Hydrocarbons - crude oil and natural gas - are found in certain
layers of rock that are usually buried deep beneath the surface
of the earth. In order for a rock layer to qualify as a good source
of hydrocarbons, it must meet several criteria.
For one thing, good reservoir
rocks (a reservoir is a formation that contains hydrocarbons)
have porosity. Porosity is a measure of the openings in
a rock, openings in which petroleum can exist. Even though
a reservoir rock looks solid to the naked eye, a microscopic
examination reveals the existence of tiny openings in the
rock. These openings are called pores. Thus a rock with
pores is said to be porous and is said to have porosity
Figure 1 :porosity
Figure 2: Permeability
Another characteristic of reservoir rock
is that it must be permeable. That is, the pores of the
rock must be connected together so that hydrocarbons can
move from one pore to another (Figure 2). Unless hydrocarbons
can move and flow from pore to pore, the hydrocarbons remain
locked in place and cannot flow into a well. In addition
to porosity and permeability reservoir rocks must also exist
in a very special way. To understand how, it is necessary
to cross the time barrier and take an imaginary trip back
into the very ancient past.
Imagine standing on the shore of an ancient sea, millions of
years ago. A small distance from the shore, perhaps a dinosaur
crashes through a jungle of leafy tree ferns, while in the air,
flying reptiles dive and soar after giant dragonflies. In contrast
to the hustle and bustle on land and in the air, the surface of
the sea appears very quiet. Yet, the quiet surface condition is
deceptive. A look below the surface reveals that life and death
occur constantly in the blue depths of the sea. Countless millions
of tiny microscopic organisms eat, are eaten and die. As they
die, their small remains fall as a constant rain of organic matter
that accumulates in enormous quantities on the sea floor. There,
the remains are mixed in with the ooze and sand that form the
As the countless millennia march inexorably by, layer upon layer
of sediments build up. Those buried the deepest undergo a transition;
they are transformed into rock. Also, another transition occurs:
changed by heat, by the tremendous weight and pressure of the
overlying sediments, and by forces that even today are not fully
understood, the organic material in the rock becomes petroleum.
But the story is not over.
For, while petroleum was being formed, cataclysmic events were
occurring elsewhere. Great earthquakes opened huge cracks, or
faults, in the earth’s crust. Layers of rock were folded
upward and downward. Molten rock thrust its way upward, displacing
surrounding solid beds into a variety of shapes. Vast blocks of
earth were shoved upward, dropped downward or moved laterally.
Some formations were exposed to wind and water erosion and then
once again buried. Gulfs and inlets were surrounded by land, and
the resulting inland seas were left to evaporate in the relentless
sun. Earth’s very shape had been changed.
Meanwhile, the newly born hydrocarbons lay cradled in their source
rocks. But as the great weight of the overlying rocks and sediments
pushed downward, the petroleum was forced out of its birthplace.
It began to migrate. Seeping through cracks and fissures, oozing
through minute connections between the rock grains, petroleum
began a journey upward. Indeed, some of it eventually reached
the surface where it collected in large pools of tar, there to
lie in wait for unsuspecting beasts to stumble into its sticky
trap. However, some petroleum did not reach the surface. Instead,
its upward migration was stopped by an impervious or impermeable
layer of rock. It lay trapped far beneath the surface. It is this
petroleum that today’s oilmen seek.
Geologists have classified petroleum traps into two basic types:
structural traps and stratigraphic traps. Structural traps are
traps that are formed because of a deformation in the rock layer
that contains the hydrocarbons. Two common examples of structural
traps are fault traps and anticlines.
An anticline is
an upward fold in the layers of rock, much like an arch
in a building. Petroleum migrates into the highest part
of the fold, and its escape is prevented by an overlying
bed of impermeable rock (A).
A fault trap occurs when the formations on either side of
the fault have been moved into a position that prevents
further migration of petroleum. For example, an impermeable
formation on one side of the fault may have moved opposite
the petroleum-bearing formation on the other side of the
fault. Further migration of petroleum is prevented by the
impermeable layer (B).
Stratigraphic traps are traps that result
when the reservoir bed is sealed by other beds or by a change
in porosity or permeability within the reservoir bed itself.
There are many different kinds of stratigraphic traps. In
one type, a tilted or inclined layer of petroleum-bearing
rock is cutoff or truncated by an essentially horizontal,
impermeable rock layer (C).
Figure 3:Traps and Anticlines
Or sometimes a petroleum-bearing formation pinches out; that
is, the formation is gradually cut off by an overlying layer.
Another stratigraphic trap occurs when a porous and permeable
reservoir bed is surrounded by impermeable rock. Still another
type occurs when there is a change in porosity and permeability
in the reservoir itself. The upper reaches of the reservoir may
be impermeable and nonporous, while the lower part is permeable
and porous and contains hydrocarbons.
Once a likely area has been selected, the right to drill must
be secured before drilling can begin. Securing the right to drill
usually involves leasing the mineral rights of the desired property
from the owner. The owner may be the owner of all interest in
the land, or just the mineral rights. As payment for the right
to drill for and extract the oil and gas, the owner will usually
be paid a sum call a "lease bonus" or a "hole bonus"
for every well drilled on the leased land. He will also retain
a royalty on the production, if any, of the leased property. The
royalty is the right to receive a certain portion of the production
of property, without sharing in the costs incurred in producing
the oil, such as drilling, completion, equipping and operating
or production costs. The costs are borne by the holder of the
right to drill and extract the mineral, which right is usually
referred to as the working interest.
an area has been selected and the right to drill thereon
has been obtained, actual drilling may begin. The most common
method of drilling in use today is rotary drilling. Rotary
drilling operates on the principle of boring a hole by continuous
turning of a bit. The bit is the most important tool. The
rest of the rig ( a derrick and attendant machinery) is
designed to make it effective. While bits vary in design
and purpose, one common type consists of a housing and three
interlocking movable wheels with sharp teeth, looking something
like a cluster of gears. The bit, which is hollow and very
heavy, is attached to the drill stem, composed of hollow
lengths of pipe leading to the surface. As the hole gets
deeper, more lengths of pipe can be added at the top. Almost
as important as the bit is the drilling fluid. Although
known in the industry as mud, it is actually a prepared
chemical compound. The drilling mud is circulated continuously
down the drill pipe, through the bit, into the hole and
upwards between the hole and the pipe to a surface pit,
where it is purified and recycled. The flow of mud removes
the cuttings from the hole without removal of the bit, lubricates
and cools the bit in the hole, and prevents a blow out which
could result if the bit punctured a high pressure formation.
(See the drilling rig to the right.)
The cuttings, which are carried up by the drilling mud, are usually
continuously tested by the petroleum geologist in order to determine
the presence of oil.
To Total Depth
The final part of the hole is what the operating company
hopes will be the production hole. But before long, the
formation of interest (the pay zone, the oil sand, or the
formation that is supposed to contain hydrocarbons) is penetrated
by the hole. It is now time for a big decision. The question
is, "Does this well contain enough oil or gas to make
it worthwhile to run the final production string of casing
and complete the well?"
To help the operator make his decision, several techniques
have been developed. One thing that helps indicate whether
hydrocarbons have been trapped is a thorough examination
of the cuttings brought up by the bit. The mud logger or
geologist (Remember him? He's been there all along, monitoring
downhole conditions at the location.) catches cuttings at
the flow ditch and by using a microscope or ultraviolet
light can see whether oil is in the cuttings. Or he may
use a gas-detection instrument.
Another valuable technique is well logging. A logging company
is called to the well while the crew trips out all the drill string.
Using a portable laboratory, truck-mounted for land rigs, the
well loggers lower devices called logging tools into the well
on wireline. The tools are lowered all the way to bottom and then
reeled slowly back up. As the tools come back up the hole, they
are able to measure the properties of the formations they pass.
Electric logs measure and record natural and induced electricity
Some logs ping formations with sound and measure and record sound
reactions. Radioactivity logs measure and record the effects of
natural and induced radiation in the formations. These are only
a few of many types of logs available. Since all the logging tools
make a record, which resembles a graph or an electrocardiogram
(EKG), the records, or logs can be studied and interpreted by
an experienced geologist or engineer to indicate not only the
existence of oil or gas, but also how much may be there. Computers
have made the interpretation of logs much easier.
In addition to these tests, formation core samples are sometimes
taken. Two methods of obtaining cores are frequently used. In
one, an assembly called a "core barrel" is made up on
the drill string and run to the bottom of the hole.
As the core barrel is rotated, it cuts a cylindrical core a few
inches in diameter that is received in a tube above the core-cutting
bit. A complete round trip is required for each core taken. The
second is a sidewall sampler in which a small explosive charge
is fired to ram a small cylinder into the wall of the hole. When
the tool is pulled out of the hole, the small core samples come
out with the tool. Up to thirty of the small samples can be taken
at any desired depth. Either type of core can be examined in a
laboratory and may reveal much about the nature of the reservoir.
COMPLEATING THE WELL
After the operating company carefully considers all the data obtained
from the various tests it has ordered to be run on the formation
or formations of interest, a decision is made on whether to set
production casing and complete the well or plug and abandon it.
If the decision is to abandon it, the hole is considered to be
dry, that is, not capable of producing oil or gas in commercial
quantities. In other words, some oil or gas may be present but
not in amounts great enough to justify the expense of completing
the well. Therefore, several cement plugs will be set in the well
to seal it off more or less permanently. However, sometimes wells
that were plugged and abandoned as dry at one time in the past
may be reopened and produced if the price of oil or gas has become
more favorable. The cost of plugging and abandoning a well may
only be a few thousand dollars. Contrast that cost with the price
of setting a production string of casing - $50,000 or more. Therefore,
the operator’s decision is not always easy.
the operating company decides to set casing, casing will be brought
to the well and for one final time, the casing and cementing crew
run and cement a string of casing. Usually, the production casing
is set and cemented through the pay zone; that is, the hole is
drilled to a depth beyond the producing formation, and the casing
is set to a point near the bottom of the hole. As a result, the
casing and cement actually seal off the producing zone-but only
temporarily. After the production string is cemented, the drilling
contractor has almost finished his job except for a few final
the casing string is run, the next task is cementing the casing
in place. An oil-well cementing service company is usually called
in for this job although, as when casing is run, the rig crew
is available to lend assistance. Cementing service companies stock
various types of cement and have special transport equipment to
handle this material in bulk. Bulk-cement storage and handling
equipment is moved out to the rig, making it possible to mix large
quantities of cement at the site. The cementing crew mixes the
dry cement with water, using a device called a jet-mixing hopper.
The dry cement is gradually added to the hopper, and a jet of
water thoroughly mixes with the cement to make a slurry (very
thin water cement). After the casing string is run, the next task
is cementing the casing in place. An oil-well cementing service
company is usually called in for this job although, as when casing
is run, the rig crew is available to lend assistance.
companies stock various types of cement and have special
transport equipment to handle this material in bulk. Bulk-cement
storage and handling equipment is moved out to the rig,
making it possible to mix large quantities of cement at
the site. The cementing crew mixes the dry cement with water,
using a device called a jet-mixing hopper. The dry cement
is gradually added to the hopper, and a jet of water thoroughly
mixes with the cement to make a slurry (very thin water
Special pumps pick up the cement slurry and send it up to a valve
called a cementing head (also called a plug container) mounted
on the topmost joint of casing that is hanging in the mast or
derrick a little above the rig floor. Just before the cement slurry
arrives, a rubber plug (called the bottom plug) is released from
the cementing head and precedes the slurry down the inside of
The bottom plug stops or "seats"
in the float collar, but continued pressure from the cement
pumps open a passageway through the bottom plug. Thus, the
cement slurry passes through the bottom plug and continues
on down the casing. The slurry then flows out through the
opening in the guide shoe and starts up the annular space
between the outside of the casing and wall of the hole.
Pumping continues and the cement slurry fills the annular
A top plug, which is similar to the bottom plug except
that it is solid, is released as the last of the cement
slurry enters the casing. The top plug follows the remaining
slurry down the casing as a displacement fluid (usually
salt water or drilling mud) is pumped in behind the top
plug. Meanwhile, most of the cement slurry flows out of
the casing and into the annular space. By the time the top
plug seats on or "bumps" the bottom plug in the
float collar, which signals the cementing pump operator
to shut down the pumps, the cement is only in the casing
below the float collar and in the annular space. Most of
the casing is full of displacement fluid. After the cement
is run, a waiting time is allotted to allow the slurry to
harden. This period of time is referred to as waiting on
cement or simply WOC.
After the cement hardens, tests may be run to ensure a
good cement job, for cement is very important. Cement supports
the casing, so the cement should completely surround the
casing; this is where centralizers on the casing help. If
the casing is centered in the hole, a cement sheath should
completely envelop the casing.
Cement also seals off formations to prevent fluids from one formation
migrating up or down the hole and polluting the fluids in another.
For example, cement can protect a freshwater formation (that perhaps
a nearby town is using as its drinking water supply) from saltwater
contamination. Further, cement protects the casing from the corrosive
effects that formation fluids (as salt water) may have on it.
Since the pay zone is sealed off by the production string and
cement, perforations must be made in order for the oil or gas
to flow into the wellbore. Perforations are simply holes that
are made through the casing and cement and extend some distance
into the formation.The most common method of perforating incorporates
shaped-charge explosives (similar to those used in armor-piercing
Shaped charges accomplish penetration by creating a jet of high-pressure,
high-velocity gas. The charges are arranged in a tool called
a gun that is lowered into the well opposite the producing
zone. Usually the gun is lowered in on wireline (1). When
the gun is in position, the charges are fired by electronic
means from the surface (2). After the perforations are made,
the tool is retrieved (3). Perforating is usually performed
by a service company that specializes in this technique.
Sometimes, however, petroleum exists in a formation but
is unable to flow readily into the well because the formation
has very low permeability. If the formation is composed of rocks
that dissolve upon being contacted by acid, such as limestone
or dolomite, then a technique known as acidizing may be required.
Acidizing is usually performed by an acidizing
service company and may be done before the rig is moved
off the well; or it can also be done after the rig is moved
away. In any case, the acidizing operation basically consists
of pumping anywhere from fifty to thousands of gallons of
acid down the well. The acid travels down the tubing, enters
the perforations, and contacts the formation. Continued
pumping forces the acid into the formation where it etches
channels - channels that provide a way for the formation’s
oil or gas to enter the well through the perforations.
sandstone rocks contain oil or gas in commercial quantities
but the permeability is too low to permit good recovery,
a process called fracturing may be used to increase permeability
to a practical level. Basically, to fracture a formation,
a fracturing service company pumps a specially blended fluid
down the well and into the formation under great pressure.
Pumping continues until the formation literally cracks open.
Meanwhile, sand, walnut hulls, or aluminum pellets are mixed
into the fracturing fluid. These materials are called proppants.
The proppant enters the fractures in the formation, and,
when pumping is stopped and the pressure allowed to dissipate,
the proppant remains in the fractures. Since the fractures
try to close back together after the pressure on the well
is released, the proppant is needed to hold or prop the
fractures open. These propped-open fractures provide passages
for oil or gas to flow into the well. See figure to the
After the well has been perforated, acidized or fractured, the
well may not produce by natural flow. In such cases, artificial-lift
equipment is usually installed to supplement the formation pressure.
The artificial-lift method that involves surface pumps
is known as rod pumping or beam pumping. Surface equipment
used in this method imparts an up-and-down motion to a sucker-rod
string that is attached to a piston or plunger pump submerged
in the fluid of a well. Most rod-pumping units have the
same general operating principles.
In the ordinary producing operation
only a portion of the oil in place is recoverable by primary
production methods. Such methods include free-flowing wells
and production maintained by pumps. As oil is extracted
from a reservoir or sands the pressure which brings the
oil to the well is reduced. Secondary recovery methods are
intended to increase the recoverable percentage of the oil
in place by injecting a substance such as gas or water into
the producing formation. The injected substance is intended
to increase the pressure on the oil in the formation and
drive it toward the well-bore.
A well, called an injection well or water injection well, is
usually drilled in order to inject the substance. Sometimes a
previously drilled, abandoned well can be reworked as an injection
well. When water is used as the injectant it is often produced
on the property itself. Excess water produced by operating wells
may be diverted to the injection well and used as the injectant.
This method of water disposal usually alleviates the need for
a separate water disposal well. If the water from the producing
wells does not provide enough injectant to provide proper pressure
for secondary recovery, a water supply well may be required to
provide an adequate supply of water.
Once an accumulation of oil has been found
in a porous and permeable reservoir, a series of wells are
drilled in a predetermined pattern to effectively drain
this "oil pool". Wells may be drilled as close
as one to each 10 acres (660 ft. between wells) or as far
apart as one to each 640 acres (1 mile between wells) depending
on the type of reservoir and the depth to the "pay"
horizon. For economic reasons, spacing is usually determined
by the distance the reservoir energy will move commercial
quantities of oil to individual wells.The rate of production
is highest at the start when all of the energy from the
dissolved gas or water drive is still available. As this
energy is used up, production rates drop until it becomes
uneconomical to operate although significant amounts of
oil still remain in the reservoir. Experience has shown
that only about 12 to 15 percent of the oil in a reservoir
can be produced by the expansion of the dissolved gas or
is one of the most common and efficient secondary recovery processes.
Water is injected into the oil reservoir in certain wells in order
to renew a part of the original reservoir energy. As this water
is forced into the oil reservoir, it spreads out from the injection
wells and pushes some of the remaining oil toward the producing
wells. Eventually the water front will reach these producers and
increasingly larger quantities of water will be produced with
a corresponding decrease in the amount of oil. When it is no longer
economical to produce these high water-ratio wells, the flood
may be discontinued.As mentioned previously, average primary recoveries
may be only 15% of the oil in the reservoir.
waterfloods should recover an additional 15% to 20% of the
original oil in place. This leaves a substantial amount
of oil in the reservoir, but there are no other engineering
techniques in use now that can recover it economically.In
most cases, oil reservoirs suitable for secondary recovery
projects have been produced for several years. It takes
time to inject sufficient water to fill enough of the void
spaces to begin to move very much oil. It takes several
months from the start of a waterflood before significant
production increases take place and the flood will probably
have maximum recoveries during the second, third, fourth,
and fifth years after injection of water has commenced.
The average flood usually lasts 6 to 10 years.
all equipment is in place, the oil may begin to flow into the
holding tanks to await pick up. It can be expected that a well
will not be in production for certain times due to adverse weather
conditions, mechanical malfunctions and other unforeseen circumstances.
After the production period commences, it is necessary to incur
certain costs in order to bring the oil to the surface. These
costs include normal maintenance on the pump and other equipment,
replacement of any pipe or tanks as needed, compensation to the
operator of the pump, and payment of any incidental damages to
the owner of the surface rights of the leased property. In some
cases, the oil in a pay zone will be mixed with salt water. In
such cases, the oil must be separated from the salt water and
the salt water disposed of in a manner which is not harmful to
The water may be hauled away by tank truck but often this phenomenon
requires the drilling, nearby the oil producing well, of another
well into which the salt water will be pumped. The cost of this
water disposal well is normally considered to be a cost of operation.
Finally, there may be additional costs incurred in opening up
a new pay zone when any presently producing pay zone becomes economically
unfeasible. Because opening a new pay zone involves the installation
of very little, if any, new equipment, the costs involved therein
usually are not very substantial.
Sale of oil
the oil is out of the ground and into the holding tanks, it must
be sold. In most cases each holder of a working interest has the
right to take his portion of production in kind, therefore, make
his own arrangements for its sale. It is not uncommon, however,
for all the holders of a working interest of a well to enter into
the same arrangement with the same buyer of the oil production.
These sale contracts are normally entered
into for periods of not longer than a few months but in
no case longer than one year. The buyer of the oil will
generally be advised by the operator of the working interest
as to the identity and extent of ownership of each of the
holders of the working interest, as well as the identity
of the royalty holders and the amount of their interests.
The information will be compiled on division orders which
are the basis upon which the buyer of the oil can divide
the proceeds of sale among the various holders.
The buyer of the oil will pick up the oil from the holding tanks
at periodic intervals, gauge it and remit the remaining proceeds
in the proper amounts to the holders of the working interest and