Oil and Gas Production
Lesson Overview
The Production and Offshore Construction module consists of seven lessons:
- Introduction to Production and Offshore Construction – What does this module cover?
- Production Fundamentals – How do the key factors affecting production work together?
- Well Completion – preparing the well for production.
- Business Drivers – What are the key measures and drivers that impact production operations?
- Business Processes – What are key business processes used by the oil and gas and offshore construction industries to manage global production operations?
- Production Trends – What are the trends affecting the future of production?
- Industry References – Where can I go for further information?
Learn More About Oil and Gas Production With Oil 101
Oil and Gas Production Overview
The Production and Offshore Construction Module provides a high level overview of production operations and introduces the offshore contractors and production service providers that assist E&P companies to efficiently produce oil & gas.
Once oil or gas are found with a wildcat or discovery well, the next step in adding value to reserves is to get the reservoir fluids brought to the surface, or “produce” them. Production technology, equipment and processes also focus on maintaining the well throughout its economic life and the necessary processing facilities.
The easy oil and gas throughout the world has already been produced, and there are new challenges to leave as little valuable hydrocarbon resource behind as possible, over what may be a 100+ year life of a field. Ultimate recovery, to maximize the value of a lease holding, is one of the greatest underlying themes for the future of the oil and gas industry.
This module focuses on management of the technology of well completions, field development plans and facilities, often called production operations. Like the drilling module, it is helpful to divide the subject into four basic themes around the key factors that drive complexity in managing production, including:
- Hydrocarbon type, whether oil or gas
- Reservoir type, whether conventional or unconventional
- Location, whether onshore or offshore, in remote or severe climate environments
- Finally, the facilities, including surface and subsurface completion and processing equipment
There are two important reasons to understand the technical aspects of production. First, technology is the limiting factor in finding and producing ever more scarce resources. It also helps to understand the offshore construction industry which is large and complex. It manufactures, assembles and delivers the equipment to produce from offshore wells, a substantial portion of the world’s reserves.
Historical Perspective
Historical records show that the Chinese first discovered well completions around 1000 BC; primarily for saltwater wells. With the discovery of oil in Pennsylvania in 1859, the industrial petroleum era, as we know it, was born.
Soon other large gushers were discovered in:
- Spindletop, Texas, in 1901 with a 100,000 BPD discovery at 1,170 feet. The Lucas well gusher tripled US oil production overnight.
- Signal Hill, California in 1921, where the Alamitos was completed at a depth of 3,114 feet and led to the development of one of the most productive oil fields in the world.
Oil from these wells came in so quickly that ditches were used to get to move it away from from the well. Thus the origin of the term upstream (toward the well) and downstream (toward the tanks and facilities).
READ MORE ABOUT THE DIFFERENCE BETWEEN UPSTREAM AND DOWNSTREAM
(Visit our History of Oil page for more events)
The industry has come a long way since then, with complex technologies and equipment now completing wells at depths of 25,000 feet, in offshore waters as deep as 3,000 meters.
Another factor affecting production operations is the life of an oil or gas field.
The world’s oldest producing oil well, McClintock No. 1 in Titusville, Pennsylvania, celebrated its 140th birthday in September 2001 and recently underwent remedial work to restore its health.
Now a property of the State of Pennsylvania, McClintock No. 1 was drilled in August, 1861, at a depth of 190m (620 feet). At one point, it produced 50 BPD from the third sand. Today, it can produce 12 barrels a month, that is if the pumps are turned on! Salt water needs to be taken care of because the well now pumps more brine than oil!
This factor drives the need for accuracy and consistency in recording all of what is done to a well, called the well history.
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Related Resources:
What is the difference between Upstream and Downstream?
Drilling Wells for Oil and Gas and Offshore Drilling