US Petroleum Holdings, information about gas, oil and petroleum
The UK now exports quantities of crude oil and is acknowledged for expertise in the area of deep-water technology – using advanced engineering techniques for extracting a higher proportion of oil from each field. This technique was unknown twenty years ago. Consequently, UK specialists are in demand all over the world.
The UK Continental Shelf (UKCS) is facing significant challenges as the province matures. Recovering oil and gas from the North Sea and the Atlantic Margin (the area of water to the west of Shetland and the north of the Hebrides) is a highly technical, complex, dangerous and expensive job. As supplies from larger oil fields run out, smaller, more expensive fields are being exploited. UK oil companies have to be inventive and invest in safe and efficient techniques to remain competitive.
The UK still has substantial recoverable reserves of oil and gas, potentially exceeding the amount already produced. However, many existing, large producing fields are well into decline and discoveries are becoming fewer and smaller or have significant associated technical challenges.
Current trends
As the UK’s oil fields mature, the industry’s focus has shifted from searching for new oil discoveries to continuing the productivity of mature fields, as well as developing smaller fields that were not previously considered commercially viable. This trend has prompted major oil companies to begin selling some of their mature UKCS assets in favour of other regions of the world. Smaller, independent oil companies have been acquiring these UKCS assets.
Natural gas is the UK’s largest source of primary energy, supplying over 40% of the country’s total energy needs. It is used as both a domestic and industrial fuel. It generates electricity to provide heat and power for homes and industries, and is feedstock for chemicals, pharmaceuticals and other products.
The UK is currently the world’s fourth largest producer of natural gas and has more than 200 offshore fields in production around Great Britain. The greatest concentrations of gas are found in the southern sector of the North Sea, but significant volumes are also produced from the central and
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.
Uses of Gas Oil
Us Petroleum Holdings Oil has many uses; it heats homes and businesses and fuels trucks, ships and some cars. A small amount of electricity is produced by diesel, but it is more polluting and more expensive than natural gas. It is often used as a backup fuel for peaking power plants in case the supply of natural gas is interrupted or as the main fuel for small electrical generators. In Europe the use of diesel is generally restricted to cars (about 40%), SUVs (about 90%), and trucks (virtually all). The market for home heating using fuel oil, called heating oil, has decreased due to the widespread penetration of natural gas. However, it is very common in some areas, such as the Northeastern United States.
Residual fuel oil is less useful because it is so viscous that it has to be heated with a special heating system before use and it contains relatively high amounts of pollutants, particularly sulfur, which forms sulfur dioxide upon combustion. However, its undesirable properties make it very cheap. In fact, it is the cheapest liquid fuel available. Since it requires heating before use, residual fuel oil cannot be used in road vehicles, boats or small ships, as the heating equipment takes up valuable space and makes the vehicle heavier. Heating the oil is also a delicate procedure, which is inappropriate to do on small, fast moving vehicles. However, power plants and large ships are able to use residual fuel oil.
Residual fuel oil was used more frequently in the past. It powered boilers, railroad locomotives and steamships. Locomotives now use diesel, steamships are still used however are not as common as they were previously due to their higher operating costs, (most LNG carriers use steam plants as boil off gas emitted from the cargo can be used as a fuel source), and most boilers now use heating oil or natural gas. However, some industrial boilers still use it and so do a few old buildings, mostly in New York City. Residual fuel’s use in electricity generation has also decreased. In 1973, residual fuel oil produced 16.8% of the electricity in the United States. By 1983, it had fallen to 6.2%, and as of 2005, electricity production from all forms US Petroleum Holdings of petroleum, including diesel and residual fuel, is only 3% of total production. The decline is the result of price competition with natural gas and environmental restrictions on emissions. For power plants, the costs of heating the oil, extra pollution control and additional maintenance required after burning it often outweigh the low cost of the fuel. Burning fuel oil, particularly residual fuel oil, also produces much darker smoke than natural gas, which affects the perception of the plant by the community.
Heavy fuel oils continue to be used in the boiler “lighting up” facility in every coal-fired power plant, of which there are a small number in the UK and dozens in China. Although on an enormous scale, it is analogous to lighting kindling to start a fire – without performing this simple function it is difficult to begin the large-scale combustion process.
The chief drawback to residual fuel oil is its high initial viscosity, particularly in the case of No. 6 oil, which requires a correctly engineered system for storage, pumping, and burning. Though it is still usually lighter than water (with a specific gravity usually ranging from 0.95 to 1.03) it is much heavier and more viscous than No. 2 oil, kerosene, or gasoline. No. 6 oil must, in fact, be stored at around 100°F (37.8°C) heated to 150°F (65.6°C)–250°F (121.1°C) before it can be easily pumped, and in cooler temperatures it can congeal into a tarry semisolid. The flash point of most blends of No. 6 oil is, incidentally, about 150°F (65.6°C). Attempting to pump high-viscosity oil at low temperatures was a frequent cause of damage to fuel lines, furnaces, and related equipment which were often designed with lighter fuels in mind.
(For comparison, BS2869 Class G Heavy Fuel Oil behaves in similar fashion, requiring storage at 104°F (40°C), pumping at around 122°F (50°C) and finalising for burning at around 194°F (90°C) / 248°F (120°C).)
Most of the facilities which historically burned No. 6 or other residual oils were industrial plants and similar facilities constructed in the early or mid 20th century, or which had switched from coal to oil fuel during the same time period. In either case, residual oil was seen as a good prospect because it was cheap and readily available, even though it provided less energy per litre than lighter fuels. Most of these facilities have subsequently been closed and demolished, or have replaced their fuel supplies with a simpler one such as gas or No. 2 oil. The high sulfur content of No. 6 oil– up to 3% by weight in some extreme cases– had a corrosive effect on many heating systems (which were usually designed without adequate corrosion protection in mind), shortening their lifespans and increasing the polluting effects. This was particularly the case in furnaces that were regularly shut down and allowed to go cold; the internal condensation produced sulfuric acid.
Environmental cleanups at such facilities are frequently complicated by the use of asbestos insulation on the fuel feed lines. No. 6 oil is very persistent, and does not degrade rapidly. Its viscosity and stickiness also make remediation of underground contamination very difficult, since it reduces the effectiveness of methods such as air-stripping.
When released into water, such as a river or ocean, residual oil tends to break up into patches or tarballs– mixtures of oil and particulate matter such as silt and floating organic matter- rather than form a single slick. An average of about 5-10% of the material will evaporate within hours of the release, primarily the lighter hydrocarbon fractions. The remainder will then often sink to the bottom of the water column.
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.
Classfication of oil for US Petroleum Holdings
. Brent Crude, 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 Shetlands. 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 Middle East oil flowing to the Asia-Pacific region.
. 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 used to be the average price of the following blends:
o Arab Light Saudi Arabia
o Bonny Light Nigeria
o Fateh Dubai
o Isthmus Mexico (non-OPEC)
o Minas Indonesia
o Saharan Blend Algeria
o 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.
In June 15, 2005 the OPEC basket was changed to reflect the characteristics of the oil produced by OPEC members. The new OPEC Reference Basket (ORB) is made up of the following: Saharan Blend (Algeria), Minas (Indonesia), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and BCF 17 (Venezuela).
Oil Production by Country:
. Saudi Arabia (OPEC) – 10.37 MMbbl/d
. Russia – 9.27 MMbbl/d
. United States 1 – 8.69 MMbbl/d
. Iran (OPEC) – 4.09 MMbbl/d
. Mexico 1 – 3.83 MMbbl/d
. China 1 – 3.62 MMbbl/d
. Norway 1 – 3.18 MMbbl/d
. Canada 1 – 3.14 MMbbl/d
. Venezuela (OPEC) 1 – 2.86 MMbbl/d
. United Arab Emirates (OPEC) – 2.76 MMbbl/d
. Kuwait (OPEC) – 2.51 MMbbl/d
. Nigeria (OPEC) – 2.51 MMbbl/d
. United Kingdom 1 – 2.08 MMbbl/d
. Iraq (OPEC) 2 – 2.03 MMbbl/d
In order of amount exported in 2003:
. Saudi Arabia (OPEC)
. Russia
. Norway 1
. Iran (OPEC)
. United Arab Emirates (OPEC)
. Venezuela (OPEC) 1
. Kuwait (OPEC)
. Nigeria (OPEC)
. Mexico 1
. Algeria (OPEC)
. Libya (OPEC) 1
Though still a member, Iraq has not been included in production figures since 1998
Invest in oil or in gas
- U.S. domestic oil production increased throughout the 1950’s and 1960’s. Writing in the 1950’s, American geologist M. King Hubbert predicted that the production of U.S. oil fields would peak in the early 1970’s. It happened that U.S. production began to decline in 1970. Hubbert’s key insight was that production peaks once half the oil in any field has been extracted. Far more oil is extracted in the early stages of production than later on. In 1970, the U.S. satisfied about 70% of its needs from domestic oil production. Now, however, the picture is much bleaker, as the U.S. satisfies about 35% of its needs from domestic production and imports the rest.
- Since 1969, the North Sea utilizing advanced technology has produced about 15 billion barrels of oil, helping Norway become rich, and Britain to shed its status as a third rate economy. Production in the British sector, however, has already started to decline and Norway close to peak production. The North Sea has shown that technology is a double-edged sword by extracting more oil up front, but hastening the day of reckoning when production starts to decline.
- Princeton professor Kenneth S. Deffeyes, a colleague of Hubbert, sought to apply Hubbert’s geological precepts on a worldwide basis. Other geologists have made the same effort, and while they do not all agree on the same year, the general conclusion is that world oil production is now close to peaking!
- The reserves of the OPEC countries are overstated. Quotas for the members are determined by production capacity, and production capacity is directly related to reserves. In 1988 for example, Iraq announced that their reserves had more than doubled to 100 billion barrels. This was a miraculous feat, despite continued production and the total absence of exploration. The Saudis, Iraq, and Iran have all engaged in overstating reserves.
- China’s economy is growing by leaps and bounds, and has an insatiable thirst for energy. If China’s per capita energy consumption comes anywhere close to that of the U.S., their need for oil will surpass that of the U.S.
- Present world oil production is around 77 million barrels per day, and the International Energy Agency projects that world oil production will peak at around 80 million barrels per day.
- Oil from new exploration, including any efforts to open up the Arctic National Wildlife Refuge, will barely make a dent in our growing need for energy.
- Oil prices are set to soar! The only question is whether they do so rapidly and abruptly sending the economy and financial markets into a tailspin, or gradually, triggering high and rising inflation.
- Considering the peak reached in 1981, and adjusting for present demand and inflation, some reliable sources have predicted that oil could reach $100 per barrel by the end of the decade.
- Natural gas is also in short supply in the U.S. Over the next decade, U.S. demand for natural gas is expected to grow by over 30%. Even after natural gas prices soared in 2000, generating record drilling, natural gas production increased only 2% in 2001- not enough to meet one year’s growth in demand.
- Alternative energy sources (wind, solar, nuclear etc.), are not positioned to replace fossil fuel demand any time in the near future. Coal is not an acceptable alternative because of the environmental problems associated with burning coal.
- Obviously, given the current level of drilling activity both in the U.S. and overseas, oil and gas development can be a very profitable investment at today’s prices. Looking to the future, the financial picture becomes even brighter, and suggests that now more than ever is the time to get involved and ride the crest of the wave.
- In the mid 1990s technological breakthroughs, enabled the industry to evaluate seismic survey data in three dimensions. A 3-D seismic survey, versus a 2-D seismic survey, is rather like looking at a CAT SCAN versus a regular X-RAY. In certain geological formations, 3-D seismic can accurately identify accumulations of oil or gas. This has given the smaller independent oil companies the ability to compete with the majors, particularly on the smaller lease plays. In turn, this has benefited private capital and the individual investor by affording the ability to invest in oil and gas prospects, previously considered the domain of the majors.
- The 1990s also saw technological breakthroughs in the use of horizontal drilling techniques. Horizontal drilling in areas, such as the Austin Chalk in Texas, has boosted the production rates of wells, making them more economical to drill and providing a faster return on investment.
Drilling an Oil Well in US Petroleum Holdings
DRILLING AN OIL WELL
The earliest oil wells were drilled percussively (cable-tool drilling), that is, holes were drilled simply by hammering at the earth. Very soon, the limited depths which this method could attain meant that rotary drilling was introduced. Modern wells drilled using rotary drills can achieve lengths of over 12,000 meters / 38,000 feet.
Until the 1970s, most oil wells were vertical (or, more specifically, were supposed to be vertical – deviations introduced by different lithology and mechanical imperfections meant that most wells were at least slightly deviated). However, modern technologies (directional drilling) allow strongly deviated wells which can, given sufficient depth, actually become horizontal. This is of great value as the reservoir rocks which contain hydrocarbons are usually horizontal, or sub-horizontal. A well, therefore, which passes along a reservoir (rather than through it, as a vertical well must) can tap a larger volume with a much larger surface area (and thus a correspondingly higher production rate). Using deviated and horizontal drilling, it has also become possible to reach reservoirs several kilometers away from the drilling place (Extended Reach Drilling), allowing to produce hydrocarbons from underneath e.g. environmentally sensitive areas or offshore close to the coast line.
Drilling
The well is created by drilling a hole (5 to 30 inches wide) into the earth with an oil rig turning a drill bit. After the hole is drilled, a metal pipe slightly smaller than the hole size (called a ‘casing’) is run into the hole. The outside of the casing is then bonded and secured to the hole with cement. The casing provides structural integrity to the newly drilled wellbore in addition to isolating potentially dangerous high pressure zones from each other and from the surface.
With these zones safely isolated and the formation protected by the casing, the well can be drilled deeper (into potentially more-unstable and violent formations) with a smaller bit, and also cased with a smaller size casing. Modern wells often have 2-5 sets of subsequently smaller hole sizes drilled inside one another, each cemented with casing.
Recent Outlook Industry of Petroleum
Energy Information Administration
Official Energy Statistics from the U.S. Government
Trends in energy supply and demand are affected by many factors that are difficult to predict, such as energy prices, U.S. economic growth, advances in technologies, changes in weather patterns, and future public policy decisions. It is clear, however, that energy markets are changing gradually in response to such readily observable factors as the higher energy prices that have been experienced since 2000, the greater influence of developing countries on worldwide energy requirements, recently enacted legislation and regulations in the United States, and changing public perceptions of issues related to the use of alternative fuels, emissions of air pollutants and greenhouse gases, and the acceptability of various energy technologies, among others The Energy Information Administration projects increased consumption of biofuels (both ethanol and biodiesel), growth in coal-to-liquids (CTL) capacity and production, growing demand for unconventional transportation technologies (such as flex-fuel, hybrid, and diesel vehicles), growth in nuclear power capacity and generation, and accelerated improvements in energy efficiency throughout the economy.
Despite the rapid growth projected for biofuels and other nonhydroelectric renewable energy sources and the expectation that orders will be placed for new nuclear power plants for the first time in more than 25 years, oil, coal, and natural gas still are projected to provide roughly the same 86-percent share of the total U.S. primary energy supply in 2030 that they did in 2005 (assuming no changes in existing laws and regulations). The expected rapid growth in the use of biofuels and other nonhydropower renewable energy sources begins from a very low current share oftotal energy use; hydroelectric power production, which accounts for the bulk of current renewable electricity supply, is nearly stagnant; and the share of total electricity supplied from nuclear power falls despite the projected new plant builds, which more than offset retirements, because the overall market for electricity continues to expand rapidly in the projection.
History of oil: Power of energy by Holding Petroleum US
The modern history of petroleum began in 1846, with the discovery of the process of refining kerosene from coal by Atlantic Canada’s Abraham Pineo Gesner. Poland’s Ignacy Lukasiewicz discovered a means of refining kerosene from the more readily available “rock oil” (“petroleum”) in 1852 and the first rock oil mine was built in Bra, near Krosno, in southern Poland in the following year. These discoveries rapidly spread around the world, and Meerzoeff built the first Russian refinery in the mature oil fields at Baku in 1861. At that time, Baku produced about 90% of the world’s oil. The battle of Stalingrad was fought over Baku (now the capital of the Azerbaijan Republic ).
