Pipeline diplomacy petroleum
The Baku-Tbilisi-Ceyhan pipeline was built to transport crude oil and the Baku-Tbilisi-Erzurum pipeline (South Caucasus Pipeline) was built to transport natural gas from the western side of the Caspian Sea to the Mediterranean Sea bypassing Russian pipelines and thus Russian control. Following the construction of the pipelines the United States and the European Union proposed extending them by means of the proposed Trans-Caspian Oil Pipeline and the Trans-Caspian Gas Pipeline under the Caspian Sea to oil and gas fields on the eastern side of the Caspian Sea in Turkmenistan and Kazakhstan. In 2007, Russia signed agreements with Turkmenistan and Kazakhstan to connect their oil and gas fields to the Russian pipeline system effectively killing the undersea route.
China has completed the Kazakhstan-China oil pipeline from the Kazakhstan oil fields to the Chinese Alashankou-Dushanzi Crude Oil Pipeline in China. China is also working on the Kazakhstan-China gas pipeline from the Kazakhstan gas fields to the Chinese West-East Gas Pipeline in China.
Prices of oil
economist of the International Energy Agency expressed his opinion in October 2007 that oil prices will remain high for the foreseeable future. Birol says this is due to rapid increases in demand from the rapidly growing economies of India and China.[16] The ministers of OPEC, meeting in early December 2007, appeared to reach a consensus for high, but stable prices. This price point would deliver consistently high income to the oil producing states, but avoid prices so high that they would depress the economies of the oil consuming nations. A range of 70-80 dollars a barrel was suggested by some analysts to be OPEC’s goal.[17] Major oil exporting countries are rapidly developing and are using more oil domestically. Particularly significant are Indonesia, which no longer exports oil, Mexico and Iran, where projected demand will exceed production in about 5 years, and Russia, which is growing rapidly.[18]
Alternative methods petroleum extraction
Alternative methods
During the oil price increases of 2004-2008, alternatives methods of producing oil gained importance. The most widely known alternatives involve extracting oil from sources such as oil shale or tar sands. These resources exist in large quantities; however, extracting the oil at low cost without excessively harming the environment remains a challenge.
It is also possible to chemically transform methane or coal into the various hydrocarbons found in oil. The best-known such method is the Fischer-Tropsch process. It was a concept pioneered in Nazi Germany when imports of petroleum were restricted due to war and Germany found a method to extract oil from coal. It was known as Ersatz (English:”substitute”) oil, and accounted for nearly half the total oil used in WWII by Germany. However, the process was used only as a last resort as naturally occurring oil was much cheaper. As crude oil prices increase, the cost of coal to oil conversion becomes comparatively cheaper. The method involves converting high ash coal into synthetic oil in a multi-stage process. Ideally, a ton of coal produces nearly 200 liters (1.25 bbl, 52 US gallons) of crude, with by-products including tar.[citation needed]
Currently, two companies have commercialised their Fischer-Tropsch technology. Shell in Bintulu, Malaysia, uses natural gas as a feedstock, and produces primarily low-sulfur diesel fuels. [8] Sasol [9] in South Africa uses coal as a feedstock, and produces a variety of synthetic petroleum products.
The process is today used in South Africa to produce most of the country’s diesel fuel from coal by the company Sasol. The process was used in South Africa to meet its energy needs during its isolation under Apartheid. This process produces low sulfur diesel fuel ; it also is an increased threat to environment, as it produces large amounts of greenhouse gases.
An alternative method of converting coal into petroleum is the Karrick process, which was pioneered in the 1930s in the United States. It uses high temperatures in the absence of ambient air, to distill the short-chain hydrocarbons of petroleum out of coal.
More recently explored is thermal depolymerization (TDP), a process for the reduction of complex organic materials into light crude oil. Using pressure and heat, long chain polymers of hydrogen, oxygen, and carbon decompose into short-chain petroleum hydrocarbons. This mimics the natural geological processes thought to be involved in the production of fossil fuels. In theory, TDP can convert any organic waste into petroleum.
Biogenic theory
Most geologists view crude oil and natural gas as the product of compression and heating of ancient organic materials over geological time. Oil is formed from the preserved remains of prehistoric zooplankton and algae which have been settled to the sea (or lake) bottom in large quantities under anoxic conditions. Terrestrial plants, on the other hand, tend to form coal. Over geological time this organic matter, mixed with mud, is buried under heavy layers of sediment. The resulting high levels of heat and pressure cause the organic matter to chemically change during diagenesis, first into a waxy material known as kerogen which is found in various oil shales around the world, and then with more heat into liquid and gaseous hydrocarbons in a process known as catagenesis.
Geologists often refer to an “oil window” which is the temperature range that oil forms in—below the minimum temperature oil remains trapped in the form of kerogen, and above the maximum temperature the oil is converted to natural gas through the process of thermal cracking. Though this happens at different depths in different locations around the world, a ‘typical’ depth for the oil window might be 4–6 km. Note that even if oil is formed at extreme depths, it may be trapped at much shallower depths, even if it is not formed there (the Athabasca Oil Sands is one example).
Hydrocarbon trap.
Hydrocarbon trap.
Because most hydrocarbons are lighter than rock or water, these often migrate upward through adjacent rock layers until they either reach the surface or become trapped beneath impermeable rocks, within porous rocks called reservoirs. However, the process is not straightforward since it is influenced by underground water flows, and oil may migrate hundreds of kilometres horizontally or even short distances downward before becoming trapped in a reservoir. Concentration of hydrocarbons in a trap forms an oil field, from which the liquid can be extracted by drilling and pumping.
Three conditions must be present for oil reservoirs to form: first, a source rock rich in organic material buried deep enough for subterranean heat to cook it into oil; second, a porous and permeable reservoir rock for it to accumulate in; and last a cap rock (seal) or other mechanism that prevents it from escaping to the surface. Within these reservoirs fluids will typically organize themselves like a three-layer cake with a layer of water below the oil layer and a layer of gas above it, although the different layers vary in size between reservoirs.
The vast majority of oil that has been produced by the earth has long ago escaped to the surface and been biodegraded by oil-eating bacteria. Oil companies are looking for the small fraction that has been trapped by this rare combination of circumstances. Oil sands are reservoirs of partially biodegraded oil still in the process of escaping, but contain so much migrating oil that, although most of it has escaped, vast amounts are still present – more than can be found in conventional oil reservoirs. On the other hand, oil shales are source rocks that have never been buried deep enough to convert their trapped kerogen into oil.
The reactions that produce oil and natural gas are often modeled as first order breakdown reactions, where kerogen is broken down to oil and natural gas by a set of parallel reactions, and oil eventually breaks down to natural gas by another set of reactions. The first set was originally patented in 1694 under British Crown Patent No. 330 covering,
“a way to extract and make great quantityes of pitch, tarr, and oyle out of a sort of stone.”
The latter set is regularly used in petrochemical plants and oil refineries.
Us petroleum holdings quimics
Petroleum is a mixture of a very large number of different hydrocarbons ; the most commonly found molecules are alkanes (linear or branched), cycloalkanes, aromatic hydrocarbons, or more complicated chemicals like asphaltenes. Each petroleum variety has a unique mix of molecules, which define its physical and chemical properties, like color and viscosity.
The alkanes, also known as paraffins, are saturated hydrocarbons with straight or branched chains which contain only carbon and hydrogen and have the general formula CnH2n+2 They generally have from 5 to 40 carbon atoms per molecule, although trace amounts of shorter or longer molecules may be present in the mixture.
The alkanes from pentane (C5H12) to octane (C8H18) are refined into gasoline (petrol), the ones from nonane (C9H20) to hexadecane (C16H34) into diesel fuel and jet fuel, and the ones from hexadecane upwards into fuel oil and lubricating oil. At the heavier end of the range, paraffin wax is an alkane with approximately 25 carbon atoms, while asphalt has 35 and up, although these are usually cracked by modern refineries into more valuable products. Any shorter hydrocarbons are considered natural gas or natural gas liquids.
The cycloalkanes, also known as napthenes, are saturated hydrocarbons which have one or more carbon rings to which hydrogen atoms are attached according to the formula CnH2n. Cycloalkanes have similar properties to alkanes but have higher boiling points.
The aromatic hydrocarbons are unsaturated hydrocarbons which have one or more planar six-carbon rings called benzene rings, to which hydrogen atoms are attached with the formula CnHn. They tend to burn with a sooty flame, and many have a sweet aroma. Some are carcinogenic.
These different molecules are separated by fractional distillation at an oil refinery to produce gasoline, jet fuel, kerosene, and other hydrocarbons. For example 2,2,4-trimethylpentane (isooctane), widely used in gasoline, has a chemical formula of C8H18 and it reacts with oxygen exothermically:[6]
Incomplete combustion of petroleum or gasoline results in production of potentially toxic byproducts. Too little oxygen results in carbon monoxide. Combustion in air (which contains mostly nitrogen) results in nitric oxides. For example:
US Petroleum Holdings: Business Model
Our Business Model & Strategy:
There is no doubt that the trend in the Oil and Natural Gas market is toward higher and higher prices. The contributing factors for this are many and extremely diverse, running from political uncertainty to increased global consumption. We believe, US Petroleum Holdings, as most analysts do, that this trend will continue throughout the decade and through the next. Suffice it to say that we are in the right business, which under current circumstances will remain resilient to many of the dangerous economic forces that may arise.
West Side Proyect, Holdings Petroleum
West Speaks Field – 2 well Re-Drill
History
Shallow production of oil was driving the exploration of the West Speaks Field in the early oil boom years. Many wells were drilled in the 1960’s and early 1970’s with oil production as the main objective, not gas. The wells were drilled and logged, showing that the intervals of our present day interest were “hydrocarbon bearing”, but the technology was not there to get it out of the ground. Adding to this problem was typically a lack of gas pipelines to take this gas production to market and the prices that were being paid for this production was far less than $.30 per Thousand Cubic Feet of Gas (MCFG). These factors killed the effort towards gas production and the exploration effort was usually short-lived. Due to increases in gas pricing over the last few years, many independent oil and gas companies have re-focused their efforts in these types of areas that were drilled during earlier times in search of oil reserves.
The West Speaks Field has been commercially productive from shallow Yegua, Frio and Miocene are oil bearing sands and the Upper Wilcox gas bearing sections, but no real commercial production existed with the deeper Middle and Lower Wilcox series until recently. This area of prolific Wilcox production has seen substantial development in the last few years with “Roeder” (Middle Wilcox) and “Migura” (Lower Wilcox) discoveries. These sections of the Middle to Lower Wilcox intervals have generated substantial commercial gas production from the field after new fracture stimulation technology was implemented during the completion operations. Larger independent companies such as El Paso Natural Gas and Dominion Exploration and Production are actively developing the Roeder & Migura Wilcox sections in the area with some new wells generating gas flows in excess of 5 Million Cubic Feet of Gas per Day.
We have identified many plugged well bores in the West Speaks Field that were drilled during the 1960’s and early 1970’s that were logged showing gas pay. Core samples were taken and determined to yield considerable hydrocarbons. Several of these wells had casing installed and were cemented. While a handful of wells were tested in the Roeder Wilcox series, they flowed a nominal amount of gas at a non-commercial rate. Many of the wells were deemed as dry holes and some of the wells were re-completed in the shallower zones. The idea of “re-entering” a plugged well bore is not new, however recent prices of oil and natural gas has brought old thinking back into the light. The wells of this program will be re-entered, in some instances deepened, and then the zones of our interest will be fracture stimulated with modern technology. This type of project is typically less expensive than drilling a new well and the geologics are heavily in favor as the site has been logged.
Henderson – Muniza #1 Re Entry Well Read more »
Holdings Petroleum from US
Second, the price increase in oil over the last ten years has allowed the industrial sector and the US government to push for domestic production of oil. While in the early 1990’s the price of oil was relatively low, therefore it was not cost effective to pursue domestic drilling programs. Today, with oil hitting lifetime highs resurgence in domestic drilling is taking place and creating a new frontier for those who are willing to make an investment, which has the potential to be extraordinarily lucrative.
Third, and finally RISK! In the post WWII era, drilling for oil as an independent or as a “wildcater” proved in many cases to be a boom-bust proposition. Now with market price and technology, as two driving forces, there is no reason not to be able to extract oil from a proven reserve well site. The big question is simply “how much oil” will be derived from a site. US Petroleum Holdings is not in the business of taking unnecessary risk. All the sites we are involved in have proven reserves – but that may not be enough. Consequently, we have implemented a risk management system through an advanced asset allocation program.
Generally, Risk Management is the process of measuring, or assessing risk and then developing strategies to manage the risk. In general, the strategies employed include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk.
US Petroleum Holdings: Business Model
Our Business Model & Strategy:
There is no doubt that the trend in the Oil and Natural Gas market is toward higher and higher prices. The contributing factors for this are many and extremely diverse, running from political uncertainty to increased global consumption. We believe, as most analysts do, that this trend will continue throughout the decade and through the next. Suffice it to say that we are in the right business, which under current circumstances will remain resilient to many of the dangerous economic forces that may arise.
West Side Proyect, Holdings Petroleum
West Speaks Field – 2 well Re-Drill
History
Shallow production of oil was driving the exploration of the West Speaks Field in the early oil boom years. Many wells were drilled in the 1960’s and early 1970’s with oil production as the main objective, not gas. The wells were drilled and logged, showing that the intervals of our present day interest were “hydrocarbon bearing”, but the technology was not there to get it out of the ground. Adding to this problem was typically a lack of gas pipelines to take this gas production to market and the prices that were being paid for this production was far less than $.30 per Thousand Cubic Feet of Gas (MCFG). These factors killed the effort towards gas production and the exploration effort was usually short-lived. Due to increases in gas pricing over the last few years, many independent oil and gas companies have re-focused their efforts in these types of areas that were drilled during earlier times in search of oil reserves.
The West Speaks Field has been commercially productive from shallow Yegua, Frio and Miocene are oil bearing sands and the Upper Wilcox gas bearing sections, but no real commercial production existed with the deeper Middle and Lower Wilcox series until recently. This area of prolific Wilcox production has seen substantial development in the last few years with “Roeder” (Middle Wilcox) and “Migura” (Lower Wilcox) discoveries. These sections of the Middle to Lower Wilcox intervals have generated substantial commercial gas production from the field after new fracture stimulation technology was implemented during the completion operations. Larger independent companies such as El Paso Natural Gas and Dominion Exploration and Production are actively developing the Roeder & Migura Wilcox sections in the area with some new wells generating gas flows in excess of 5 Million Cubic Feet of Gas per Day.
We have identified many plugged well bores in the West Speaks Field that were drilled during the 1960’s and early 1970’s that were logged showing gas pay. Core samples were taken and determined to yield considerable hydrocarbons. Several of these wells had casing installed and were cemented. While a handful of wells were tested in the Roeder Wilcox series, they flowed a nominal amount of gas at a non-commercial rate. Many of the wells were deemed as dry holes and some of the wells were re-completed in the shallower zones. The idea of “re-entering” a plugged well bore is not new, however recent prices of oil and natural gas has brought old thinking back into the light. The wells of this program will be re-entered, in some instances deepened, and then the zones of our interest will be fracture stimulated with modern technology. This type of project is typically less expensive than drilling a new well and the geologics are heavily in favor as the site has been logged.
Henderson – Muniza #1 Re Entry Well Read more »
