Mdso-802-Petroleum Exploration PDF

Course Code: MDSO-802
Course Name: Petroleum Exploration

Contents
Unit 1 Introduction .......................................................................................................... 1
Unit 2 Basic Geology ..................................................................................................... 13
Unit 3 Oil Formation ..................................................................................................... 21
Unit 4 Migration of Petroleum and Geological Structures for Petroleum

Entrapment ......................................................................................................... 27
Unit 5 Exploration Methods ......................................................................................... 39
Unit 6 Well Drilling and Logging ................................................................................ 49
Unit 7 Reservoir Geology .............................................................................................. 59
Unit 8 Prospect Identification and Quantitative Assessment ................................. 65
Unit 9 Exploration and Production Activities in India ............................................ 75

OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
UNIT 1 Introduction 1
Notes
Unit 1 __________________
__________________
Introduction __________________
__________________
__________________
Objectives
__________________
After reading this unit you will be able to know:
__________________
What are hydrocarbons
__________________
What their are properties
__________________
The main products derived from crude oil and their uses
__________________
Introduction
By definition, petroleum is a generic name for hydrocarbons,
including crude oil, natural gas liquids, natural gas and their
products.
Petroleum comes from the Latin petra meaning rock or stone,

and oleum meaning oil.
Petroleum occurs in the earth in combination of any of the four

states: gas, liquid, semi-solid, and solid. Chemically, petroleum
is a mixture of carbon, hydrogen and oxygen (hence the term
hydrocarbons) with minor amounts of nitrogen, oxygen, and
sulfur as impurities along with traces of heavy metals. Petroleum
is organic; it contains complex carbon-hydrogen molecular
structures called chains that are linked together to form long
chains of more complex molecules. CH4 Methane is one such
hydrocarbon.
Types of Petroleum: There are three general types of

petroleum:
1. Crude oil,
2. Natural gas, and
3. Semi-solid and Solid forms.
1. Crude oil refers to liquid petroleum as opposed to refined

oil. These are liquid hydrocarbons that contain varying
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
2 Fundamentals of Petroleum Exploration fo
n ~;
k ; k k f D r o
k~ e
Notes amounts of dissolved gases, bitumens, and other impurities.

__________________ In the raw state, crude oil resembles ordinary lubricating
__________________ oil. It is immiscible with water and has a density less than
that of sea water -- thus, crude oil floats on water. Crude
__________________
oil is however, soluble in naphtha, carbon disulfide, ether,
__________________
and benzene.
__________________
__________________
__________________
__________________
__________________
__________________
Thick crude oil. Lighter crude oil
Very light crude oil. Petroleum in solid state at

room temperature
Figure 1
2. Natural gas is petroleum gas as distinguished from

manufactured gas. Natural gas consists of lighter paraffin
hydrocarbons (hydrocarbons of the methane series), the
most abundant being methane gas (CH4).
3. Semi, and solid forms are called heavy hydrocarbons

and bitumens. They comprise materials such as asphalt,
tar, pitch, albertite, or any number of names depending on
their individual characteristics and local usage.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Nature of Petroleum Notes
__________________
The basic components of petroleum and natural gases are __________________
mixtures of hydrocarbons, carbon and hydrogen being the only
__________________
elements essential to their composition. A great number of
hydrocarbons occur in nature while even more organic and __________________
synthetic hydrocarbons are routinely prepared in the laboratory __________________
and in chemical plants. The components of crude oil can be __________________
classified into two hydrocarbon series: methane series and the __________________
naphthalene series.
__________________
__________________
__________________
Methane CH4 Ethane C2H6
Butane C4H10 Benzene C6H6
Figure 2
Crude oil belonging to the methane series is also referred to as

paraffin. Paraffins are straight-chain hydrocarbons having a
general formula of CnH2n+2. The four principal types of paraffins
are methane (CH4), ethane (C2H6), propane (C3H8), and butane
(C4H10) with each heavier molecule adding one CH2 molecule
to the preceding compound.
Another type of crude oil is that belonging to the naphthalene

series. It contains carbon ring compounds having the general
formula CnH2n. These are called cycloparaffins with the most
common being cyclopropane (C3H6) and cyclobutane (C4H8).
However, the molecular structures for this group of
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes hydrocarbons can contain long, branched chains with complex

__________________ rings, such as C30H50OH.
__________________
Of the two types of crude oil, paraffin or methane series oil is
__________________
the most prized, but it comprises less than 2% of the total world
__________________ supplies. Crudes dominated by naphthenic components are
__________________ called asphalt-based oils. About 15% of the total world supply
__________________ of crude is this type; it is also called black oil. However, the
vast majority of crude oils are a mixed base of some combination
__________________
of paraffin and naphthalene. Natural Gas consists of
__________________
hydrocarbons not condensable at atmospheric temperatures
__________________ (68F) (20C) and atmospheric pressure. Natural gas comprises
__________________ the first four members of the paraffin series. If the natural gas is
comprised almost entirely of methane, it is referred to as dry
gas. But if the ethane content in methane exceeds 5%, it is referred
to as a wet gas.
There are three (3) distinct types of natural gas based upon their
origin:
1. Petroleum gas: formed as a natural by-product during

the generation of petroleum. It is often dissolved within
the liquid hydrocarbon or in a free gas phase associated
with the oil pool.
2. Coal gas: formed by the modification of coal through the

introduction of heat, pressure or other natural processes.
Coal gas is the source of most of the world's supply of
commercial natural gas, and,
3. Bacterial gas: forms during the low temperature

alteration of organic matter at or near the earth's surface.
Bacterial gas has no direct correlation with petroleum; a type of

bacterial gas is marsh gas which forms in stagnant waters
containing decomposing vegetation. Mineral gas is a term
restricted to the various gases given off during igneous activity,
but this type of gas has no relationship to hydrocarbons.
Liquefaction of natural gas can be induced by lowering the
temperature significantly. Methane, for example, requires a
temperature of -160C.
Petroleum, a mixture of carbon, hydrogen and oxygen, is rarely

found in nature in a pure form without impurities. Of the three
major impurities, sulfur, nitrogen, and oxygen, sulfur is seldom
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
absent from crude oil and can be found even in minute amounts. Notes
However, crude oil seldom has sulfur concentrations greater than __________________
3% with the higher concentrations restricted to heavy crude. __________________
Some sulfur may be in elemental form in solution or as H2S
__________________
(hydrogen sulfide). Crude containing hydrogen sulfide (H2S) is
referred to as sour crude. High sulfur crude oil costs more to __________________
refine which means that future oil supply costs will increase __________________
future retail prices for gasoline. Moreover, compounding this __________________
problem, most refineries are unable to process the higher sulfur
__________________
crude oil without major refinery modifications. Sweet crude is
crude oil that contains less than 0.1% sulfur but such deposits __________________
have declined significantly since the 1960s. Sour gas refers to __________________
natural gas containing hydrogen sulfide (H 2 S). Similar __________________
restrictions apply to this type of natural gas as well. The H2S
must be extracted during processing of gas before the gas can
be utilized by both industrial and domestic users. Sour gas is
typically found in carbonate reservoirs; concentrations greater
than 100 ppm are considered destructive because of the corrosive
nature of H2S.
Nitrogen (N) is another major impurity in petroleum, though it

is related primarily to asphalt content. Concentrations greater
than 0.02% N are considered high, but in petroleum originating
from some areas of the world such as parts of Europe, it can
exceed 90%. Nitrogen must also be removed during refining
process; this requires low temperatures. The nitrogen can be
recovered, and often is, and used as an injectant in the secondary
recovery of light oils. Oxygen is the third major impurity found
in petroleum. Oxygen compounds in crude oil form acids while
such compounds in natural gas are in the form of carbon dioxide
(CO 2). The latter is, in itself, a natural gas, but it is non-
combustible. Concentrations of oxygen vary widely: Some gas
fields in the United States (Utah, Wyoming) for example, contain
greater than 90% O2. Excess oxygen must be removed during
processing and refining.
Another major impurity found in petroleum is heavy metals.

These are primarily Vanadium and Nickel and are the most
unusual constituents of crude oil. Vanadium, a high strength
alloy in steel, is the most common and is found in concentrations
typically varying from 30 - 1100 ppm. Venezuela crude contains
more vanadium (by volume) in its crude oil than total world
demand for the element. Burning the crude oil yields a
vanadium-rich ash. Vanadium is generally associated with high
sulfur content (H2S) petroleum.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Nickel, the second heavy metal impurity, is generally associated

__________________ with crude that is low in sulfur content. Both impurities,
__________________ vanadium and nickel, must be removed during the refining
process.
__________________
__________________
The physical properties of petroleum:
__________________
__________________ The physical properties of petroleum are controlled by its
chemical composition. The most readily observed parameters
__________________
are: specific gravity, viscosity, and color.
__________________
__________________ Specific Gravity is defined as the ratio between weight of a given
__________________ volume of material and weight of an equal volume of water at
4C. Oils generally lie between 0.73 ~>1.0 with paraffin-based
oils being commonly light. Conversely, asphalt-based
(naphthenic components) oils are almost always heavy. The units
of measure are degrees and are read directly from a hydrometer.
The symbol for specific gravity is the Greek letter (rho). The
petroleum industry uses an API (American Petroleum Institute)
scale to grade crude oil. The relationship between specific gravity,
density, and traditional oil industry volumetric measurements
are as follows:
API 30 33 36 LPG
gravity 0.876 0.860 0.845 0.570
bbl per long ton 7.31 7.45 7.58 12
As the API values increase (top row), specific gravity decreases,

but the volume of product per long ton increases. Why is this
important? Because, more product per long ton generates more
revenue for the same fixed cost of extracting the product from
the earth.
An API value greater than 30 means oils are considered light,

API values between 30 and 22 mean an oil is considered to be
of medium weight, while a value of below 22 implies the
hydrocarbons are heavy crudes. API values below 10 API are
called extra-heavy crude while API values above 50 are not
really oils but rather condensates or distillates.
Viscosity is defined as the internal friction of a liquid causing its

resistance to change form; it is the ratio of stress to shear per
unit time. Shear in liquids is not constant but is proportional to
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
time. The symbol is the Greek letter (eta). Viscosity varies Notes
directly with density; it is a function of the number of carbon __________________
(C) atoms and the amount of gas dissolved in the oil. As the gas __________________
content increases, viscosity decreases. A high viscosity means
__________________
less fluid (flows like cold syrup) while a low viscosity means
__________________
more fluid (flows like warm motor oil). This parameter is
important when transporting petroleum products through __________________
pipelines. __________________
__________________
Color is used in conjunction with refractive indices for
identification of oil types under the microscope. Paraffinic oils __________________
are light in color, yellow to brown in transmitted light and green __________________
in reflected light. Asphalt-based oils are black and are known __________________
as black oils.
Industry classification of crude:
The oil industry classifies "crude" by the location of its origin

(e.g., "West Texas Intermediate, WTI" or "Brent") and often by
its relative weight or viscosity ("light", "intermediate" or
"heavy"); refiners may also refer to it as "sweet", which means it
contains relatively little sulfur, or as "sour", which means it
contains substantial amounts of sulfur and requires more refining
in order to meet current product specifications.
The world reference barrels are:
Brent Blend, comprising 15 oils from fields in the Brent

and Ninian systems in the East Shetland Basin of the North
Sea. The oil is landed at Sullom Voe terminal in the Shetland
Islands. Oil production from Europe, Africa and Middle
Eastern oil flowing West tends to be priced off the price of
this oil, which forms a benchmark.
West Texas Intermediate (WTI) for North American oil.
Dubai used as benchmark for the Asia-Pacific region for

Middle East Oil
Tapis (from Malaysia, used as a reference for light Far East

oil)
Minas (from Indonesia, used as a reference for heavy Far

East oil)
The OPEC Basket consisting of

Arab Light Saudi Arabia
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Bonny Light Nigeria

__________________
Fateh Dubai
__________________
__________________ Isthmus Mexico (non-OPEC)
__________________
Minas Indonesia
__________________
__________________ Saharan Blend Algeria
__________________ Tia Juana Light Venezuela
__________________
OPEC attempts to keep the price of the Opec Basket between
__________________
upper and lower limits, by increasing and decreasing production.
__________________
This makes the measure important for market analysts. The
OPEC Basket, including a mix of light and heavy crudes, is
heavier than both Brent and WTI.
Bulk Petroleum Products

Crude oil consists of a very complex range of different
hydrocarbons. These form precursors for a variety of specially
products and the entire host of petrochemical products and the
entire host of petrochemical products, apart from the bulk
petroleum products. The bulk petroleum products, however, are
mainly the following:
Liquified petroleum gas (L.P.G.)
Naphtha
Motor spirit (M.S.)
Kerosene
Aviation turbine fuel (A.T.F.)
High speed diesel oil (H.S.D)
Light diesel oil (L.D.O.)
Furnace oil (F.O.)
Bitumen
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Some of the end-uses of the above bulk petroleum products are Notes
described below. __________________
__________________
LPG (Liquified Petroleum Gas) __________________
__________________
This is generally a mixture of propane and butane. At
__________________
atmospheric temperature and pressure it is gas. It has therefore
to be stored under pressure to keep it liquified; hence the name __________________
LPG. __________________
__________________
LPG is used largely as a domestic fuel. It is also invaluable for
__________________
use as a fuel in certain industries such as glass manufacture due
to its being a clean and a convenient fuel. __________________
LPG is also a good feedstock for the manufacture of various

petrochemicals.
Naphtha
The most important usage of Naphtha is in the production of
Motor Spirit. It is partly blended direct into M.S. and partly
processed in a catalytic reforming unit to produce high octane
number reformate. Reformate is then blended into the M.S. pool.
Naphtha is also an important feedstock for fertilizer
manufacture.
Steam cracking of Naphtha produces a large variety of olefins

including ethylene and propylene which are the precursors for
various petrochemicals.
Motor spirit
This is a blend of a variety of light hydrocarbons such as straight
run naphtha, reformate, cracked gasoline from crackers,
alkylates, etc. Octane rating of M.S. is important as an index of
the M.S.s anti-knock property which enables the modern high
compression ratio internal combustion engines to be so suitable
for automotive purposes.
Kerosene
While in India, kerosene is largely used for illumination,
elsewhere it is used for heating purposes. A special cut of
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Kerosene can be processed for the manufacture of Linear Alkyl

__________________ Benzene used as a detergent.
__________________
__________________ A.T.F. (Aviation Turbine Fuel)
__________________
Aviation turbine fuel, also called jet fuel, is becoming an
__________________
increasingly important fuel with the development of aviation
__________________
industry and with the phasing out of the earlier generation of
__________________ piston aero-engines. This is a kind of a kerosene cut with certain
__________________ important specifications such as the freezing point of ATF should
__________________ be below 47C.
__________________
HSD (High Speed Diesel)
This is an important petroleum product used for automotive

purposes in compression ignition engines. It is an important fuel
used for road, rail and marine transport systems.
LDO (Light Diesel Oil)
This is an inferior kind of gas oil used as fuel in low speed engines
largely used in lift irrigation sector in India.
FO (Fuel Oil)
This is used in a variety of industrial applications as fuel in

furnaces.
Bitumen
The bulk grades of bitumen are used for road making
Units used in Oil and Gas industry
Some important units used in oil and gas industry are:
Crude oil volume is usually measured in Barrels. One barrel

holds 42 gallons (159) liters. Weight or mass of crude in India is
in metric tons. A barrel of average crude oil weighs 0.150 tons
as a thumb rule. It depends on the density of crude oil.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Oil production capacity or refinery capacity are expressed in Notes
barrels per day (BPD). Roughly 20,000 BPSD is equivalent to 1 __________________
million tons per year crude taking an average density of crude. __________________
__________________
Commonly used measurement units in petroleum
industry are: __________________
__________________
__________________
O il and G as R eference T ools
O ne barrel of crude oil O ne m etric ton of crude __________________
equals: oil equals: __________________
__________________
42 gallons 2,204 pounds
5,800,000 BTU of 7.46 barrels of __________________
energy dom estic crude oil
5,614 cubic feet of 6.99 barrels of
natural gas foreign crude oil
0.22 tons of bitum inous
coal
O ne cubic foot of natural gas O ne cubic m eter of

equals: natural gas equals:
7.48 gallons 35.314 cubic feet

1,030 B TU of energy
0.000178 barrel of
crude oil
0.00004 tons of
bitum inous coal
O ne short ton of bitum inous coal equals:
2,000 pounds
26,200,000 BTU of energy
4.52 barrels of crude oil
25,314 cubic feet of natural gas
Importance of petroleum
Oil is one of the most important natural resources known to

mankind. For most societies in the world, oil is the principal
natural resource that fuels their economies.
In this age characterised by major leaps in technology related to

communications and information processing, why are we so
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes concerned about a natural resource like oil? The reason is simple.
__________________ Nearly 98% of everything we do is in some way related to crude
__________________ oil. Heat for your home, gas for your car, 2 liter plastic bottles of
cola beverages, and petroleum jelly are just a few examples of
__________________
products dependent on energy or raw materials extracted from
__________________
crude oil.
__________________
__________________ The United States has the highest standard of living in the world,
as well as the largest economy. Why? Because they have always
__________________
tried to maintain control over the supply, as well as price, of oil.
__________________
The growth of the oil industry since the 1990s is determined by
__________________ the laws of supply and demand. Oil and the energy it represents
__________________ is the driving force behind much of the worlds realpolitik.
As democracy and capitalism spread throughout the world,

global oil consumption is at record levels. Throughout Latin
America, Russia, India and Asia, economic growth is
accelerating at a remarkable pace, much faster than that seen
in the U.S., while the economy is currently in the doldrums.
Summary
In this section we have talked about what are the various
types of hydrocarbons and their basic properties and
chemical composition, to clearly define the nature and
characteristics of what are known as hydrocarbons. The
various products from oil and gas were also identified.
Besides this, we have also discussed about commonly used
units for measurement of weight and volume of petroleum.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
UNIT 2 Basic Geology 13
Notes
Unit 2 __________________
__________________
Basic Geology __________________
__________________
__________________
Objectives
__________________
After reading this unit you will be able to:
__________________
Explore the properties of the three main types of rock.
__________________
Understand the concept and importance of the Geologic time
scale. __________________
__________________
Rock Types
There are three principal types of rock: Igneous, Sedimentary
and Metamorphic. The classification of rocks within these groups
aims to give an understanding of both what the rock looks like
and how it was formed.
Igneous Rocks
Igneous rocks are rocks that have cooled from a molten state,
called "magma". When the magma cools and solidifies, the
resulting rock will reflect the conditions under which it cooled,
and the chemical composition of the magma. These conditions
are indicated by the grain size and color of the rocks respectively.
Individual crystals crystallize from the magma and grow until
they come into contact with another crystal, producing an
interlocking texture.
If magma cools deep underground, the rate of cooling is very

slow, allowing time for large crystals to form. The resulting rock
is coarse-grained, with individual minerals easy to see with the
naked eye. These are known as intrusive rocks, as the magma
intruded into pre-existing rocks before it cooled.
When magma erupts through volcanic vents to form lava, it

cools very rapidly at the earth's surface. The resulting rock is
very fine-grained, with most minerals hard to distinguish
without a hand lens. These are known as extrusive rocks, because
the magma extruded to the surface before it cooled.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Grain size, therefore, gives an indication of the conditions under

__________________ which the magma solidified to form rock.
__________________
About 72% of the earth's crust consists of oxygen (45.2wt %)
__________________
and silica (27.2wt %). The chemical composition of magma is
__________________ therefore largely determined by the degree these elements are
__________________ present in the molten material. The mineral quartz is composed
__________________ solely of silica and oxygen, so the proportion of quartz in a rock
is a good guide to its bulk chemical composition. The other major
__________________
mineral (actually a mineral group) is feldspar, which also
__________________
contains aluminium, calcium, sodium and potassium. Quartz
__________________ and feldspar are both light-colored minerals. Minerals that are
__________________ low in the above elements tend to be higher in iron and
magnesium. These minerals tend to be dark colored. A rock with
a large amount of silica will therefore tend to be light-colored,
whereas a rock with low silica tends to be dark-colored.
Color, therefore, gives an indication of the chemical composition

of the magma that solidified to form a rock.
Grain size and color can therefore be used to give a first-pass

classification of igneous rocks.
Light-colored <-------------> Dark-colored
Coarse grained GRANITE Diorite GABBRO
Fine grained RHYOLITE Andesite BASALT
There are, of course, many variations within and between these

groups.
Sedimentary Rocks
Sedimentary rocks are formed from the accumulation of particles

of pre-existing rocks, organic debris, and the precipitation of
dissolved chemicals. The classification of sedimentary rocks aims
to indicate the conditions under which the sediments settled,
and the types of sediment accumulating.
Clastic sedimentary rocks
One set of sedimentary rocks consists of mineral grains, or clasts,

that occur in sediments. These minerals - quartz and clays - are
made by the breakdown and alteration of igneous and
metamorphic rocks. Look around you at where the world's clastic
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
sediment goes: sand and mud is carried down rivers to the sea, Notes
mostly. Sand is made of quartz, and mud is made of clay __________________
minerals. As these sediments are steadily buried over geologic __________________
time, they get packed together under pressure and low heat,
__________________
not much more than 100C.
__________________
In these conditions the sediment is cemented into rock: sand __________________
becomes sandstone and clay becomes shale. If gravel or pebbles __________________
are part of the sediment, the rock that forms is conglomerate. If
the rock is broken and recemented together it is called breccia. __________________
__________________
Organic sedimentary rocks __________________
__________________
Another type of sediment actually forms in the sea as microscopic
organisms - plankton - build shells out of dissolved calcium
carbonate or silica. Dead plankton steadily showers their dust-
sized shells onto the seafloor, where they accumulate in thick
layers. That material turns to two more rock types, limestone
(calcium carbonate) and chert (silica).
Still another type of sediment forms in certain kinds of swamps

where dead plant material builds up into thick layers; after
burial, this material becomes coal. There happen to be no coal
swamps around today, because conditions do not favor them.
The sea needs to be much higher. Most of the time, geologically
speaking, the sea is hundreds of meters higher than today. That's
why we have sandstone, limestone, shale and coal over most of
the central United States and elsewhere around the world's
continents. The other way that sedimentary rocks become
exposed is when the land rises. This is common around the edges
of the Earth's lithospheric plates.
Chemical sedimentary rocks
These same ancient shallow seas sometimes allowed large areas

to become isolated and begin drying up. As the seawater grows
more and more concentrated, minerals begin to come out of
solution, starting with calcite, then gypsum, then halite. The
resulting rocks are certain limestones or dolomites, gypsum rock,
and rock salt respectively. These rocks, called evaporites, are also
part of the sedimentary clan.
Sedimentary rocks are stories
Each type of sedimentary rock has a story behind it. The beauty
of sedimentary rocks is that their strata are full of clues to what
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes the past world was like. Those clues might be fossils, marks left
__________________ by water currents, mud cracks or more subtle features seen under
__________________ the microscope or in the lab.
__________________
From these clues we know that most sedimentary rocks are of
__________________ marine origin, usually forming in shallow seas. But some
__________________ sedimentary rocks formed on land: clastic rocks on the bottoms
__________________ of large freshwater lakes or as accumulations of desert sand,
organic rocks in peat bogs or lake beds, and evaporites in playas.
__________________
These are called continental or terrigenous (land-formed)
__________________
sedimentary rocks.
__________________
__________________ The most common sediments are clastic or detrital sediments
that are produced from the breakdown of pre-existing rocks.
Grains are typically rounded to some degree and form point
contacts with other grains, rather than being interlocked. Detrital
sedimentary rocks are classified according to grain size.
Rocks derived from organic sediments are classified by the type

of organisms.
Rocks derived from chemically precipitated sediments are

classified by the type of inorganic material precipitated.
Metamorphic Rocks
Metamorphic rocks are rocks that have altered their texture and
mineralogy due to changes in temperature and pressure. The
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
classification of metamorphic rocks aims to indicate the pressure- Notes
temperature conditions that the rock was subjected to and the __________________
type of rock it was before it was metamorphosed. __________________
__________________
Rocks buried deep within the earth's crust are subjected to
directed stress. Their constituent minerals become aligned to the __________________
direction of least stress and they develop a layering, known as a __________________
foliation. Because large areas are affected, this type of __________________
metamorphism is known as regional metamorphism. With
__________________
increasing temperature and pressure, the rocks tend to become
__________________
progressively coarser.
__________________
If rocks are intruded by a large body of magma, the adjacent __________________
rocks re-crystallize due to the heat. There is no directed pressure
involved, so a foliation does not develop. As rocks are poor
conductors of heat, the zone of metamorphism is restricted to
the area immediately surrounding the intrusive body. Because
the metamorphism only affects a relatively narrow contact zone,
this type of metamorphism is called contact metamorphism.
Regional metamorphism Contact
M/m
low P, low T <----------> high P, low P, high T
high T
Mudstone slate schist gneiss hornfels
Basalt / greenschist amphibolite granulite hornfels
gabbro
Granite / (granite) foliated granitic (granite)
rhyolite granite gneiss
Sandstone < - - - - - - - quartzite - - - - - - - > quartzite
Limestone < - - - - - - - - marble - - - - - - - - > marble
Common metamorphic rocks include schist, marble, and gneiss.

Sedimentary rock shale (formed mostly of clay sediments) when
buried and heated to high temperatures (300-500C) becomes
transformed or metamorphosed into schist.
The Geologic Time Scale
By modern scientific calculations, the earth is many millions of

years old. The Absolute Geologic Time Scale has been developed
by using a process called "Isotopic Dating", in which the decay
rates of certain radioactive materials are established and
measured, and used as "clocks" to calculate the ages of various
rocks.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
Earth's history is subdivided into eons, which are subdivided

into eras, which are subdivided into periods, which are
subdivided into epochs. The names of these subdivisions, like
Paleozoic or Cenozoic, may look daunting, but to the geologist
there are clues in some of the words. For example, zoic refers to
animal life, and paleo means ancient, meso means middle, and
ceno means recent. So the relative order of the three youngest
eras, first Paleozoic, then Mesozoic, then Cenozoic, is
straightforward.
All of geologic time, from the Earth's origin about 4600 million
years ago to today, is divided into ten eras that make up three
eons. The first two eons are also informally referred to as
Precambrian time. Precambrian is an established informal name
for the 4 billion years of Earth history before hard-bodied
organisms arose at the beginning of the Cambrian Period, earliest
division of the Phanerozoic Eon. Phanerozoic means "visible life,"
referring to the first appearance of hard-shelled fossils at the
beginning of the Cambrian Period. Earlier life, during
Precambrian time, consisted entirely of soft-bodied forms that
are rarely fossilized. The names of the three eras in the
Phanerozoic eon mean "old life," "middle life" and "recent life."
The Proterozoic and Phanerozoic eons are each further divided

into periods. The Phanerozoic periods are divided in turn into
epochs, and epochs into ages.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Fossils are the recognizable remains, such as bones, shells, or Notes
leaves, or other evidence, such as tracks, burrows, or __________________
impressions, of past life on Earth. Scientists who study fossils __________________
are called paleontologists. Remember that paleo means ancient;
__________________
so a paleontologist studies ancient forms of life. Fossils are
__________________
fundamental to the geologic time scale. The names of most of
the eons and eras end in zoic, because these time intervals are __________________
often recognized on the basis of animal life. Rocks formed during __________________
the Proterozoic Eon may have fossils of relative simple organisms, __________________
such as bacteria, algae, and wormlike animals. Rocks formed
__________________
during the Phanerozoic Eon may have fossils of complex animals
__________________
and plants such as dinosaurs, mammals, and trees.
__________________
The Petroleum Geologist must know the relative sequence of
the deposition, and the time period to which they belong. That
is because that certain conditions existed on earth during each
of the geologic time periods which help the petroleum geologist
to interpret rocks in a certain area.
Also, petroleum geologists are mainly interested in rocks from

the Cenozoic, Mesozoic, or Paleozoic Eras. This is because almost
all of the oil and gas found so far is contained within these
rocks...600 million years old, or less. These rocks represent only
a small fraction of the total age of the earth.
Summary
In this section we have learned about three major rock types
(igneous, sedimentary and metamorphic) based on visible
physical characteristics and understood how these rocks
formed. We also got an overview of the geological time scale,
Cenozoic, Mesozoic, Paleozoic, and Precambrian Eras.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
UNIT 3 Oil Formation 21
Notes
Unit 3 __________________
__________________
Oil Formation __________________
__________________
__________________
Objectives
__________________
__________________
Explain the concept of origin of Petroleum and its generation in
reducing environment and suitable temperature conditions __________________
__________________
__________________
Oil Formation
Accumulation of organic material capable of forming petroleum
can occur in a number of different ways. Ideal environments
are those which accumulate abundant organic material in non-
oxidizing conditions. This can occur near the edge of larger
sedimentary basins, behind barrier reefs, or in lagoon areas,
where water circulation is more restricted. This is possible in
smaller water body seas that may be connected to a larger ocean,
or it may be isolated. If it is isolated, there is less circulation,
and hence less oxygen. This situation is good for forming oil,
because less of the organic material gets oxidized. The type of
organic material which is deposited determines the outcome of
the petroleum. Land derived organic material tends to produce
more natural gas than kerogen. Marine derived organic material
tends to produce more kerogen than natural gas.
Conditions for Oil and Gas Formation

There are four requirements necessary to form an oil deposit:
1) there must be a source rock, 2) there must be a heating event,
3) there must be a reservoir rock, and 4) there must be a trapping
mechanism. The source rock must contain abundant organic
matter. The best source rocks are organic-rich shales, limestones
and sandstones which contain 0.5 % to 5 % organic matter. The
organic material liquefies during the heating event, converting
to hydrocarbons in the process. The first hydrocarbons to form
are called kerogen, which consists of carbon (69-80 %), Hydrogen
(7-11 %), Nitrogen (1.25-2.5 %), Sulfur (1-8 %), and Oxygen
(9-17 %). Kerogen becomes crude oil when the oxygen and
nitrogen are removed in some manner.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes The fluid that forms initially is a mixture of oil and water, but
__________________ these separate during the changes over time of the oil deposit.
__________________ Oil does not mix with water, is less dense than water, and seeks
a higher position in the rocks. This happens by a slow migration
__________________
process where the oil moves through minute spaces in the rocks.
__________________
Gas also separates out of the oil. Since the gas is a vapor with
__________________ the lowest density, it seeks the highest possible position
__________________ (Figure 1).
__________________
__________________
__________________
__________________
Figure 1: Cross section showing separation of oil, gas and water

due to immiscibility and density differences.
Oil Maturity
Oil can form in only a restricted temperature range. When a
formation is heated to this temperature range, it is said to be
"mature".
With a thermal gradient less than around 18C per km, petroleum
does not form as the pressure inhibits the movement of the
volatiles. At a thermal gradient more than 55C per km,
petroleum may form, but at these pressures it is highly unlikely
that they would be retained in strata for periods long enough to
form petroleum deposits.
Major oil generation starts at about 60 and reaches an optimum

at about 100. Oil generation dies out at around 140C and only
methane (CH4) and other hydrocarbon gases are produced. At
temperatures above 200C, all the organic material is further
broken down and destroyed. It is therefore very important to
know the thermal maturity of source rock. It is of no use looking
for petroleum deposits that have previously been heated beyond
200C, nor for oil in rocks that have been heated beyond 140C.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Borehole temperatures only give the present temperature and Notes
not what temperatures may have been reached in the distant __________________
past. Palaeotemperature measurements are done by a variety of __________________
methods, including the ratio of total organic carbon to residual
__________________
carbon, clay mineral diagenesis, electron spin resonance, and
__________________
fluid inclusion studies, but the most commonly used methods
are by vitrinite reflectance and pollen color changes, both of __________________
which can be calibrated to temperature. Pollen turns from yellow __________________
to orange, brown and black when heated and vitrinite becomes __________________
progressively more reflective when heated.
__________________
It is estimated that less than 0.1% of organic matter originally __________________

buried in sediment is eventually trapped to form an oil or gas __________________
pool. The fact that nearly 60% of petroleum resources are to be
found in strata of Cainozoic age reflects the fact that older sources
have had longer time to escape and/or to be sufficiently heated
to have broken down the organic material. It does not necessarily
mean that older rocks produced less petroleum.
Theories of origin
There are two theories of origin: Organic (bionic) or Inorganic
(abionic).
Inorganic Hypothesis: Early theories postulated an inorganic

origin when it became apparent that there were widespread
deposits of petroleum throughout the world. Dmitri Mendele'ev
(1877), a Russian and the father of the periodic table of elements,
reasoned that metallic carbides deep within the Earth reacted
with water at high temperatures to form acetylene (C2H2) which
subsequently condensed to form heavier hydrocarbons. This
reaction is readily reproduced in the laboratory. Other hypotheses
(Berthelot, 1860, Mendele'ev, 1902) were a modification of the
acetylene theory. They theorized that the mantle contained iron
carbide which would react with percolating water to form
methane: FeC2 + 2H2O = CH4 + FeO2 The problem was and still
is the lack of evidence for the existence of iron carbide in the
mantle. These theories are referred to as the deep-seated
terrestrial hypothesis.
Another inorganic hypothesis was suggested by Sokoloff (1890)

who proposed a cosmic origin. His theory was one of
hydrocarbons precipitated as rain from original nebular matter
from which the solar system was formed and then ejected from
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes earth's interior onto surface rocks. This theory and others like it
__________________ are referred to as the extraterrestrial hypothesis.
__________________
20th Century variants and a renewed interest in the inorganic
__________________
mode of origin by others was caused by two discoveries: existence
__________________ of carbonaceous chondrites (meteorites) and the discovery that
__________________ atmospheres containing methane exist on some celestial bodies
__________________ such as Saturn, Titan, and Jupiter. The only known source for
methane is through inorganic reactions. It has been postulated
__________________
that the original atmosphere of earth contained methane,
__________________
ammonia, hydrogen, water vapor; add to this photochemical
__________________ reactions (due to UV radiation) and the result is the creation of
__________________ an oily, waxy surface layer that may have been host to a variety
of developing prebiotic compounds including the precursors of
life.
The discovery (Mueller, 1963) of a type of meteorite called

carbonaceous chondrites, also led to a renewed interest in an
inorganic mechanism for creating organic compounds.
Chondritic meteorites contain greater than 6% organic matter
(not graphite) and traces of various hydrocarbons including
amino acids. The chief support of an inorganic origin is that the
hydrocarbons methane, ethane, acetylene, and benzene have
repeatedly been made from inorganic sources. For example,
congealed magma has been found on the Kola Peninsula in
Russia (Petersil'ye, 1962) containing gaseous and liquid
hydrocarbons (90% methane, traces of ethane, propane,
isobutane). Paraffinic hydrocarbons have also been found in
other igneous rocks (Evans, Morton, and Cooper, 1964).
There are problems however, with the inorganic hypotheses.

First, there is no direct evidence that will show whether the
source of the organic material in the chondritic meteorites is the
result of a truly inorganic origin or was in an original parent
material which was organically created. Similar reasoning
applies to other celestial bodies. Second, there is no field evidence
that inorganic processes have occurred in nature, yet there is
mounting evidence for an organic origin. And third, there should
be large amounts of hydrocarbons emitted from volcanoes,
congealed magma, and other igneous rocks if an inorganic origin
is the primary methodology for the creation of hydrocarbons.
Gaseous hydrocarbons have been recorded (White and Waring,
1963) emanating from volcanoes, with methane (CH4) the most
common. Volumes are generally less than 1%, but a high of 15%
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
has been recorded. But the large pools are absent from igneous Notes
rocks. Where commercial accumulations do occur, they are in __________________
igneous rocks that have intruded into or are overlain by __________________
sedimentary materials; in other words, the hydrocarbons
__________________
probably formed in the sedimentary sequence and migrated into
__________________
the igneous material
__________________
Organic Hypothesis: This theory states that most petroleum __________________
is formed by the thermal maturation of organic matter - An
__________________
Organic Origin generated the vast reserves (pools) of oil and
__________________
gas. There are a number of compelling reasons that support an
organic development hypothesis. First and foremost, is the __________________
carbon-hydrogen-organic matter connection. Carbon and __________________
Hydrogen are the primary constituents of organic material, both
plant and animal. Moreover, carbon, hydrogen, and
hydrocarbons are continually produced by the life processes of
plants and animals. A major breakthrough occurred when it
was discovered (Smith, 1952; Smith, 1954; Stevens, 1956; Hunt,
1957; Meinschein, 1959; Erdman, 1961; Kvenvolden, 1964;
Silverman, 1965) that hydrocarbons and related compounds
occur in many living organisms and are deposited in the
sediments with little or no change.
Second were observations dealing with the chemical

characteristics of petroleum reservoirs. Nitrogen and porphyrins
(chlorophyll derivatives in plants, blood derivatives in animals)
are found in all organic matter; they are also found in many
petroleums. Presence of porphyrins also means that anaerobic
conditions must have developed early in the formation process
because porphyrins are easily and rapidly oxidized and
decompose under aerobic conditions. Additionally, low Oxygen
content also implies a reducing environment. Thus there is a
high probability that petroleum originates within an anaerobic
and reducing environment. Third were observations dealing
with the physical characteristics. Nearly all petroleum occurs in
sediments that are primarily of marine origin. Petroleum
contained in non-marine sediments probably migrated into these
areas from marine source materials located nearby. Furthermore,
temperatures in the deeper petroleum reservoirs seldom exceed
300F (141C). But temperatures never exceeded 392F (200C)
where porphyrins are present, because they are destroyed above
this temperature. Therefore, the origin of petroleum is most likely
a low-temperature phenomenon. Finally, time requirements may
be less than 1 million years; this estimate is based on more recent
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes oil discoveries in Pliocene sediments. However, physical

__________________ conditions on the Earth may have been different in the geologic
__________________ past and therefore it may have taken considerably more time to
__________________ develop liquid petroleum.
__________________ The organic theory holds that the carbon and hydrogen necessary
__________________ for the formation of oil and gas were derived from early marine
__________________ life forms living on the Earth during the geologic past
__________________ primarily marine plankton. Although plankton are microscopic,
__________________
the ocean contains so many of them that over 95% of living
matter in the ocean is plankton. The Sun's energy provides
__________________
energy for all living things including plankton and other forms
__________________
of marine life As these early life forms died, their remains were
captured by the processes of erosion and sedimentation
Successive layers of organic-rich mud and silt covered preceding
layers of organic rich sediments and over time created layers on
the sea floor rich in the fossil remains of previous life. Thermal
maturation processes (decay, heat, pressure) slowly converted
the organic matter into oil and gas. Add additional geologic time
(millions of years) and the organic rich sediments were converted
into layers of rocks. Add more geologic time and the layers were
deformed, buckled, broken, and uplifted; the liquid petroleum
flowed upward through porous rock until it became trapped
and could flow no further forming the oil and gas that we explore
for at present. But the chemistry of the hydrocarbons found in
the end product (oil, gas) differs somewhat from those we find
in living things. Thus changes, transformation, take place
between the deposition of the organic remains and the creation
of the end product. The basic formula for the creation of
petroleum (oil, gas) is:
Petroleum End Product = ([Raw Material + Accumulation +

Transformation + Migration] + Geologic Time)
Summary
This unit covers the framework of the conditions regarding
origin of petroleum. Oil and Gas are made mainly of
hydrocarbons that originated from decomposed organic
material buried under the earth's surface.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
UNIT 4 Migration of Petroleum and Geological Structures 27
Notes
Unit 4 __________________
__________________
Migration of Petroleum and __________________
Geological Structures for __________________

__________________
Petroleum Entrapment __________________
__________________
__________________
Objectives
__________________
__________________
Understand the process of primary and secondary migration and
accumulation, physical properties of reservoir rocks.
About various structures, i.e. structural, stratigraphic or combination
necessary for entrapment of oil and gas.
The Generation, migration and accumulation of

petroleum
A source rock is one rich in organic matter which, if heated
sufficiently, will generate oil or gas. Typical source rocks, usually
shales or limestones, contain about 1% organic matter and at
least 0.5% total organic carbon (TOC), although a rich source
rock might have as much as 10% organic matter. Rocks of marine
origin tend to be oil-prone, whereas terrestrial source rocks (such
as coal) tend to be gas-prone. Preservation of organic matter
without degradation is critical to creating a good source rock,
and necessary for a complete petroleum system.
Drilling rig
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes The three components of a petroleum reservoir are:

__________________
1. Source
__________________
__________________ 2. Reservoir
__________________
3. Cap rock
__________________
__________________
Source - Organic rich sediment
__________________
__________________ Total organic contents must be greater than 5%. The fine-grained,
__________________ amorphous organic matter is known as "kerogen" and is the
__________________
substance that generates hydrocarbon oil and gas. The organic
matter needs to have been deposited with reducing conditions
near sediment/water interface to preserve organic matter from
oxidation. Such conditions generally produce fine sediments
(muds) where organic debris can settle, e.g., shelf or lagoonal
muds. Source rocks are therefore relatively impermeable and
are unsuitable as a reservoir for petroleum deposits.
Kerogen types
Type I - Algal
These are very rich in hydrogen and low in oxygen. They are
particularly abundant in algae, both marine and freshwater. This
type of kerogen tends to produce oil and is present in many oil
shales.
Type II - Liptinic
These have a H:C ratio greater than 1, and are formed from
algal detritus, zooplankton and phytoplankton. Type II kerogen
can produce both oil and gas.
Type III - Humic
These have a low H:C ratio (approx. 0.84) and are produced
from the lignin of woody plants. This type of kerogen is gas
prone.
Types I and II tend to occur in marine environments and produce

oil and gas deposits. Type III is of continental origin and produces
coal deposits and coal seam gas.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Petroleum Migration and Reservoirs Notes
__________________
Migration: __________________
__________________
The movement of hydrocarbons from their source into reservoir
rocks is known as migration. The movement of newly generated __________________
hydrocarbons out of their source rock is primary migration, also __________________
called expulsion. The further movement of the hydrocarbons __________________
into reservoir rock in a hydrocarbon trap or other area of __________________
accumulation is secondary migration. Migration typically occurs
__________________
from a structurally low area to a higher area because of the
relative buoyancy of hydrocarbons in comparison to the __________________
surrounding rock. Migration can be local or can occur along __________________
distances of hundreds of kilometers in large sedimentary basins,
and is critical to the formation of a viable petroleum system.
Petroleum migrates upwards and laterally from source to

reservoir by buoyancy. Being lighter than water, petroleum will
displace groundwater and flow upwards, as well as laterally
and will seep to the surface via faults and porous overburden
unless confined under special circumstances to become trapped
and to form economic petroleum deposits. Migration of
petroleum is aided by its low surface tension, so that molecular
attraction creates a film of water around grains, whereas the
petroleum occupies the central pore spaces and is separated from
the water.
Primary Migration
Primary migration is the process by which hydrocarbons are

expelled from the source rock into an adjacent permeable carrier
bed.
Secondary Migration
Secondary migration is the movement of hydrocarbons along a

"carrier bed" from the source area to the trap. Migration mostly
takes place as one or more separate hydrocarbon phases (gas or
liquid depending on pressure and temperature conditions).
Main Driving force for migration:
Buoyancy (This force acts vertically, and is proportional to

the density difference between water and the hydrocarbon,
so it is stronger for gas than heavier oil)
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Capillary action

__________________
Regional pressure gradients
__________________
__________________
Reservoir
__________________
__________________ Reservoirs are generally bodies of rock, that for instance were
laid down as sediments on the surface maybe ten million years
__________________
ago. They could have been sand dunes, beaches, or deserts. They
__________________
could have been coral reefs, they could have been rivers that
__________________ were silted up. But as these sand bodies get buried, they tend to
__________________ get compressed, the sand grains are cemented together and
__________________ eventually they get buried to depths of three to ten to even thirty
thousand feet. And that's where oil is found today.
Characteristics of porous rock:
A suitable reservoir rock must be porous, permeable, and contain

enough hydrocarbons to make it economically feasible for the
operating company to drill for and produce them.
Porosity: Porosity of a rock is a measure of its ability to hold a

fluid. Mathematically, porosity is the open space in a rock
divided by the total rock volume (solid and space). Porosity can
be original intergranular porosity, solution porosity or fracture
porosity
Most oil and gas is produced from sandstones. Both porosity

and permeability are needed for production. Porosity creates
the spaces to hold the oil or gas. Permeability allows the oil and
gas to flow out of the rock.
Porosity is normally expressed as a percentage of the total rock

which is taken up by pore space. For example, sandstone may
have 8% porosity.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Porosity = pore volume / total rock volume x100% Notes
__________________
Most reservoirs have 10-20% porosity, primary or secondary
__________________
Primary - original intergranular voids or hollow fossils __________________

__________________
Secondary - solution of grains, and previous cements during
__________________
burial
__________________
More important is the effective porosity, where pores are __________________
interconnected. __________________
Permeability: Permeability is a measure of the amount of flow __________________

of a fluid through a rock. __________________
Permeability
Permeability in petroleum-producing rocks is usually expressed

in units called millidarcys (one millidarcy is 1/1000 of a darcy).
A petroleum reservoir may have permeability in the range of a
few millidarcys up to several darcys.
Permeability = ability to transmit fluids, measured by Darcys

law
Q = KAD / uL
Where
Q = the rate of flow; volume / unit time (cc/s)
K = permeability (darcys)
A = cross section through which flow occurs (sq cm)

OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes D = change in pressure

__________________
u = fluid viscosity (centipoise)
__________________
__________________ L = length of section
__________________
Permeability can be controlled by either porosity or fractures.
__________________
Fractures are very important since they extend further than pores
__________________
by orders of magnitude.
__________________
__________________ The unit of permeability is the Darcy, which is equal to a flow of
a fluid with a viscosity of 1 centipoise flowing at 1 cm/sec for a
__________________
pressure gradient of 1 atmosphere/cm. As rocks generally have
__________________
a permeability well below 1 Darcy, the millidarcy (md) is the
common measurement used. For a reservoir, permeability is
regarded as
fair 1.0-10 md
good 10-100 md
very good 100-1000 md
Most reservoirs have permeabilities in the range of 100 - 500

md. Lower permeabilities may be used for gas production.
In general, porosity decreases with burial. Beach sands, for

example, have a porosity of about 40%, whereas that of
compacted sandstones of petroleum reservoirs is around 5 to
25%. Porosity and permeability may also be decreased by
secondary precipitation of minerals as cement or grain
overgrowths. On the other hand, solution of material by
migrating groundwaters can increase porosity and permeability,
such as the preferential solution of fossil fragments and widening
of fractures. About 60% of the world's petroleum reserves are
held in sandstones, and 40% in limestones.
Pumping oil out of a reservoir is like sucking water from a sponge.

The first fraction comes out easily, but removing the subsequent
fractions requires increasing effort. A 30 - 40% yield is about
average. Secondary recovery techniques, such as pumping water
or gas into the reservoir at a lower level to increase the flow
may increase the yield, but only to around 50% at best.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Geological structures for petroleum entrapment Notes
__________________
TRAP: __________________
__________________
A trap consists of an impervious stratum that overlies the
reservoir rock thereby prohibiting hydrocarbons from escaping __________________
upward and laterally. This impervious stratum is called a roof __________________
rock; it intervenes to collect and hold hydrocarbons __________________
underground. The roof forms a seal, or a barrier, which creates __________________
the needed conditions for a pool. Trap material must have a
__________________
lower permeability than the existing rock material though which
the hydrocarbons are flowing. The rock forming the seal is also __________________
referred to as a capping bed. __________________
I. Structural traps
Structural traps are created when the seal or barrier is concave

upward (looking from below). The geometry is formed by
tectonic processes AFTER deposition of the reservoir beds
involved.
There are two types of structural traps:
Folds result in the physical bending (deformation) of the rock

units without breaking. The simplest form is an anticline --
creating an Anticline trap.
The rock units undergo bending very slowly over long periods
of geologic time. These types of traps are often found adjacent
to mountain ranges.
The second type of Structural trap is a Fault trap. These are the
result of fractures (breaks) within the rock units where one side
has moved relative to the other side. Faulting may be the sole
cause of the formation of a trap or more commonly, faults form
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes traps in combination with other structural features such as

__________________ folding. Often an oil field is the result of multiple faulting forming
__________________ many structural traps containing hydrocarbons.
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
II. Stratigraphic traps
Stratigraphic traps are created when the seal or barrier is

formed by changes in lithology or rock type (which also controls
porosity and permeability), DURING the deposition of the
reservoir beds involved. Lithological variations may be
depositional, as in the case of reefs, channels, and sand bars.
Lithological variations may also be post-depositional in nature;
truncations occur where erosion has removed a significant
portion of an existing tilted structure followed by deposition of
another lithologic rock unit, the latter forming the roof rock and
thus becoming the capping bed.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
III. Combination Trap Notes
__________________
A Combination trap is formed by a combination of processes
__________________
present in the sediments during the time of deposition of the
__________________
reservoir beds AND by tectonic activity that occurred in the
reservoir beds after their deposition. The geometry of this type __________________
of trap is the result of a combination of tectonic processes and __________________
changes in lithology. A common trap that would be an example __________________
of a Combination Trap is a salt dome. A salt dome is a mass of
__________________
NaCl (Sodium Chloride) generally of a cylindrical shape and
__________________
with a diameter of about 2 km near the surface, though the size
and shape of the dome can vary. This mass of salt has between __________________
pushed upward from below through the surrounding rock and __________________
sediments into its present position. The source of the salt lies as
a deeply buried layer that was formed in the geologic past. Salt
is an evaporite. Salt beds were formed by the natural evaporation
of sea water from an enclosed basin. Subsequently, the
precipitated salt layer is buried by successive layers of sediments
over geologic time until segments of it begin to flow upward
toward the surface of the earth.
Cap rock
Impermeable material to prevent further migration by buoyancy,

and to seal petroleum within reservoir. Cap rocks are commonly
of shale or of chemically precipitated evaporite deposits such as
salt or gypsum.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Other Fossil Fuel Resources

__________________
Fossil fuels are a non-renewable resource. Although coal
__________________
reserves will last for around 400 years, oil and gas reserves
__________________ will start becoming scarce during the first half of the next
__________________ century.
__________________
__________________ Oil Shale
__________________
Oil shales are poorly named. They are, in fact, shales containing
__________________ solid kerogens. To produce oil from oil shales, the rock must be
__________________ mined, crushed and heated to distil out the "shale oil" and then
__________________ refined to produce the crude oil from which various liquid
petroleum products are made.
About two-thirds of the world's known supply of oil shale is in

the U.S. It is estimated that if the U.S. developed those resources,
it could meet its crude oil requirements for 41 years at present
levels, or 31 years given a 2% rise in consumption per year.
Processing oil shale produces more CO2 per unit of energy than
conventional oil, and nitrogen oxides and sulphur dioxide and
hydrogen sulphide are also released. Large scale mining would
also need to be dealt with, and large volumes of water are
required for processing.
Tar Sands
Tar sands are similar to oil shales, entailing similar environmental
problems, but the sands are easier to mine and the kerogen is
somewhat easier to extract and refine. The world's largest known
deposits are the Cretaceous Athabaska tar sands in Alberta,
Canada. Since 1985, two plants have been supplying almost
12% of Canada's oil demands.
World resources of oil shale and tar sands are one and a half
times that of crude oil, but processing is expensive in terms of
energy resources, that is, it takes the equivalent of half a barrel
of oil to extract a barrel of oil from these sources, and that does
not include the costs of air pollution control, and cleaning of
toxic wastes. The net useful energy is likely to be around 1.2
(it takes the equivalent of 10 barrels of oil to produce 12 barrels
of oil.)
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Summary Notes
__________________
In this unit we have learned about primary and secondary __________________
migrations and accumulations. The importance of source,
__________________
reservoir, cap rocks and the petro-physical characteristics
__________________
of reservoir. The unit also covers geological structures for
petroleum exploration and their utility in hydrocarbon __________________
exploration. Salient features of different traps, i.e., __________________
structural, stratigraphic and combination have been __________________
highlighted.
__________________
__________________
__________________
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
UNIT 5 Exploration Methods 39
Notes
Unit 5 __________________
__________________
Exploration Methods __________________
__________________
__________________
Objectives
__________________
__________________
Understand the surface and subsurface methods of exploration
using Geological, Geophysical and Geochemical techniques for __________________
evaluating two Hydrocarbon potential in a basin. __________________
__________________
Enlist the methods of exploration using geological, geophysical

and geochemical techniques used for evaluating the hydrocarbon
potential in a basin.
The major task in oil exploration is to locate sites where there

are geological structures in which oil might have been trapped.
To acquire information accurately, various exploration
techniques are used.
Preliminary Studies
At early stage there are two sources of information: the available
literature and remote sensing. These methods employ basic data
gathering and mapping skills. Ore minerals and rock types and
structures must be recognized and be noted in the field.
Gathering accurate location data is a very important aspect of
this work. Surface data is used to project features to the
subsurface and interpret the subsurface geology.
The first step for the survey team is to study all the available
geological and geographical information about the area under
investigation and to prepare detailed maps.
Aerial photographic surveys are often undertaken, especially in

remote locations where little exploration and mapping has
previously taken place. Today, increasing use is made of satellite
images. Although these are taken from several hundred miles
up in space, they are able to show features only a few feet in
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes size. Besides showing the structures on the earth's surface, they
__________________ also record information, invisible to the human eye, which can
__________________ be processed to reveal subtle variations in soil type, moisture
content, mineral and vegetation distribution, all of which can
__________________
help the geologist to construct a picture of regional geology.
__________________
__________________ Satellite photographs from hundreds of miles in space can reveal
__________________ the geological structure of an area. Certain areas are then chosen
__________________
for more detailed survey. Geologists study rock outcrops and
rock specimens and the fossils they may contain for clues as to
__________________
their origin and ages.
__________________
__________________
Geological methods
A petroleum geologist working for oil exploration in an area
where rocks are seen on the surface focuses his attention on
three or four important parameters in strata related to
hydrocarbon occurrence and are accessible right on surface.
Commercially viable tools are:
1. Oil seeps
2. The second important point in geological method for surface

exploratory methods includes:
Establishment of litho-stratigraphic succession
Preparation of geologic maps of the area
Preparation of cross section geological formations
Seeps and Oilfields
A good definition of a seep is ''the surface expression of a

migration pathway, along which petroleum is currently flowing,
driven by buoyancy from a sub-surface origin'' (Clarke &
Cleverly, 1990). Knowledge of where oil and gas seeps are
emerging is therefore a key piece of evidence in reducing the
risk on source presence in a new basin as seeps originate by
leakage from buried oil and gas accumulations (figure 1).
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Notes
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
Figure 1: Seeps from Oilfields schematic
At the most basic level, this demonstrates that the basin contains
a generating source rock and hence a viable petroleum system.
Most seeps represent little but detectable volumes of oil and gas
which are not significantly depleting the reservoir. Exceptions
would be in some recent onshore fold and thrust belts where
accumulations have either been breached or redistributed to
tertiary traps and where the link between surface seeps and the
leaking traps is more complex. Such geology, however, is rarely
encountered in offshore basins, so that problem does not often
arise. Confirmation of the presence of seeps, therefore especially
in offshore basins, is encouraging and in the vast majority of
cases is not indicative of breached or depleted traps.
Establishment of litho-stratigraphic succession

Litho-stratigraphy deals with the physical lithologic or rock type
change both vertically in layering or bedding of varying rock
types and laterally reflecting changing environments of
deposition, known as facies change. Key elements of stratigraphy
involve understanding how certain geometric relationships
between rock layers arise and what these geometries mean in
terms of depositional environment. One of stratigraphy's basic
concepts is codified in the Law of Superposition, which simply
states that, in an un-deformed stratigraphic sequence, the oldest
strata occur at the base of the sequence. With this data the
thickness and succession of rock column is computed. This
column is used for preparation of geological history or
distribution of strata in time the thickness is also required for
preparation of cross-sections.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Preparation of Geological Maps

__________________
__________________
A geologic map is a special-purpose map made for the purpose
of showing subsurface geological features. Geologic maps
__________________
portray an interpretive, three-dimensional view of the rock,
__________________ sediment, and soil units arranged by their age. The time scale is
__________________ essential because it allows for interpretation and prediction of
__________________ structures and other features at and below the Earth's surface
__________________
that can have significant economic implications (for example,
oil traps, coal seams, minerals) and societal implications (for
__________________
example, natural hazards, faults, pollution/contamination). The
__________________ preparation of geologic maps is a fundamental skill that is unique
__________________ to the science of geology. Geologic maps effectively and
succinctly communicate the geologic information derived from
field-based research and are supplemented by laboratory and
office investigations.
Cross Section is an application in Geology that allows

geological features such as formation boundaries, faults, and
sand bodies to be interpreted along the planes of a cross section
by adding correlations and creating section fills.
Basin modelling
Basin modelling is the term broadly applied to a group of
geological disciplines that can be used to analyze the formation
and evolution of sedimentary basins, often but not exclusively
to aid evaluation of potential hydrocarbon reserves.
At its most basic, a basin modelling exercise must assess:
1. The burial history of the basin
2. The thermal history of the basin
By doing so, valuable inferences can be made about such matters

as hydrocarbon generation and timing, maturity of potential
source rocks and migration paths of expelled hydrocarbons.
Geophysical Surveys
These methods measure the physical properties of minerals and
rocks to suggest the presence or absence of economic
mineralization or petroleum concentration. Most important are
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
the properties of magnetism, electrical conductivity and density. Notes
The methods or techniques most commonly employed by __________________
practitioners include: __________________
__________________
Gravity: Respond to Density
__________________
Electrical: Respond to Resistivity __________________
Magnetic: Respond to Susceptibility __________________

__________________
Seismic: Respond to velocity __________________
M e th o d M e a su re d O p e r a t iv e __________________
p a ra m e te r p h y s ic a l
p ro p e rty __________________
S e is m ic T r a v e l t im e s o f D e n s it y a n d e la s t ic
r e fle c t e d / r e fr a c t e d M o d u li, w h ic h
s e is m ic w a v e s d e t e r m in e t h e
p r o p a g a tio n v e lo c it y
o f s e is m ic w a v e s .
G r a v it y S p a t ia l v a r ia t io n s in D e n s it y
th e stre n g th o f th e
g r a v it a t io n a l fie ld o f
th e E a rth
M a g n e t ic S p a t ia l v a r ia t io n s in M a g n e t ic
th e stre n g th o f th e s u s c e p t ib ilit y a n d
g e o m a g n e t ic fie ld re m a n e n ce .
E le c t r ic a l E a rth E le c t r ic a l
r e s is t a n c e / R e s is t iv it y c o n d u c t iv it y
Seismic Methods
In this type of survey, sound waves are sent into the earth where
they become reflected by the different rock layers present. The
time taken for them to return to the surface is measured. This
reveals how deep the reflecting layers are: the greater the time
intervals, the greater the depths. Such surveys can also indicate
what kinds of rock lie beneath the surface, since different rocks
transmit sound at different rates.
A seismic survey can be carried out without disturbing people

or damaging the environment. It is the most important tool for
finding and mapping potential oil fields. Sound waves are
reflected off underground rock layers and picked up by sensitive
detectors laid along the ground or towed behind a boat.
Recorded on magnetic tape and analyzed by powerful
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes computers, they reveal the underground structures which might

__________________ contain oil. Figure 1 shows simplest case of seismic reflection:
__________________ reflection from one layer, while Figure 2 shows schematic
representing a seismic section relating to real-world geology.
__________________
__________________ In remote areas, the sound waves may be produced by dynamite,
__________________ detonated several feet below the ground surface. In densely
__________________ populated or environmentally sensitive areas, where explosions
are not practical, vibrator trucks are used. Before any drilling, a
__________________
seismic survey is the only way to gather detailed information
__________________
from areas lying below the water. Dynamite used to be the
__________________ seismic source employed at sea, but nowadays airguns are used.
__________________ These generate sound waves by releasing large bubbles of
compressed air below the water surface.
There are two principal seismic methods: refraction and

reflection.
Seismic Refraction
The seismic refraction technique induces a sound wave into the
subsurface and measures the velocity of sound at intervals along
a traverse line to obtain depths and velocities of various
subsurface strata. The velocity of the strata provides an indication
of the ease with which the material can be excavated. One
advantage of the seismic refraction technique is that it allows
you to determine subsurface conditions inexpensively over large
general areas. Typical refraction survey applications include
depth to bedrock; depth to water table; dig, rip, or blast
assessment; fault location; mineral exploration; sand and gravel
reserve assessment and subsurface sinkhole and pinnacle
location.
Seismic Reflection
The seismic reflection technique is similar to the seismic refraction
technique in that a sound wave is induced into the subsurface
and recorded along a traverse line resulting in depths to different
reflectors. The advantages seismic reflection has over seismic
refraction are that there is no assumption that velocity must
increase with depth; therefore, low velocity layers can be mapped
beneath high velocity layers and deeper targets can be seen with
greater detail at short spread lengths. Typical applications of
reflection surveys include depth to bedrock, depth to water table,
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
fault location, mapping buried stream channels and other Notes
irregular bedrock topography in more detail than the seismic __________________
refraction method. __________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
Figure 1: Simplest case of seismic reflection: Reflection from one

layer
Figure 2: Schematic showing a seismic section relating to real-world

geology.
The most sophisticated seismic surveys are three-dimensional,

3-D seismic uses acoustic vibrations that are sent into the ground
and measured according to the length of time it takes for them
to reflect off the sub-surface rock layers back to the surface.
Billions of data samples are collected and processed using super-
computers to generate a detailed, three-dimensional image of
underground structures.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes 3-D seismic is an indispensable tool in exploring for new

__________________ discoveries. Geophysicists interpret the seismic data to locate
__________________ structures that may contain oil and gas deposits. Reservoir size,
shape and depth estimates as well as porosity and fluid content
__________________
can be derived from the results.
__________________
__________________ The process is very expensive: an offshore 3-D seismic survey
__________________ can cost $30,000 per square mile, depending upon the location
and conditions. Drilling a well, on the other hand, can cost
__________________
millions of dollars, so time and money spent on accurate surveys
__________________
are good investments, since they help to locate the wells correctly
__________________ and minimize the waste of dry holes.
__________________
Gravity methods
The Earth's gravitational attraction varies slightly from one place
to another on the Earth's surface. Some of this variation occurs
because the Earth is not a perfect sphere, and some is related to
differences in elevation on the Earth's surface. While these
variations in gravity are predictable and can be calculated for
each spot on the Earth's surface, other variations in gravity, such
as those caused by unknown geologic features are not
predictable.
Gravity measurements are made with an instrument known as

a gravity meter, and maps can be produced that show differences
in the pull of gravity across the state. These variations are useful
in locating geologic faults and ancient volcanoes, for example.
They can also indicate the presence of geologic basins that are
filled with unusually large thicknesses of sedimentary rocks.
Magnetic methods
The Earth's magnetism varies from place to place, much as the
gravity varies. The variation in strength of the magnetism is
caused primarily by concentrations in rocks of a magnetic
mineral called magnetite. Rocks such as granite and sandstone
have a high magnetite content relative to such rocks as limestone
and shale.
These variations in magnetism have been measured for the state

of Kansas by towing an instrument known as a magnetometer
behind an airplane. The resulting magnetic maps are useful in
finding geologic faults and geologic basins that are filled with
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
unusually large thicknesses of sedimentary rocks or buried Notes
mountains that are covered with unusually thin sediments. __________________
__________________
Electrical methods __________________
__________________
Variations in the electrical properties of Earth materials can be
__________________
measured at the Earth's surface and within drill holes. These
measurements are very often made in holes at the time of drilling. __________________
The presence of oil and gas in rocks in a drill hole is indicated by __________________
unusually high electrical resistance. __________________
__________________
Geochemical exploration __________________
Geochemical exploration for petroleum is the search for

chemically identifiable surface or near-surface occurrences of
hydrocarbons and their alteration products, which serve as clues
to the location of undiscovered oil and gas accumulations. All
surface geochemical methods assume that hydrocarbons
generated and trapped at depth leak in varying but detectable
quantities to the surface. Geochemical exploration techniques
can be direct or indirect. Direct techniques analyze small
quantities of hydrocarbons that occur in the pore space of soil,
that are adsorbed on the fine-grained portion of soil, or that are
incorporated in soil cements. Indirect geochemical methods
detect seepage-induced changes to soil, sediment, or vegetation.
Geological exploration data have found their greatest utility

when integrated with geological and geophysical data. Poorly
applied, the combination of surface and subsurface exploration
methods leads to better prospect evaluation and risk assessment.
Benefits of a geochemical exploration

The potential benefits of a successful geochemical exploration
program are many and include the following:
Directly detect hydrocarbons and/or hydrocarbon-induced

changes in soils, near surface sediments, and/or on the
sea floor.
Document the presence of a working petroleum system in

the area of interest.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Permit high-grading of basins, plays, or prospects prior to

__________________ acquiring leases or before conducting detailed seismic
__________________ surveys.
__________________
Permit post seismic high-grading of leads and prospects;
__________________ generate geochemical leads for further geological or
__________________ geophysical evaluation.
__________________
Evaluate areas where seismic surveys are impractical or
__________________ are ineffective due to geological or environmental factors.
__________________
Provide methods applicable to both stratigraphic traps and
__________________
structural traps, with the ability to locate traps invisible or
__________________
poorly imaged with seismic data.
Have little or no negative environmental impact (most

surface geochemical methods).
Summary
The unit broadly covers different types of geo-scientific
surveys, geological methods followed by geophysical
surveys. The importance of geochemical surveys in oil and
gas exploration is also highlighted.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
UNIT 6 Well Drilling and Logging 49
Notes
Unit 6 __________________
__________________
Well Drilling and Logging __________________
__________________
__________________
Objectives
__________________
__________________
Familiarize yourself to latest Onshore Drilling Technologies and
also having an idea about Wireline Logging Techniques. __________________
__________________
__________________
Well drilling is the process of drilling a hole in the ground either

for exploration of the nature of the material underground or for
the extraction of a natural resource such as water, natural gas,
or petroleum.
The earliest water wells were probably shallow pits dug by hand
in regions where the water table approached the surface,
possibly with masonry walls lining the interior to prevent
collapse. Modern drilling techniques utilize long drill shafts,
producing holes much narrower and deeper than could be
produced by human labor.
Preparing to Drill
Once the site has been selected, it is surveyed to determine its

boundaries, and environmental impact studies are done. Lease
agreements, titles and right-of way accesses for the land must
be obtained and evaluated legally. For off-shore sites, legal
jurisdiction must be determined.
Once the land has been prepared, several holes must be dug to
make way for the rig and the main hole. A rectangular pit, called
a cellar, is dug around the location of the actual drilling hole.
The cellar provides a work space around the hole, for the workers
and drilling accessories. The crew then begins drilling the main
hole, often with a small drill truck rather than the main rig. The
first part of the hole is larger and shallower than the main
portion, and is lined with a large-diameter conductor pipe.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Additional holes are dug off to the side to temporarily store
__________________ equipment when these holes are finished, the rig equipment
__________________ can be brought in and set up.
__________________
__________________ Setting the Rig
__________________
Depending upon the remoteness of the drill site and its access,
__________________
equipment may be transported to the site by truck, helicopter or
__________________ barge. Some rigs are built on ships or barges for work on inland
__________________ water where there is no foundation to support a rig (as in
__________________ marshes or lakes). Once the equipment is at the site, the rig is set
up. Here are the major systems of a land oil rig:
__________________
Anatomy of an oil rig

OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Power system Notes
__________________
large diesel engines: to provide the main source of
power __________________
__________________
electrical generators: powered by the diesel engines
__________________
to provide electrical power
__________________
Mechanical system: driven by electric motors
__________________
hoisting system: used for lifting heavy loads; consists __________________
of a mechanical winch (drawworks) with a large steel
__________________
cable spool, a block-and-tackle pulley and a receiving
storage reel for the cable __________________
__________________
turntable: part of the drilling apparatus
Rotating equipment: used for rotary drilling

swivel: large handle that holds the weight of the drill
string; allows the string to rotate and makes a pressure-
tight seal on the hole
kelly: four- or six-sided pipe that transfers rotary
motion to the turntable and drill string
turntable or rotary table: drives the rotating motion
using power from electric motors
drill string: consists of drill pipe (connected sections
of about 30 ft / 10 m) and drill collars (larger diameter,
heavier pipe that fits around the drill pipe and places
weight on the drill bit)
drill bit(s): end of the drill that actually cuts up the
rock; comes in many shapes and materials (tungsten
carbide steel, diamond) that are specialized for various
drilling tasks and rock formations
Casing: large-diameter concrete pipe that lines the drill

hole, prevents the hole from collapsing, and allows drilling
mud to circulate (mud circulation) in the hole
Circulation system: pumps drilling mud (mixture of

water, clay, weighting material and chemicals, used to lift
rock cuttings from the drill bit to the surface) under pressure
through the kelly, rotary table, drill pipes and drill collars
pump: sucks mud from the mud pits and pumps it to

the drilling apparatus
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes pipes and hoses: connects pump to drilling

__________________ apparatus
__________________
mud-return line:
__________________ returns mud from
__________________ hole
__________________
shale shaker:
__________________ shaker/sieve that
__________________ separates rock cuttings
__________________ from the mud
__________________ shale slide: conveys
__________________ cuttings to the reserve
pit
reserve pit: collects

rock cuttings
Mud circulation in the
separated from the
hole
mud
mud pits: where drilling mud is mixed and recycled
mud-mixing hopper: where new mud is mixed and

then sent to the mud pits
Drill-mud circulation system

OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Derrick: support structure that holds the drilling Notes
apparatus; tall enough to allow new sections of drill __________________
pipe to be added to the drilling apparatus as drilling __________________
progresses
__________________
Blowout preventer: high-pressure valves (located __________________
under the land rig or on the sea floor) that seal the __________________
high-pressure drill lines and relieve pressure when
__________________
necessary to prevent a blowout (uncontrolled gush of
__________________
gas or oil to the surface, often associated with fire)
__________________
__________________
Drilling
__________________
There are five basic steps to drilling the surface hole:
1. Place the drill bit, collar and drill pipe in the hole.
2. Attach the kelly and turntable and begin drilling.
3. As drilling progresses, circulate mud through the pipe and

out of the bit to float the rock cuttings out of the hole.
4. Add new sections (joints) of drill pipes as the hole gets

deeper.
5. Remove (trip out) the drill pipe, collar and bit when the
pre-set depth (anywhere from a few hundred to a couple-
thousand feet) is reached.
Once the final depth is reached, the well allows oil to flow into
the casing in a controlled manner. First, the perforating gun is
lowered into the well to the production depth. The gun has
explosive charges to create holes in the casing through which
oil can flow. After the casing has been perforated, small-diameter
pipe (tubing) is put into the hole as a conduit for oil and gas to
flow up the well. A device called a packer is run down the
outside of the tubing. When the packer is set at the production
level, it is expanded to form a seal around the outside of the
tubing. Finally, a multi-valved structure, called a Christmas tree,
is connected to the top of the tubing and cemented to the top of
the casing. The Christmas tree allows them to control the flow
of oil from the well.
Once the well is completed, they must start the flow of oil into
the well. For limestone reservoir rock, acid is pumped down the
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes well and out through the perforations. The acid dissolves
__________________ channels in the limestone that lead oil into the well. For sandstone
__________________ reservoir rock, a specially blended fluid containing proppants
(sand, walnut shells, aluminium pellets) is pumped down the
__________________
well and out the perforations. The pressure from this fluid makes
__________________
small fractures in the sandstone that allow oil to flow into the
__________________ well, while the proppants hold these fractures open. Once the
__________________ oil is flowing, the oil rig is removed from the site and production
__________________ equipment is set up to extract the oil from the well.
__________________
Well logging is a technique used in the oil (petroleum) & gas
__________________ industry for recording rock properties and thereby finding
__________________ hydrocarbon zones in the formation (below the earth's crust).
Logging procedure starts with lowering a 'logging tool' inside

oil well (or hole) down to the total hole depth to determine what
kind of the rock/s constitute the formation and to give an
estimate as to where the oil and gas (hydrocarbon) zones are.
Logging tools developed over the years basically determine the
hydrocarbons present in the pore spaces of the rocks by
formation evaluation measuring the electrical properties,
acoustic, radioactive, etc., of the rocks or fluids. Logging or
recording the rocks/oil gas zones is done when the lowered
logging tool is pulled out of the hole. This data recorded is put
on to a 'Well Log'. Well logging is usually performed when the
total depth of the hole is drilled, which could range in depth
from 1000 ft to 25,000 ft (or more).
In logging the well, four main types of equipment used are: the
downhole instrument (which measures the data), the
computerized surface data acquisition system (to store and
analyze the data), the cable or wireline (which serves as both
mechanical and data communication link with the downhole
instruments), and the hoisting equipment to raise and lower the
instruments.
The downhole instruments (or tools) are first lowered to the

bottom of the well, then slowly retrieved, probing the formations
continually by using various non-destructive techniques. This
process provides a continuous stream of data up the wireline to
the surface computer. Data are recorded on a "log" that displays
information about the formation as a function of depth. The
data are also recorded in digital format for later processing.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Notes
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
In mud Logging, a Mud Logger works when drilling is going

on. The Mud Logger analyzes the rock samples coming out of
the circulating mud/fluids off 'flow line' from the drill string/
pipe. Similar to a Well Log, a 'Mud Log' is prepared by the mud
logging company. A mud log displays the gas present in the
formation by using Gas Chromatography techniques. A mud
log also describes the formation geology.
Both 'Well and Mud logs' are transferred in 'real time' to the
operating company which uses these logs to decide how much
hydrocarbon reserves they have in the well and how long can it
produce economically.
Wireline Logging
Wireline logging is performed with a sonde or probe lowered
into the borehole or well, usually after the drill string has been
withdrawn.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Wireline logging determines which formations intersected by the

__________________ wellbore may contain hydrocarbons (typically less than 1 percent
__________________ of the well), and takes measurements to provide descriptive and
quantitative evaluations of the rock penetrated, and the type
__________________
and amount of fluid contained therein.
__________________
__________________
__________________
__________________
__________________
__________________
__________________
Other types of logging are:

Openhole logging is based on measurements of the formation's
electrical, nuclear and acoustical properties. Other openhole
wireline services include formation sampling, fluid sampling and
pressure measurements.
Cased-hole logging includes measurement of nuclear,

acoustical and magnetic properties. Other cased-hole wireline
tools include perforator guns and various production logs.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Caliper Log Notes
__________________
Caliper logs are required to assist in the quantitative __________________
interpretation of many other logs that are sensitive to borehole
__________________
diameter and wall roughness (rugosity). Compensated logs such
__________________
as density (FDC) and neutron (CNL) are corrected for these
factors. The caliper shows where deviations occur from the __________________
nominal drill bit diameter. The deflections are towards smaller __________________
radius where mud cake has accumulated in porous formations __________________
and the oversize excursions where caving has taken place. Shales
__________________
and coals are lithologies that tend to cave in. The absence of
__________________
mud cake adjacent to a porous bed may indicate a tight sand or
possible overpressure. __________________
Electrical Logs
There are a large number of electrical sondes. They are used to
measure electrical properties in three different frequency ranges:
1. DC voltages that appear spontaneously in wells and

boreholes (SP)
2. Strata and fluid resistivities (at low to medium frequencies

10 Hz to 20 kHz).
3. Dielectric constants (at high frequencies >10 MHz and up

to 1 GHz).
Summary
Drilling is the most expensive component of exploration.
The basics of drilling have been discussed in this unit. The
second part explains the about fundamentals of logging.
Logging techniques provide insight into reservoir

parameters like geometry, porosity, thickness and also
hydrocarbon potential zones.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
UNIT 7 Reservoir Geology 59
Notes
Unit 7 __________________
__________________
Reservoir Geology __________________
__________________
__________________
Objectives
__________________
__________________
Understand the Production Mechanisms of a reservoir and various
latest techniques for enhancing oil recovery from a reservoir. __________________
__________________
__________________
Introduction
A reservoir (or pool) is a porous and permeable underground
rock formation containing a natural accumulation of crude oil
that is confined by impermeable rock or water barriers. The main
objectives of studying reservoir geology are:
1. To understand the distribution of the petroleum in the

subsurface.
2. The location and monitoring of appraisal and production

wells.
3. To control production
4. The control of enhanced oil recovery programmes.
Production Mechanisms
The types of natural flow through the reservoir are known as
production or drive mechanisms. Several sources of energy exist
in the formation. In the case of liquid petroleum, the natural
energy is the expansive energy of the liquid petroleum and the
gas dissolved in the liquid petroleum at the elevated pressure at
which the petroleum is confined. In addition to the expansive
energy of the petroleum hydrocarbons, all petroleum
accumulations are associated with water. The oil accumulation
may be surrounded by water-bearing formations. This water is
subjected to elevated pressures in the subsurface. Upon
withdrawal of the fluid from the petroleum reservoir, the
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes reservoir becomes a pressure sink; the contiguous water flows

__________________ into the petroleum reservoir, displacing oil or gas toward the
__________________ well bores. In addition to expansive energies, there is also the
force of gravity acting at all times to promote segregation of the
__________________
various fluids. Gas tends to occupy the higher places in the
__________________
accumulation; oil, being denser than gas and less dense than
__________________ water, tends to occupy the intermediate position; and water
__________________ tends to underlie the petroleum. Frequently, oil fields are found
__________________ in which a part of the reservoir is liquid saturated and a part is
gas saturated. This type of accumulation is referred to as an oil
__________________
reservoir with a gas cap.
__________________
__________________ Solution-gas or depletion drive is a petroleum reservoir with no
original free gas cap and no associated active water; the principal
energy is the expansion and dissociation of gas in solution in
the oil. Water production is generally minimal. The solution-gas
drive is characterized by a rapid pressure decline and low
recovery efficiency.
Solution-gas-gas-cap drive is a petroleum reservoir containing

an original free gas cap with no associated active water.
Reservoir pressure is maintained at higher levels in most
instances (if the gas cap is not prematurely depleted), thus
improving recovery efficiency. The degree of improvement
depends on the size of the gas cap relative to the oil zone and on
the production procedure used. As with solution-gas drive, water
production is generally minimal.
Water drive is a petroleum reservoir associated with water-

bearing formations that are so active that little or no pressure
drop occurs when hydrocarbon fluids are withdrawn. Water
drive is the most efficient in maintaining reservoir pressure and
usually yields the highest recovery efficiency. Water production
varies significantly depending on structural position and nature
of the water drive.
Enhanced Oil Recovery

The Three Stages of Oil Field Development
Primary Recovery: Primary recovery produces oil and

gas using the natural pressure of the reservoir as the driving
force to push the material to the surface. Wells are often
'stimulated' through the injection of fluids, which fracture
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
the hydrocarbon-bearing formation to improve the flow of Notes
oil and gas from the reservoir to the wellhead. Other __________________
techniques, such as pumping and gas lift help production __________________
when the reservoir pressure dissipates.
__________________
Secondary Recovery: Secondary recovery uses other __________________

mechanisms - such as gas reinjection and water flooding - __________________
to produce residual oil and gas remaining after the primary __________________
recovery phase.
__________________
Tertiary Recovery: Tertiary recovery involves injecting __________________

other gases (such as carbon dioxide), or heat (steam or hot __________________
water) to stimulate oil and gas flow to induce the flow of __________________
remaining fluids that were not extracted during primary
or secondary recovery phases.
Enhanced oil recovery

Definition: Recovery of oil or gas from a reservoir by artificially
maintaining or enhancing the reservoir pressure by injecting gas,
water or other substances into the reservoir rock.
Enhanced Oil Recovery, or "EOR," is the use of any process or

technology that enhances the displacement of oil from the
reservoir, other than primary recovery methods. Enhanced Oil
Recovery methods and technologies' enhancements or
improvements of the primary recovery methods are also known
as secondary recovery methods and may be utilized in the
recovery of oil at any stage of production. Enhanced oil recovery
method refers to any recovery method other than primary and
the conventional secondary recovery methods through "flooding"
(water or fire) or through injecting steam or gas such as nitrogen
or carbon dioxide.
Worldwide, over two million barrels of oil per day (bopd) are
being produced from various EOR projects. In 1998, of 199 active
U.S. EOR projects producing a total of 759,965 bopd, 66 projects
were miscible CO2 floods accounting for over 179,000 bopd of
production. U.S. EOR from steam injection accounted for
419,349 bopd of production, while hydrocarbon gas injection
accounted for 102,053 bopd. Almost all U.S. steam floods are
located in California, because of the state's abundance of shallow,
"heavy" oil, and almost all U.S. CO2 floods are in west Texas,
because there's a source of CO2 nearby to flood the deep, "light"
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes oil reservoirs. (The above numbers do not include waterflooding,

__________________ even though waterflooding an oil reservoir is common practice,
__________________ many times as a pre-requisite to gas flooding, and accounts for
__________________
significant enhanced oil production worldwide. Today, in
California alone, active waterflood projects were injecting 2.2
__________________
million barrels of water per day adding about 140,000 bopd of
__________________
production.)
__________________
__________________ EOR projects may involve gas re-injection, carbon dioxide (CO2)
__________________ flooding or various horizontal drilling techniques.
__________________
__________________
The figure shows that USA leads in producing oil using EOR
techniques, with Venezuela second and Indonesia third.
Country-wise Production by Using EOR
On a world scale the amount of oil produced using EOR

techniques is very small (around 2% of all production).
The following table shows that by far the greatest proportion of

EOR oil is produced using steam injection (67% of total). The
next most popular process is hydrocarbon gas injection (19%)
followed by miscible CO2 injection (11%).
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Notes
W o r ld E O R P r o d u c t io n b y M e t h o d
__________________
A m o u n t P ercen t
E O R P ro cess
(M stb /d ) o f to tal __________________
S te a m 1 1 5 5 .2 6 6 .8 __________________
M is c ib le H y d ro c a rb o n G a s 3 3 6 .6 1 9 .5 __________________
M is c ib le C O 2 1 8 8 .4 1 0 .9 __________________
P o ly m e r/ S u rfa c ta n t ( C h e m ic a l) 1 6 .0 0 .9 __________________
N itro g e n 1 4 .7 0 .8 __________________
In S itu C o m b u s tio n 1 0 .0 0 .6 __________________
Im m is c ib le C O 2 6 .4 0 .4 __________________
H o t W a te r In je c tio n 2 .4 0 .1 __________________
Im m is c ib le H y d ro c a rb o n G a s 0 .0 0 .0
A variety of augmented- recovery methods have been developed

and introduced. These include:
Thermal methods
Thermal methods, particularly steam drive and steam soak, have
been commercially successful for over 30 years. Thermal
methods rely on several displacement mechanisms to recover
oil. The most important mechanism is the reduction of crude
viscosity by increasing temperature. Thermal recovery continues
to be an attractive means of maximizing the value and reserves
from heavy oil assets. However, the viscosity reduction is lower
for lighter crude oil. Therefore, thermal methods are not nearly
as advantageous for light crudes.
Solvent flooding
Solvent flooding refers to those EOR techniques whose main oil
recovering mechanism is extraction, dissolution, vaporization,
solubilization, condensation, or some other phase behavior
change involving the crude oil. It includes CO2 flooding, nitrogen
injection, natural gas injection, etc. These methods sometimes
have additional recovery mechanisms such as viscosity reduction
and oil swelling, but their primary mechanism must be
extraction.
Chemical methods
Chemical methods include polymer methods, surfactant
flooding, foam flooding, alkaline flooding, etc. The mechanisms
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes of chemical methods vary depending on the chemical material

__________________ added to the reservoir; chemical methods may achieve one or
__________________
more effects: interfacial tension reduction, wettability, alteration,
emulsification, or mobility control. The technical limitations of
__________________
chemical flooding methods are insufficient understanding of the
__________________ mechanisms involved and a lack of scale-up criteria.
__________________ Furthermore, the process should be cost-effective.
__________________
__________________ Summary
__________________
The performance of oil and gas fields depends on reservoir
__________________
drive mechanisms. The reservoir drive mechanisms affect
__________________ overall reservoir performance. The Unit also covers
productive techniques for economic operations. A variety
of augmented-recovery methods have also been discussed.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
UNIT 8 Prospect identification and Quantitative Assessment 65
Notes
Unit 8 __________________
__________________
Prospect identification and __________________
Quantitative Assessment __________________

__________________
__________________
Objectives __________________
After reading this unit you will be able to understand the terms: __________________
Oil in Place __________________
Discovered Reserves __________________
Ultimate Reserves
Prospect Identification
The information gathered from subsurface through various

methods is combined to make decisions whether to explore or
not. The process is two-fold: first, to build all the information
we have into a possible picture, or model, of subsurface geology,
layer by layer, bed by bed; and then, secondly, use this model to
predict where we might expect to locate oil or gas by drilling.
Geological modeling
The first step is to identify and recognize the successive layers

that comprise the sequence sediments in the sedimentary basin,
In case succession of strata comes up to surface outcrop, we
collect fossils to date the beds, log the nature of rocks, and
measure their thickness. In case there is no outcrop, we shall be
entirely dependent on taking information from logs, cores and
cuttings. The second supply of data is through seismic reflection
profiles and maps. Finally, the integration of seismic
interpretation with the interpretation of well logs, core
sedimentology, biostratigraphic data, etc., is done in order to
define parasequences and depositional sequence sets. As a
consequence, sequence boundaries are recognized. Defining a
sequence stratigraphic framework helps predict the distribution
of reservoir layers, source rocks and seals.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Prospect Evaluation

__________________
To define a prospect we need to have five essential requirements:
__________________
__________________ A source rock.
__________________
Measurements of source rock maturity.
__________________
__________________ Information regarding reservoir, its formation, properties,
__________________ etc.
__________________ Sediments that form seal.
__________________
Information of traps, i.e., their depth, along with the data
__________________
supported by 3D seismic survey.
Once we have data in respect of all the five sectors discussed

above, we should be able to define a prospect and go for
acquiring the license, lease, etc., and then proceed to drill.
Quantitative Assessment
In oil exploration, we are constantly dealing with uncertainties.
There is no way of knowing in advance of drilling whether or
not there is going to be any oil or gas at all down there, under
the ground, let alone how much. And yet oil companies need to
know what to expect. Similarly, once a discovery is made, there
is no way that we can know precisely how much we have found:
the geology, which controls the amounts of oil in the reservoir, is
liable to change between our information points, our wells. We
have to try to understand, or predict, just what these changes
amount to. So, until actually all of the oil has been produced,
we are involved with a greater or less degree of uncertainty about
quantities.
Before we get into this, let's understand some of the important

terms:
Oil in Place
This is the total volume of oil, measured in barrels or other units
that is present in an accumulation under the ground. It usually
refers to what was there originally, before we started to take
any of it out. We cannot regard these quantities as `reserves',
since we are never able to recover all of the oil that is down
there in the reservoir.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Reserves Notes
__________________
Reserves are those quantities of petroleum which are anticipated
__________________
to be commercially recovered from known accumulations from
a given date forward. All reserve estimates involve some degree __________________
of uncertainty. The uncertainty depends chiefly on the amount __________________
of reliable geologic and engineering data available at the time of __________________
the estimate and the interpretation of these data. The relative
__________________
degree of uncertainty may be conveyed by placing reserves into
one of two principal classifications, either proved or unproved. __________________
Unproved reserves are less certain to be recovered than proved __________________
reserves and may be further sub-classified as probable and __________________
possible reserves to denote progressively increasing uncertainty
__________________
in their recoverability.
Proved Reserves
Proved reserves are those quantities of petroleum which, by
analysis of geological and engineering data, can be estimated
with reasonable certainty to be commercially recoverable, from
a given date forward, from known reservoirs and under current
economic conditions, operating methods, and government
regulations. Proved reserves can be categorized as developed or
undeveloped.
If deterministic methods are used, the term reasonable certainty

is intended to express a high degree of confidence that the
quantities will be recovered. If probabilistic methods are used,
there should be at least a 90% probability that the quantities
actually recovered will equal or exceed the estimate.
In general, reserves are considered proved if the commercial

producibility of the reservoir is supported by actual production
or formation tests. In this context, the term proved refers to the
actual quantities of petroleum reserves and not just the
productivity of the well or reservoir. In certain cases, proved
reserves may be assigned on the basis of well logs and/or core
analysis that indicate the subject reservoir is hydrocarbon bearing
and is analogous to reservoirs in the same area that are
producing or have demonstrated the ability to produce on
formation tests.
Unproved Reserves
Unproved reserves are based on geologic and/or engineering
data similar to that used in estimates of proved reserves; but
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes technical, contractual, economic, or regulatory uncertainties

__________________ preclude such reserves being classified as proved. Unproved
__________________ reserves may be further classified as probable reserves and
possible reserves.
__________________
__________________ Unproved reserves may be estimated assuming future economic
__________________ conditions different from those prevailing at the time of the
__________________ estimate. The effect of possible future improvements in economic
conditions and technological developments can be expressed by
__________________
allocating appropriate quantities of reserves to the probable and
__________________
possible classifications.
__________________
__________________ Probable Reserves
Probable reserves are those unproved reserves which analysis
of geological and engineering data suggests are more likely than
not to be recoverable. In this context, when probabilistic methods
are used, there should be at least a 50% probability that the
quantities actually recovered will equal or exceed the sum of
estimated proved plus probable reserves.
Possible Reserves
Possible reserves are those unproved reserves which analysis of
geological and engineering data suggests are less likely to be
recoverable than probable reserves. In this context, when
probabilistic methods are used, there should be at least a 10%
probability that the quantities actually recovered will equal or
exceed the sum of estimated proved plus probable plus possible
reserves.
Discovered Reserves
Once oil has been discovered, the normal way of estimating how
much has been found is to start with the volume of the reservoir
within the closure of the trap. We then eliminate progressively
everything from this volume that is not oil. So we multiply the
bulk volume of the reservoir in the trap by those factors that
represent the non-oil volume:
Recoverable reserves =
[ BV * FILL * N / G * * (1 Sw)] * RF * Constant

FVF
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
where: Notes
__________________
BV is the volume of the reservoir formation within the
__________________
closure of the trap above the spill-point. The shape of the
__________________
trap, faulting, and the thickness of the reservoir govern it.
BV will be determined from seismic and well data, and __________________
regional and local geological interpretation. __________________
__________________
Fill is the `fill factor', which is the percentage of the bulk
volume that actually contains the oil, the volume of the gas __________________
cap and the water-bearing rock below the oil-water contact __________________
being discounted. It is affected by many factors, including __________________
the adequacy of the source rock to provide enough oil to __________________
the trap, and the quality and strength of the cap rock. If
we do not know where the gas-oil and oil-water contacts
are, then this factor may be little more than a guess; if we
do, then we can go straight to the bulk reservoir volume
containing the oil.
N/G is the net to gross ratio. Not all of a reservoir formation

is going to be sufficiently porous and permeable to
contribute oil to production. We have to discount those
parts of it that are useless and just consider the net reservoir
thickness. This will be controlled by variations in the nature
of the sediments that comprise the reservoir, meaning that
we have to try to interpret in detail the environments that
the sediments were deposited in. This can be pretty
subjective, even when we have information from a lot of
wells. What anyway should we regard as net reservoir? A
rather arbitrary porosity cut-off value is often used.
is the porosity, or rather the average porosity of the net

reservoir across the entire accumulation. We do our best
from measurements on core samples and from wireline log
interpretation, but what happens between and beyond our
well control?
Sw is the water saturation, the percentage of the porosity

that is occupied by the immovable water. Again we need
an average value for the field. We have not only all the
problems of average porosity but remember that the size of
the pores comes in here as well: the finer the sand, the higher
will be the water saturation.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes FVF is the formation volume factor. This reflects the fact
__________________ that oil under the ground in the reservoir occupies more
__________________ space than it does when we get it up to the surface; it shrinks
because gas bubbles out of it as its pressure is eased during
__________________
production. We may actually be able to measure the FVF if
__________________
we have a sample of oil collected under subsurface pressures
__________________ from the bottom of our well.
__________________
RF is the recovery factor, the proportion of the oil in the
__________________
reservoir that we can actually recover and produce. In a
__________________
sandstone reservoir, this is commonly about 50-60 per cent,
__________________ but it may be a good deal less from carbonates. It is a figure
__________________ that we cannot know exactly until we have finished
producing. So we usually have to base our estimate on prior
experience elsewhere.
A constant is needed to adjust the units. The Americans

measure reservoir volume in acre-feet: area in acres
multiplied by reservoir thickness in feet. To get an answer
to our sum in barrels of oil, we have to multiply the figure
we calculate by 7758. If we are working entirely in the
metric system, then we don't have to worry.
It will be clear to anyone that, in producing figures for all of

these factors, there must be considerable uncertainty, to say the
least. What we are doing, then, is to multiply uncertainties by
uncertainties, doubtful estimates by doubtful estimates, until we
begin to wonder whether our answer has any reality or meaning
at all. Different geologists will certainly come up with different
values for at least some of the input factors, and arrive at perhaps
wildly different answers. Who is right? Whose answer should
we use? Can we indeed believe any of them? Unfortunately we
cannot escape from the problem; companies, and governments
must have numbers that they can use for planning purposes,
even though they may be well aware that any such figures will
eventually turn out to be wrong. Most commonly these days,
and to try to be as honest and objective as possible, the problem
is tackled through a statistical technique, known as a Monte
Carlo simulation.
Instead of estimating single figures for the factors that go into

the reserves formula, for each of the factors we work out our
best estimate, having regard to all of the geology; and we also
specify the total range, from minimum possible to maximum
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
possible, somewhere within which the `true' figure must be. Then Notes
we get a computer to pick a value for each factor at random __________________
from the range we have given, but biasing its peak towards our __________________
best estimate. The computer does the sum using these values.
__________________
Then we ask it to do the same thing again, and again, and
__________________
again... maybe 500 or 1000 times. So we have a whole list of
answers, any one of which could be the real value. The list is __________________
put into order from the smallest to the largest, and then analyzed __________________
statistically. __________________
__________________
If we plot out the answers on our list falling within successive
size ranges (in barrels of oil), we shall find that the bulk of them __________________
tend to cluster round the middle (Fig.). The one that has the __________________
most answers in (= the modal class of the distribution) we can
regard as the most probable value in other words, our best
estimate. More commonly, however, we give as our preferred
figure the average of all the answers (the mean). This is because,
for this average value, we can work out the standard deviation
(the ) which will give an idea of our confidence in our answer.
Shown above are diagrammatic plots of the outputs from two

Monte Carlo simulations. The number of answers in successive
reserve ranges is plotted against the size ranges themselves.
Alternatively, one may plot the frequencies as percentages of
the total number of answers: the statistical probabilities. Note
that the preferred answer that is usually used is the mean value;
since it is about this that the standard deviation can be
calculated.
Most usefully, perhaps, we can plot out the percentages of

answers in successive size ranges cumulatively as we work down
the list (Fig.). It will give a graph which shows the probability
that the reserves will be of a certain size or more. This is what is
used to determine those reserves that may be called proven,
probable, and possible at, say, the 90, 50, and 10 per cent levels
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes of probability respectively. It is also used to assist management

__________________ in making their exploration/development decisions. For
__________________ example, if the engineers say that a field of so many million
barrels is going to be needed to justify development and
__________________
production costs, we can read off from the graph the chances of
__________________
our field containing that much oil or more; management can
__________________ then decide whether or not to take the gamble on developing
__________________ the field at those odds. So this type of graph has now become
__________________ one of the standard key tools in exploration/development
decision.
__________________
__________________
__________________
The above two figures represent the output from a Monte Carlo
simulation with the percentages plotted cumulatively. By plotting
the answers from the 100 per cent probability downwards, the
curve represents the chance (probability) that the reserves are a
certain size or greater. In the lower plot, the same values are
discounted by a 50 per cent risk factor, to give the chance of
discovering certain reserves or more including the 50 per cent
chance that we may find nothing at all.
Undiscovered Reserves: It assumes that we have already

discovered oil; it doesn't take into account the fact that our
exploration well may, for geological reasons, turn out to be dry
totally - lacking in hydrocarbons. When we are looking at
exploration of the unknown, as opposed to assessing what we
already know to be there, we have to go a stage further.
We have to give not only our best estimate of how much

petroleum there might be, but also the chance of there not being
any oil at all! This chance (probability) is known as the risk factor:
it is an expression, in numbers, of our confidence that there will
be at least some oil. The risk factor, combined with the estimate
of how much, now gives a more complete picture of the viability
of an undrilled prospect - at least until we start also considering
the costs and economics.
When it comes down to risk, there really is no such thing as the

risk factor. It cannot be worked out completely objectively;
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
different geologists will arrive at different figures for the Notes
probability of success. It is this sort of thing that helps to make __________________
the oil exploration business so competitive. __________________
__________________
Risked reserves, the expected reserve estimates from our Monte
Carlo simulation multiplied (discounted) by the risk factor (See __________________
Figure). This combines in a single estimate, the two elements of __________________
size and chance of success, and as such can be very useful in __________________
planning an exploration program. Should we, for example, go
__________________
for a large but very risky prospect, or would our money be better
__________________
spent on drilling a smaller but safer one? The risked reserves,
however, is a hypothetical figure __________________
__________________
Undiscovered are thus what we hope to find in a prospect
area or sedimentary basin in the future. This figure is extremely
imprecise and may be not much more than a guess; we can,
however, qualify it by a statistical probability. Adding this to the
original reserves will give us what is sometimes called the
`ultimate reserves' a grand total for the basin.
Ultimate Reserves
So far we have been talking about a single oil accumulation or a
single prospect. How now do we estimate what still remains to
be discovered over a wider area or even an entire sedimentary
basin? There really is no objective way of doing it but
companies and governments still want to know.
Many `experts' have scratched their heads over the estimation

of undiscovered reserves, and a number of techniques have been
employed. Let us look at the more important ones.
1. The obvious thing to do is to add together the risked reserves

estimates of all the remaining prospects. Some of these will
be successful, but some will be dry; the built-in risk factor
takes care of this. However, we have to assume that today
we can identify and assess all of the prospects that ever
will be found in the basin; to believe that we can do this
would be the height of conceit.
2. We could adopt what is known as a `geochemical material

balance' approach. This starts with the volume of mature
source rock in the basin and then, knowing how rich it is,
the amount of oil generated, expelled, and made available
for entrapment (the `charge') can be calculated. There are
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes lots of uncertainties in this but the calculation would be

__________________ amenable to a Monte Carlo type of simulation. If we have
__________________ a reasonable amount of information and control, this
technique may bring us into the right ball-park; otherwise
__________________
we may be doing little more than guessing.
__________________
__________________ 3. We might look at explored and known parts of the basin,
__________________
and calculate average quantities of oil per cubic mile of
sediment, or underlying each square mile of surface area;
__________________
then use these figures for the unexplored parts of the basin.
__________________
__________________ 4. We could make comparisons between known and unknown
basins, and use the figures for the known as also for the
__________________
unknown ones.
5. Use past statistics (number of barrels of oil found on average

for each 100m of exploration drilling?) and extrapolate to
future drilling. In a similar vein the amount of oil found
world-wide each year from the beginning of the century
can be plotted; it is a pretty wild sort of plot. However, if
we draw a smooth line through it to even out the peaks
and the troughs, then the area under it represents the total
volume of oil found to date. Extrapolate this smoothing line
out into the future, and the area under that bit will represent
what, on average, remains to be found. This kind of plot
can be used also for individual basins or for the whole world.
6. If all else fails, get a number of experts to make their

forecasts by whatever technique they prefer and, for our
`best estimate', merely use the average of the figures they
produce. Forcing these experts to agree on a figure amongst
them might refine the approach. This is known as the
Delphi technique. Delphi was the place in ancient Greece
where one went to consult the oracle about one's future;
we are said to be consulting the oracles!
All of the above techniques have been used, sometimes in

combination, and some may be more appropriate in given
circumstances than the others.
Summary
We obtain various sorts of information from subsurface.
The data obtained is combined to make decisions about
whether to explore or not.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
UNIT 9 Exploration and Production Activities in India 75
Notes
Unit 9 __________________
__________________
Exploration and Production __________________
Activities in India __________________

__________________
__________________
Objectives __________________
After reading this unit you will be able to: __________________
Understand the objectives and key developments for the __________________
Hydrocarbon sector and New Exploration Licensing Policy.
__________________
Introduction
Energy is a necessary requirement for economic development
and an vital pre-requisite to improve quality of life. Within
commercial energy, oil and gas have been playing an
progressively more important role in developing economies
throughout the world and India is no exception. In the last 50
years, the oil and gas sector has taken colossal strides to meet
the growing energy needs of the Indian economy. India is the
sixth largest consumer of primary energy in the world. The
country's primary energy consumption has grown at a
Compounded Annual Growth Rate (CAGR) of 4.15 per cent
during the period 1992-2002 against world's primary
consumption growth of 1.38 per cent CAGR over the same
period.
Hydroelectric Nuclear Coal Natural Gas Oil

Hydroelectric
5%
Nuclear Oil
1% 30%
Coal 55% Natural Gas

3%
Source: BP Statistical Review of World Energy (June 2003)

The fuel-wise breakup of primary energy consumption trend in
India for 2002
Note: Figures are approximated
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Of the total primary energy consumption in the country, oil

__________________ accounts for 30.05 per cent, second only to coal which accounts
__________________ for 55.6 per cent. India has built up a large petroleum industrial
__________________ network encompassing every facet of the oil and gas business
__________________
including exploration, production, refining, transportation and
marketing. In order to meet the long term needs of the country
__________________
and address issues such as energy security for strategic and
__________________
defence purposes, it is imperative to have a long term policy for
__________________ the hydrocarbon sector. This would not only make the sector
__________________ globally competitive but will also ensure development of free
__________________ market in the hydrocarbon sector. In 2000, the Government of
__________________ India (GoI) came out with a policy document titled 'India
Hydrocarbon Vision 2025' (HV2025), which laid down the
framework for policy formulation in the hydrocarbon sector over
the next 25 years.
Objectives for the hydrocarbon sector

To assure energy security by achieving self-reliance through
increased indigenous production and investment in equity
oil abroad.
To enhance quality of life by progressively improving

product standards and ensuring a cleaner and greener
India.
To develop the hydrocarbon sector as a globally competitive

industry that could be benchmarked against the best in the
world through technology upgradation and capacity
building.
To have a free market and promote healthy competition

among players and improve customer service.
To ensure oil security for the country keeping in view

strategic and defence considerations.
The radical restructuring of Indian economy since 1991 has

opened it up to the private sector. Recent initiatives in oil and
gas exploration, natural gas market development, marketing of
petroleum products and infrastructure have resulted in
enormous opportunities for private enterprise in these high
growth areas.
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
Key Developments Notes
__________________
The Indian oil and gas sector has witnessed several key __________________
developments over the past few years. These are:
__________________
i. Acceleration of exploration efforts especially in deep __________________

offshore areas as also in frontier areas; __________________
__________________
ii. Acquisition of acreage in other countries;
__________________
iii. Improvement in reservoir management and increasing __________________
recovery rates for all major fields by at least 5 per cent; __________________
iv. Formulation of an overseas oil and gas supply policy; __________________
v. Deregulation/rationalization of the Administered Pricing

Mechanism;
vi. Examining the possibility of importing natural gas at

competitive rates;
vii. Creation of adequate refining capacity;
viii. Augmentation and upgradation of marketing and

distribution facilities;
ix. Improvement of product quality;
x. Removal of existing administrative bottlenecks;
xi. Setting up of a regulatory mechanism for both upstream

and downstream sectors;
xii. Setting up of strategic tankages to ensure supply of crude

and petroleum products.
Industry Structure
In terms of segments, oil and gas sector can be divided into three
main categories: upstream, midstream and downstream. While
the segments are still dominated by National Oil Companies
(NOCs), private players are gaining presence. Globally, oil majors
are highly integrated companies having a presence in each
segment of the value chain from exploration and production
(E&P) to retailing and downstream petrochemicals. In contrast,
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Indian companies are operating only in specific segments and

__________________ lack integration.
__________________
__________________ Upstream
__________________
In the 1860s, sub-surface oil exploration activities started in the
__________________
dense jungles of Assam in north-east India and, in March 1867,
__________________
oil was struck in the well drilled near Makum. This was the first
__________________
successful mechanically drilled well in Asia. The first commercial
__________________ discovery of crude in the country was, however, made in 1889
__________________ at Digboi when a group of gallant oilmen erected a 20-metre
__________________ high thatch-covered wooden structure at the head of the
Brahmaputra valley, in the extreme corner of north eastern India.
This modest structure or 'derrick' had little geometric or aesthetic
appeal. Nevertheless, it marked the remarkable saga of the quest
for fugitive fuel - petroleum - on Indian shores. During the pre-
independence period, the Assam Oil Company in the north
eastern and Attock Oil Company in the north western part of
undivided India were the only oil companies producing oil in
the country, with minimal exploration input. The major part of
Indian sedimentary basins was deemed to be unfit for
development of oil and gas resources. After Independence, the
national government realised the importance of oil and gas for
rapid industrial development and its strategic role in defence.
Consequently, while framing the Industrial Policy Statement of

1948, the development of petroleum industry in the country was
considered to be of utmost necessity. Until 1955, private oil
companies mainly carried out exploration of hydrocarbon
resources of India. In Assam, the Assam Oil Company was
producing oil at Digboi and Oil India Ltd. (an equal stake joint
venture between the GoI and Burmah Oil Company) was
engaged in developing two newly-discovered large fields,
Naharkatiya and Moran, in Assam. In West Bengal, the Indo-
Stanvac Petroleum project (a joint venture between the GoI and
Standard Vacuum Oil Company of the US) was engaged in
exploration work. The vast sedimentary tracts in other parts of
India and adjoining offshore remained largely unexplored. In
1955, GoI decided to develop the oil and natural gas resources
in various regions of the country as part of the public sector.
With this objective, an Oil and Natural Gas Directorate was set
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
up towards the end of 1955, as a subordinate office under the Notes
then Ministry of Natural Resources and Scientific Research. The __________________
department was constituted with a nucleus of geoscientists from __________________
the Geological Survey of India. A delegation under the leadership __________________
of K D Malviya, the then minister of natural resources, visited __________________
several European countries to study the status of oil industry in
__________________
those countries and facilitate training of Indian professionals to
__________________
explore the potential oil and gas reserves.
__________________
Foreign experts from the US, West Germany, Romania and __________________
erstwhile USSR visited India and helped the government with __________________
their expertise. Finally, the visiting Soviet experts drew up a __________________
detailed plan for geological and geophysical surveys and drilling
operations to be carried out in the second Five Year Plan (1956-
57 to 1960-61). In April 1956, the GoI adopted the Industrial
Policy Resolution, which placed mineral oil industry among the
schedule A industries, the future development of which was to
be the sole and exclusive responsibility of the state. Soon, after
the formation of the Oil and Natural Gas Directorate, it became
apparent that it would not be possible for the directorate, with
its limited financial and administrative powers as subordinate
office of the government, to function efficiently. So in August
1956, the directorate was raised to the status of a Commission
with enhanced powers although it continued to be under the
government. In October 1959, the Commission was converted
into a statutory body by an Act of Parliament, which further
enhanced powers of the commission. The main functions of the
Oil and Natural Gas Commission, subject to the provisions of
the Act, were 'to plan, promote, organise and implement
programmes for development of petroleum resources and the
production and sale of petroleum and petroleum products
produced by it, and to perform such other functions as the
Central Government may, from time to time, assign to it'.
The Act further outlined the activities and steps to be taken by

ONGC in fulfilling its mandate. Also in February 1959, Oil India
Private Ltd. was incorporated for the purpose of development
and production of discovered prospects of Naharkatiya and
Moran and to increase the pace of exploration in the Northeast
India. It was registered as a rupee company with two-thirds of
the equity owned by Assam Oil Company (AOC) /Burmah Oil
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes Company (BOC) and one-third by the GoI. Under a subsequent

__________________ agreement on July 27, 1961, GoI and BOC transformed OIL to a
__________________ joint venture company (JVC) with equal partnership. OIL
__________________ remained a joint venture company for over two decades. In
__________________
October 1981, OIL became a wholly-owned Government of India
enterprise by taking over BOC's 50 per cent equity. The
__________________
management of Digboi oil-fields changed hands from the
__________________
erstwhile AOC to OIL. During this period, 1001 wells were
__________________ drilled in the Digboi oil field in an area of only 13 square km
__________________ with peak production achievement of 900 kilo litres per day
__________________ (KLPD).
__________________
India currently meets 70 per cent of its crude demand through
imports. The country's crude import bill has increased from Rs
400 billion in 1999-2000 to Rs 842.36 billion in 2003-04. The
ever rising import bill has led to an increased emphasis on
indigenous production of crude and, thus, increasing focus on
exploration activities in India. The exploration policy as defined
under HV2025 laid down the following objectives.
a. To undertake a total appraisal of Indian sedimentary basins

to tap the hydrocarbon potential, and to optimize
production of crude and natural gas in the most efficient
manner so as to have a reserve replacement ratio of more
than one.
b. To keep pace with technological advancement and

application and be at the technological forefront in the
global E&P industry.
c. To achieve zero impact, as nearly as possible, on

environment.
The oil and gas sector has seen a lot of developments to achieve
the objectives outlined in HV2025. Considering the increasing
emphasis on exploration and production activities and improving
the investment climate by offering attractive terms offered under
the New Exploration Licensing Policy (NELP), the opportunities
in Indian upstream sector are immense.
Sedimentary Basins
The sedimentary basins of India, onland and offshore up to the
200m isobath, have an areal extent of about 1.79 million square
km, which goes up to 3.14 million square km after including
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
deepwater areas. So far, 26 basins have been recognised and Notes
they have been divided into four categories based on their degree __________________
of prospectivity as presently known. Out of 26 sedimentary __________________
basins in the country, production has so far been undertaken in __________________
only seven basins and almost two-thirds of the total sedimentary __________________
area remains unexplored/poorly explored. Out of a
__________________
hydrocarbon resource base of around 32 billion tonnes (235 billion
__________________
barrels), in place reserves account for 7.36 billion tones (54 billion
barrels). The E&P policy entails carrying out extensive and __________________
intensive exploration to achieve a reserve replacement ratio of __________________

more than one, while achieving a zero impact on the __________________
environment. One of the major milestones in exploration is __________________
opening up of vast areas in unexplored, frontier basins and
deepwater offshore areas by GoI. The NELP has provided
internationally competitive terms keeping in view the relative
prospectivity perceptions of Indian basins along with expeditious
and time-bound finalisation of contracts.
Reserves
Reserves are broadly classified into three categories:
Prognosticated reserves: These are subjective estimates of

the reserves contained in the basins.
Geological in-place reserves or discovered reserves: These

are reserves that have been discovered and estimated using the
known parameters about the reservoir.
Recoverable reserves or ultimate reserves: These are in-

place reserves that can be recovered using existing technology
and are economical to produce under current prices. Initial in-
place reserves of oil plus oil equivalent (O+OEG) stand at 7886.48
MMT while the recoverable reserves are 2942.81 MMT as on
April 1, 2004.
Pre-NELP Exploration and Production Activities

The post-Independence E&P sector in India was largely
dominated by two NOCs - ONGC and OIL - with sporadic
attempts of unsuccessful multinational ventures till the early
1990s. Self-reliance and a do-it-yourself philosophy were the
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes main drivers of policy evolution and expansion of these two

__________________ NOCs. With liberalization process initiated in July 1991, the
__________________ upstream sector was opened up with yearly exploration bidding
__________________ rounds and offers of a few small and medium size fields for
__________________
development by private companies and joint ventures. In 1992
and 1993, two rounds of bidding for small and medium size
__________________
fields were held.
__________________
__________________
New Exploration Licensing Policy
__________________
__________________ Over the last decade several initiatives have been taken by the
__________________ government to globalise the activities of domestic oil and gas
sector, basically to mobilise large amount of risk capital required
for the sector. The dismantling of the Administered Price
Mechanism (APM), deregulation of the oil sector and invitation
for private participation were some initiatives taken in the
implementation stage. The NELP, formulated by the government
in 1999, has brought in new investments in oil and gas
exploration activities besides contribution from the two national
oil companies. The salient features of NELP are:
Award of licences through international competitive

bidding
Fast track approval mechanism through the single-window

empowered committee of secretaries (ECS)
Up to 100 per cent foreign participation
No acreages on nomination basis
NOCs to compete in the bidding rounds
An internationally competitive fiscal regime
Model production sharing contract (MPSC) & petroleum

tax guide in place
Exploration investment of Rs 200 billion in three phases of

90 NELP blocks - which is expected to go up substantially
with discoveries. 90 contracts signed under NELP in the
last four years, as against 22 contracts in the 10 years
preceding NELP
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
The fiscal regime under NELP offers: Notes
__________________
Participation through unincorporated JVs. No Oil Industry __________________
Development (OID) cess or customs duty __________________
__________________
No signature, discovery or production bonus
__________________
Seven-year corporate tax holiday __________________

__________________
Up to 100 per cent cost recovery (biddable) __________________
__________________
Low to moderate royalty rates between 5 per cent to 12.5
__________________
per cent
Special concessions for deepwater blocks
Securitisation of participating interest to raise project

finance permitted
Contract assures fiscal stability
Full repatriation of profits abroad
Liberal set-off of losses and carry-forward provisions for

income tax purposes
Tax incentives for site restoration fund scheme (SRFS)
The status of exploration rounds pre-NELP

and under NELP
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
n ~;
k ; k k f D r o
k~ e
Notes
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
The new significant discoveries made in the

past four years
Lack of significant finds since the Bombay High field in the mid-
seventies has resulted in depletion of country's oil and gas
reserves during the last decade. The proven and indicated
reserves of oil and gas were estimated at 773 MMT and 854
BCM respectively as on January 1, 2003. The life of oil reserves,
in terms of the Reserves to Production ratio, has declined from a
high of 45 years in 1981 to 19.4 years by the end of 2002-3
Likewise, gas reserves are estimated to last for another 27 years
only. However, the recent discoveries made by private/JV
producers in the blocks, awarded in pre-NELP bidding rounds
and under NELP I and II, augur well for the country's energy
scenario. For instance, Cairn Energy has made five oil and gas
discoveries, four in the Cambay offshore block and one in the
Krishna-Godavari deepwater offshore block. Reliance, in a joint
venture with Niko, has struck gas in the KG basin, the reserves
of which are expected to be as high as 14 TCF. This discovery is
expected to play a significant role in bridging the demand supply
gap for natural gas. Cairn has also made six discoveries in
Rajasthan block in the Barmer-Sanchore area. Similarly, Niko
has made another gas discovery on land near Surat in Gujarat
in a block awarded under NELP-II. ONGC has also discovered
oil and gas in Vasai and the KG basin. It would be appropriate
to mention that very few of these discoveries have been
OLEUM &
E TR EN
FP
ER
YO
GY
u
UNIV ER SIT
ST U DI ES
fo
n ~;
k ; k k f D r o
k~ e
'appraised' and, therefore, most of these have not been declared Notes
as 'commercial' discoveries. A clear scenario will emerge in the __________________
next two to three years when large acreage of the awarded NELP __________________
blocks will appraised. The fourth round of bidding under NELP __________________
also been successfully completed and 21 of 24 blocks offered __________________
have been awarded and 20 Production Sharing Contracts (PSC)
__________________
have been signed.
__________________
__________________
Key Issues in Exploration and production
__________________
The E&P exercise is characterized by a high degree of uncertainty __________________
and risk. There is a probability of 35% (at the development stage) __________________
to 80% (at exploratory drilling stage) that project may have to
be abandoned. This is followed by a risk that the money invested
($0.4 m survey stage to $48.4 m at development stage) till
abandoning stage would have to be treated as sunk cost.
Compared to 1980s, oil and gas production, in recent years, has
been much higher. In FY81, the total crude oil produced was
10.5 mmt. This was mainly due new discovery of offshore oilfields
of ONGC in mid- 1970s and subsequent developments. However,
in absence of any new discovery, oil production stagnated at
the mid-1980s levels. For FY03, the target for crude oil production
has been set at 33.3 mmt. The past few years witnessed a
significant depletion of crude oil reserves. The life of oil reserves
(as measured by Reserve to Production, or the R/P ratio) has
declined to 18 years in 2002 from a high of 45 years in FY81.
Summary
The Indian Petroleum industry is one of the oldest in the
world, with oil being struck at Makum near Margherita in
Assam in 1867, nine years after Col. Drake's discovery in
Titusville. The industry has come a long way since then.
The sector in recent years has been characterized by rising
consumption of oil products, declining crude production
and low reserve accretion. India remains one of the least-
explored countries in the world, with a well density among
the lowest in the world. With demand for 100 million tonne,
India is the fourth largest oil consumption zone in Asia,
even though on a per capita basis the consumption is a
mere 0.1 tonne, the lowest in the region- This makes the
prospects of the Indian Oil industry even more exciting.

Mdso-802-Petroleum Exploration PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mdso-802-Petroleum Exploration PDF

Uploaded by

Copyright:

Available Formats

Course Code: MDSO-802

Course Name: Petroleum Exploration

Unit 1 Introduction .......................................................................................................... 1

Unit 2 Basic Geology ..................................................................................................... 13

Unit 3 Oil Formation ..................................................................................................... 21

Unit 4 Migration of Petroleum and Geological Structures for Petroleum

Unit 5 Exploration Methods ......................................................................................... 39

Unit 6 Well Drilling and Logging ................................................................................ 49

Unit 7 Reservoir Geology .............................................................................................. 59

Unit 8 Prospect Identification and Quantitative Assessment ................................. 65

Unit 9 Exploration and Production Activities in India ............................................ 75

Petroleum comes from the Latin petra meaning rock or stone,

Petroleum occurs in the earth in combination of any of the four

Types of Petroleum: There are three general types of

2. Natural gas, and

3. Semi-solid and Solid forms.

1. Crude oil refers to liquid petroleum as opposed to refined

Notes amounts of dissolved gases, bitumens, and other impurities.

Thick crude oil. Lighter crude oil

Very light crude oil. Petroleum in solid state at

2. Natural gas is petroleum gas as distinguished from

3. Semi, and solid forms are called heavy hydrocarbons

Methane CH4 Ethane C2H6

Butane C4H10 Benzene C6H6

Crude oil belonging to the methane series is also referred to as

Another type of crude oil is that belonging to the naphthalene

Notes hydrocarbons can contain long, branched chains with complex

1. Petroleum gas: formed as a natural by-product during

2. Coal gas: formed by the modification of coal through the

3. Bacterial gas: forms during the low temperature

Bacterial gas has no direct correlation with petroleum; a type of

Petroleum, a mixture of carbon, hydrogen and oxygen, is rarely

Nitrogen (N) is another major impurity in petroleum, though it

Another major impurity found in petroleum is heavy metals.

Notes Nickel, the second heavy metal impurity, is generally associated

gravity 0.876 0.860 0.845 0.570

bbl per long ton 7.31 7.45 7.58 12

As the API values increase (top row), specific gravity decreases,

An API value greater than 30 means oils are considered light,

Viscosity is defined as the internal friction of a liquid causing its

Industry classification of crude:

The oil industry classifies "crude" by the location of its origin

The world reference barrels are:

Brent Blend, comprising 15 oils from fields in the Brent

West Texas Intermediate (WTI) for North American oil.

Dubai used as benchmark for the Asia-Pacific region for

Tapis (from Malaysia, used as a reference for light Far East

Minas (from Indonesia, used as a reference for heavy Far

The OPEC Basket consisting of

Notes Bonny Light Nigeria

Bulk Petroleum Products

Liquified petroleum gas (L.P.G.)

Motor spirit (M.S.)

Aviation turbine fuel (A.T.F.)

High speed diesel oil (H.S.D)

Light diesel oil (L.D.O.)

Furnace oil (F.O.)

LPG is also a good feedstock for the manufacture of various

Steam cracking of Naphtha produces a large variety of olefins

Notes Kerosene can be processed for the manufacture of Linear Alkyl

This is an important petroleum product used for automotive

LDO (Light Diesel Oil)

This is used in a variety of industrial applications as fuel in