanced
communications technology, drilling personnel
can share and review this data with engineers
and geologists located thousands of miles
away. If a problem is detected, the rig can be
safely and quickly shut down.
Drilling Rigs
There are many different types of drilling rigs. Which rig selected depends on the specific
requirements of each drill site.
Land Based Drilling Rigs - The land-based
drilling rig is the most common type used for
exploration. This site is using a conventional,
land-based drilling rig that is smaller and
more efficient than those used in the past.
Slim Hole Drilling Rig - A conventional drill

bore might be 18 inches in diameter; a
slimhole bore can be as little as 6 inches. A
slimhole well drilled to 14,760 feet may
produce one-third the amount of rock
cuttings generated by a standard well. The
size of the drill site can be as much as 75
percent smaller, since slimhole equipment
requires less space than conventional
equipment. However, slimhole drilling is not
technically feasible in all environments.
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Coiled Tubing Drill Rig - Conventional wells

are drilled using sections of rigid pipe to form
the drill string. In some cases, coiled tubing
technology can replace the typical drill string
with a continuous length of pipe stored on a
large spool. This approach has many benefits,
including reduced drilling waste and
minimized equipment footprints, so it is
especially useful in environmentally sensitive
areas. This technology is best suited to reentering existing wells, and when multiple
casing wells are unnecessary.
Jackup Drill Rigs These rigs may be used in
relatively shallow water -- less than 300 feet
deep. A jackup rig is a floating barge
containing the drilling structure that is
outfitted with long support legs that can be
raised or lowered independently of each
other. The jackup, as it is known informally, is
towed onto location with its legs up and the
barge section floating on the water. Once at
the drilling location, the legs are jacked down
onto the seafloor, and then all three legs are
jacked further down. Since the legs will not
penetrate the seafloor, continued jacking
down of the legs raises the jacking
mechanism attached to the barge and drilling
package, and slowly lifts the entire barge and
drilling structure to a predetermined height
above the water. These rigs are extremely
strong, since they have to withstand ocean
storms and high waves. These rigs are moved
by simply by moving the legs up and down,
which makes them cost-effective and easily
shifted out of harm's way during storms.
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Semi-Submersible Rigs Drilling in water

deeper than 300 feet demands some kind of
floating platform to hold the rig. Semisubmersible rigs are floating vessels
supported on large pontoon-like structures
that are submerged below the sea surface. As
with jackup rigs, the operating decks are
elevated as much as 100 or more feet above
the pontoons on large steel columns. This
design has the advantage of submerging
most of the area of components in contact
with the sea and minimizing loading from
waves and wind. Semisubmersibles can
operate in a wide range of water depths,
including deep water. Semi-submersibles can
either be attached to the ocean bottom using
strong chains and wire cables or may utilize
dynamic positioning to remain stationary
during drilling without anchors.
Drill Ship - For exploration targets farther
offshore, specially designed rigs mounted on
ships can drill a well in water depths up to
10,000 feet. These rigs float and can be
attached to the ocean bottom using
traditional mooring and anchoring systems,
or utilize dynamic positioning to remain
stationary during drilling without anchors.
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ADVANCED DRILLING METHODS

Oil and natural gas wells have traditionally been drilled vertically, at depths ranging from a few
thousand feet to as deep as five miles. Today, advances in drilling technology allow oil and natural
gas companies to reach more reserves while reducing environmental impact by:
1. reducing the surface footprint of drilling operations,
2. drilling smaller holes and generating less waste
3. creating less noise,
4. avoiding sensitive ecosystems, and
5. completing operations more quickly.
Here are some technologies used:
Horizontal Drilling - Horizontal drilling starts with
a vertical well that turns horizontal within the
reservoir rock in order to expose more open hole
to the oil. These horizontal legs can be over a
mile long; the longer the exposure length, the
more oil and natural gas is drained and the faster
it can flow. More oil and natural gas can be
produced with fewer wells and less surface
disturbance. However, the technology only can
be employed in certain locations.
Multilateral Drilling - Sometimes oil and natural gas reserves are

located in separate layers underground. Multilateral drilling allows
producers to branch out from the main well to tap reserves at
different depths. This dramatically increases production from a
single well and reduces the number of wells drilled on the surface
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Extended Reach Drilling - Extended Reach Drilling Extended reach drills allow producers to reach
deposits that are great distances away from the
drilling rig. This can help producers tap oil and
natural gas deposits under surface areas where a
vertical well cannot be drilled, such as under
developed or environmentally sensitive areas.
Wells can now reach out over 5 miles from the
surface location. Offshore, the use of extended
reach drilling allows producers to reach
accumulations far from offshore platforms, minimizing the number of platforms needed to
produce all the oil and gas. Onshore, dozens of wells can be drilled from a single location,
reducing surface impacts.
Complex Path Drilling - Complex well paths

can have multiple twists and turns to try to hit
multiple accumulations from a single well
location. Using this technology can be more
cost effective and produce less waste and
surface impacts than drilling multiple wells.
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WELL EVALUATION
Rock and fluid properties will determine how much oil and natural gas can be recovered
from a reservoir. After an exploratory well has been drilled, it is evaluated to determine if there is
enough oil and natural gas in the reservoir to make it economically feasible to initiate recovery
operations.
Drill Cuttings and Core Samples - As the drilling mud is brought to
the surface, it is run through a sieve to removed the drill cuttings
(pulverized rock) before the mud is recycled down into the well.
Small pieces of rock are selected for microscopic analysis to
determine the type of rock being drilled, how porous it is, and
whether oil is present. The drilling mud also is analyzed with sensors
to see if trace amounts of oil or natural gas are present an
indication of a possible accumulation at depth. In the past, rock cuttings were the principal source
of well information.
Well Logging - A special bit can be used to cut a
cylindrical piece of rock that can be brought to the
surface for analysis. The core is sent to a laboratory
where the exact porosity and permeability can be
determined. This gives a good indication of how well
oil or natural gas would flow through the rock. Fluid
samples can be taken and analyzed to determine the
amount and type of hydrocarbon present in the rock\
Wells are completed for production if the value of the
recoverable oil and/or natural gas is greater than the
cost of drilling and producing them and delivering them to market. If not, the well is plugged In
accordance with industry standards and federal or state requirements (depending on the
location) and the site is restored.
54

Petroleum

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Petroleum

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PAMANTASAN NG LUNGSOD NG MAYNILA

The crude oil mixture is composed of the following groups:

PAMANTASAN NG LUNGSOD NG MAYNILA

Table 1: Petroleum composition by weight of Hyrdrocarbons

PAMANTASAN NG LUNGSOD NG MAYNILA

Figure 1: Paraffins in Crude oil

PAMANTASAN NG LUNGSOD NG MAYNILA

Figure 2: Naphthenes in Crude oil

Figure 3: Aromatic Hydrocarbons in Crude oil

PAMANTASAN NG LUNGSOD NG MAYNILA

B. NON-ACIDIC SULFUR COMPOUNDS

PAMANTASAN NG LUNGSOD NG MAYNILA

B. NON-BASIC NITROGEN COMPOUNDS

Porphyrins are non-basic nitrogen compounds. The porphyrin

PAMANTASAN NG LUNGSOD NG MAYNILA

B. NON-ACIDIC OXYGEN COMPOUNDS

PAMANTASAN NG LUNGSOD NG MAYNILA

Petroleum formation occurs by various hydrocarbons combining with certain minerals

PAMANTASAN NG LUNGSOD NG MAYNILA

This leaves the remains consisting

PAMANTASAN NG LUNGSOD NG MAYNILA

The Importance of Oxygen

PAMANTASAN NG LUNGSOD NG MAYNILA

PHILEX PETROLEUM CORPORATION

PAMANTASAN NG LUNGSOD NG MAYNILA

PHILIPPINE NATIONAL OIL COMPANY EXPLORATION CORPORATION

PAMANTASAN NG LUNGSOD NG MAYNILA

PILIPINAS SHELL PETROLEUM CORP.

PAMANTASAN NG LUNGSOD NG MAYNILA

Petron is public company listed on the Philippine Stock Exchange.

PAMANTASAN NG LUNGSOD NG MAYNILA

ALCORN GOLD RESOURCES CORPORATION

PAMANTASAN NG LUNGSOD NG MAYNILA

METHODS FOR OIL EXPLORATION

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2. GRAVITY AND GEOMAGNETIC SURVEYS

PAMANTASAN NG LUNGSOD NG MAYNILA

PAMANTASAN NG LUNGSOD NG MAYNILA

MALAMPAYA GAS FIELD

SHELL PHILIPPINES EXPLORATION B.V. (SPEX)

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PAMANTASAN NG LUNGSOD NG MAYNILA

GALOC OIL FIELD

Discovered in 1981, the field was initially

PAMANTASAN NG LUNGSOD NG MAYNILA

PAMANTASAN NG LUNGSOD NG MAYNILA

NIDO OIL FIELD

PAMANTASAN NG LUNGSOD NG MAYNILA

MATINLOC OIL FIELD

PAMANTASAN NG LUNGSOD NG MAYNILA

TINDALO OIL FIELD

Trafigura Ventures III BV (15%) and TG

PAMANTASAN NG LUNGSOD NG MAYNILA

WHAT HAPPENED TO GUIMARAS?

PAMANTASAN NG LUNGSOD NG MAYNILA

Connect the reservoir to the surface so that fluids

Provide a conduit for well stimulation treatments

Isolate the producing reservoir from other zones

Protect the integrity of the reservoir, especially in

Provide a conduit to measure the changes in flow

PAMANTASAN NG LUNGSOD NG MAYNILA

Open Hole Completions

PAMANTASAN NG LUNGSOD NG MAYNILA

PAMANTASAN NG LUNGSOD NG MAYNILA