Production Fundamentals
Lesson Overview
The Production Fundamentals Lesson consists of the following topics
- Learning Objectives
- Hydrocarbon Type: Oil vs. Gas
- Reservoir Type: Conventional vs. Unconventional
- Unconventional Oil: Scope & Types
- Unconventional Gas: Scope & Types
- Natural Reservoir Drives
- Location: Onshore vs. Offshore
- Facilities: Surface vs. Sub-Surface
- Production System – Facility Details
- Crude Oil Processing
- Natural Gas Processing
- CBM Wells: Water Challenge
- Managing Field Decline
- Mature Field Development
- Gathering Systems
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Hydrocarbon Type: Oil vs. Gas
Drilling and production in the US has been focused on gas since the late 90’s, currently, 80% of the US wells drilled are gas wells.
Energy experts agree that the fuel of choice in the 21st century will be natural gas, primarily because it is the cleanest burning of all the fossil fuels.
From a production standpoint, there are only a few differences between oil and gas in conventional wells.
- Gas wells are often deeper that oil wells.
- Gas wells usually don’t require any artificial techniques to lift the gas to the surface because gas wells tend to have higher pressures at the surface than oil wells.
- Surface equipment for gas wells needs to be designed to handle these higher pressures.
Reservoir Type: Conventional vs. Unconventional
Once hydrocarbons are released from either conventional wells or unconventional reservoirs, they have generally the same characteristics.
In the early oil and gas development, all wells were vertical because the reservoirs were “conventional”, with the reservoir rock in clearly defined layers, easily reached and produced.
Hydrocarbons are now found trapped in many different types of complex formations. Sophisticated engineering techniques are needed to analyze and deal with a wide variety of reservoirs with both low-permeability and porosity, often called tight formations.
Unconventional reservoirs cannot produce economic volumes of oil and gas without assistance from massive stimulation treatments, called fracturing, and/or special recovery processes and technologies.
Unconventional gases are often stored tightly through adhesion of the molecules to the rock itself. Both drilling and production of unconventional reserves is technically complex.
Well completion and production techniques in directional, horizontal and multilateral wellbores, often used to recover unconventional reserves, are also much more complicated than completing a conventional vertical borehole.
Unconventional Oil: Scope & Types
Each unconventional oil project requires a different type of production plan, development strategy and facilities.
Bituminous Oil Sands
Commonly referred to as oil sands or “tar” sands are a mixture or sand, clay, water and a very dense form of petroleum known as bitumen.
When oil prices are high (greater than $60/bbl), new technologies help enable economic extraction of this oil. Oil sands recovery involves use of massive quantities if steam to release the oil from the sands. A recovery well then removes the oil, steam, water mixture for further processing at the surface.
Extra heavy oil is a dense, low API gravity (less than 10°) and viscous oil that has a high content of asphaltenes, which are very large molecules incorporating most of the sulfur and perhaps 90% of the metals in the oil. To sustain commercial well production rates, heavy and extra-heavy oil production almost always requires measures to reduce oil viscosity.
For example, when super-heated steam is injected into a reservoir, oil viscosity is reduced and reservoir pressure is increased through displacement and partial distillation of the oil. Steam may be injected continuously to form a steam flood or it may be injected in cycles, with wells used alternately for injection and production.
Extra-heavy oil commonly also requires the addition of diluents (gas condensate, natural gas liquids, or light crude) at the surface to enable the oil to be transported by pipeline. Extra-heavy oil must also be chemically upgraded to reduce density and remove contaminants before it can be used as refinery feedstock. In recent projects in the Venezuelan Orinoco heavy oil belt, 1 barrel of diluent is required for every 3 or 4 barrels of extra-heavy oil produced.
Shale Oil
Oil shale production requires use of heavy mining equipment as was discussed in detail in the Exploration Module.
Unconventional Gas: Scope & Types
Interest in unconventional natural gas resources is growing around the world, and include:
Coal bed methane (CBM), which is natural gas trapped in coal, can be extracted and produced through shallow production wells. Gas can reside in a coal seam in two fashions. Either it is absorbed into the coal, or it can occupy porous space within the coal seam fractures. From a production standpoint, CBM is considered a “sweet” gas because it contains no hydrogen sulfide H2S (sour gas).
Tight gas formations refer to low permeability sandstone reservoirs that require fracturing and advanced production technology to produce. Tight gas sands reservoirs also have a wide geographic dispersion. Economics dictate wellbore positioning close to the gas resource and tight gas reservoirs can require thousands of wells (and corresponding surface facilities) to drain. Horizontal drilling and well completion is one technique that can make tight gas sands more economic.
Shale gas formations tend to act like the tight gas formations. Shales often hold gas when two thick shale deposits sandwich a thinner area of shale. US shale gas discoveries of the 1950’s are now economic. Fractured shales in the Barnett Field in Fort Worth, Texas produce about 500 (BcfD), thanks to advanced production technologies like horizontal wells and hydraulic fracturing used to help drain the reservoir.
Large tight gas and shale gas formations and reservoirs also exist in other parts of the world. It is expected that they will be developed as the current conventional gas reservoirs deplete, economics warrant development and the US recovery technologies are more widely understood and adopted.
Natural Reservoir Drives
Another key reservoir characteristic affecting production efficiency is called drive, which is the term for the ability to get the fluids moving from the reservoir, upward to the surface.
During the initial stages of a well’s production life, reservoir fluids (oil, gas and water) are kept moving as long as the pressure from the natural energy source is greater than the weight of the flowing oil or gas.
The three most common drivers are water, gas and gravity. The reservoir drive characteristic are the major factors affecting design of the production facilities.
- In water drive, the actual weight of the water in the reservoir is greater than that of the oil or gas, so it forces the lighter hydrocarbons to the surface. Water is more efficient than gas in displacing oil from the pores of rocks. It is not uncommon for a reservoir to empty approximately 50-75% of it’s hydrocarbons by this natural driver alone.
- In gas drive, trapped gas in a reservoir ( called a gas-cap) is under extreme pressure. When the wellbore punches through to the reservoir the pressurized gas-cap forces the well fluids to the surface. Anticipated recovery rates for a gas cap reservoir are up to 40%.
- Gravity drive works because most reservoirs are not perfectly horizontal. They can have highly tilted or even vertical structures. In this geology, the weight of the reservoir fluids flowing downhill, are heavier than that of the fluids being forced up through the production tubing.
Onshore vs. Offshore
Design and operation of production facilities must follow the safety and environmental regulations set down by a governing authority. In most counties, the coast line marks the boundary that determines which agency is responsible for a facility.
Onshore – Refers to all activities, equipment and pipelines located on land. This also includes shallow-water rigs, production facilities and platforms operating in inland channels, wetlands and marshes. In the US, onshore production facilities are under the jurisdiction of the Department of Transportation (DOT) and the Environmental Protection Agency (EPA).
Offshore – Refers to all activities, equipment and pipelines located off a coast line designated by the regulatory authority in the producing country. In the US that authority is the Minerals Management Service (MMS).
Surface vs Subsurface Facilities
As the chart shows, production equipment is categorized into:
- Surface equipment, which refers to all activities and equipment located on the surface of the land or the deck of an offshore platform.
- Sub-surface equipment, which refers to all activities and equipment located downhole or below the platform on the sea-bed (also called subsea equipment).
Production System – Facility Details
Understanding oil and gas production and facilities involves knowledge of three distinct but intimately connected systems, as shown in the chart:
- the reservoir, both the rock structure and the reservoir fluids
- the subsurface structures, which include the well bore, bottomhole and wellhead assemblies, and,
- the surface gathering, separation and storage facilities.
Traditionally, the reservoir oil, gas, and water are not transported long distances as a mixed stream, but instead are separated at a processing facility in close proximity to the wells. Formation water is usually sent back into the ground through a re-injection well.
Once separated, the commercial oil or gas is stored to prepare for transport.
Crude Oil Processing
As crude oil is produced, the oil, oil/water emulsions, and other water extracted from the well passes through a variety of processes. At the well site, certain tanks are used to store good product while other tanks are used to store well waste that must be carefully handled to protect personnel and the environment.
Tank farms or “batteries” will vary greatly in size and the total number of tanks is based on the amount of daily oil and waste that a well generates.
The separation process begins the process of sorting good oil from bad liquids. From the separation tanks several piping systems appropriately route waste and oil.
Natural Gas Processing
As gas emerges from the well it is usually under a pressure and temperature high enough that hydrates (crystalline compound) can’t form. Hydrates can severely reduce the amount of gas that gets to the surface because they cause blockage in the production tubing, the pumping equipment, and the flow lines from the wellhead.
As the gas leaves the well and begins to cool, it must then pass through a series of heaters to prevent hydrates from forming in the gas.
As the chart shows, the gas is also treated to remove unwanted contaminants such as H2S (poisonous Hydrogen Sulfide) carbon dioxide and nitrogen – to get it acceptable for injection into a pipeline for sale.
CBM Wells: Water Challenge
Unconventional reserves require special production facilities.
As one example, every coal Based Methane field produces some water, and the water production can be as high as hundreds of barrels per MMCF.
In order for gas to be de-coupled from the coal, production operators depressurize the reservoir, which allows the gas to escape from the coal, and also generates the water.
A water lifting, handling and disposal strategy must be developed. One successful strategy, shown in the picture, is to assign the wellbore tubing the task of water management and the tubing/casing annulus to the task of gas production.
Managing Field Decline
The inevitable fact of every oil and/or gas field is that production will eventually decline. Rates of decline can vary dramatically, as can the point at which a well or a field becomes uneconomic to produce.
Today, many oil reserves are being depleted faster than ever before. Because of this fact and with ever increasing crude oil prices, mature fields (with older, produced wells) are being reworked to become more productive, utilizing technologies that didn’t exist when the well was at its production peak.
Mature Field Development
“Mature” is the term used for the state of a source rock or reservoir with respect to its ability to generate oil or gas.
- As a source rock begins to mature, it releases gas. Note that above a temperature of approximately 212oF, only dry gas is generated, which does not need treatment to remove gas liquids.
- As an oil bearing source rock matures, the heavy oils are succeeded by medium and light oils.
Development of mature oil fields will increasingly be an attractive opportunity. Mature field development practices include tertiary recovery, infill drilling, horizontal wells, optimal water-flooding design, optimal well placement and other innovative reservoir management practices.
Gathering Systems
Once treated, oil and gas then moves into a gathering system to transport and control the flow from the wells to a main storage facility, processing plant or shipping point.
There are two types of gathering systems, radial and trunk line. The radial type brings all the flow lines to a central header. The trunk-line system uses several remote headers to collect oil and gas and is used most often in large fields that cover a large geography.
A gathering system includes a variety of production equipment :
- Flow line networks, headers and pumping facilities,
- Separators, emulsion treaters, compressors, dehydrators, and
- Tanks, valves, regulators and associated equipment.
Related Resources:
What is the difference between Upstream and Downstream?
Drilling Wells for Oil and Gas and Offshore Drilling