Monday, October 22, 2007

Oil Extraction

Today’s oil and gas industry workers, including geologists who find crude oil and natural gas deposits; site supervisors who oversee field operations; and refiners, use computers and other technology to make their work easier, more efficient and less costly. And doing that is becoming easier as more and more technology is developed.

Large oil companies have a definite advantage when it comes to using technology, since advanced technology costs more than small companies can afford. A lot of the technological innovations are not feasible except for big oil companies. But some pieces of technology are available to all, and even the small companies have latched onto them. Some of the top technologies in drilling include logging while drilling, horizontal drilling, “smart” drill bits, and new methods for recovering oil.

Basic forms of logging while drilling, where a driller views the inside of the hole being drilled in one way or another, have been around for some time. Logging is used here in the form that you log, or check and write up, what is happening as it occurs. Keeping track of what you are hitting or missing helps in future drilling. There are various techniques of logging. Such techniques make drilling more efficient, meaning less money is spent on getting to crude oil, which eventually could lower consumer prices for oil-related products, such as gasoline.
Not all oil deposits are readily accessible to a traditional vertical well. In fact, in recent years many oil wells have been dug starting on one piece of land and crossing underneath a body of water to another piece of land to reach the deposit.
Surface drilling equipment is offset from the oil deposit. At the start of the drill process, the well is drilled vertically, then a few degrees at a time it turns whichever direction is needed to hit the deposit. Sometimes the arc of the well is great, other times less, depending on how sharp a turn has to be made.
The drilling part that actually tears or chips away at soil, rock and other materials as a well is dug, called a drill bit, is an essential tool to drilling a well. In recent years, technology advancements have made such tools more capable, longer lasting and less expensive. Newer bits, which have carbide teeth and are specially designed for different types of material, can go between 30,000 and 40,000 feet before needing to be replaced.
Rotary drilling allows the use of fluids or drilling mud as rock is chipped away. The fluid washes out the drill hole as it goes, making the process more efficient. The fluid also stops an oil well from bursting forth unexpectedly (known as a “gusher”).
In the best conditions, nature helps oilfield workers bring their find to the surface after a well is drilled. After an initial surge, either large or small, pressure in the reserve decreases, meaning other methods must be used to get the rest.
One of those methods is artificial lift. With this method, a pump sucks oil into tubing which then feeds into a storage container on ground level. Several years back, walking beams—arms which pump back and forth like a teeter-totter to suck the oil upward—were a common site in Oklahoma, Texas, Louisiana, California and other oil-producing states. Another form of artificial lift involves pumping gas bubbles into oil to decrease its density, making it lighter and thereby allowing reservoir pressure to pump it out. Both of these methods leave much oil in the reservoir, meaning other methods must be employed to get the rest.
Water or gas injection are also alternative methods of bringing the oil to the surface. With gas injection into the top of the reservoir, a gas cap forms, forcing oil to the bottom and then pressuring it out. To use water flooding, water must be entered into another well site connected to the well being worked on. The water floods into all wells, forcing oil to the top, since oil floats on water. To see this, take any common oil, such as the kind found in most kitchens, and pour some into a cup of water. The two fluids stay separate with the oil on top even after vigorous mixing.
Natural gas can be pumped into a reservoir to mix with the oil, making it light enough to flow. Another option is to use a surfactant or soap-like substance ahead of water and behind the oil. The substance forms a barrier around the oil, and water behind the substance pushes the oil to the surface. The soapy substance also ensures a thorough gathering of oil.
Heat also can be used to get oil flowing. Up to a million times thicker than water, oil can be thinned by blasting steam into the reservoir. Water is first pumped off, then oil is gathered.
About the Author:
Chris Jent is Chief Marketing Officer of Triple Diamond Energy Corporation. Triple Diamond Energy Corporation is an independent producer of oil and natural gas. Located in the Dallas area, the company specializes in acquiring the highest quality prime oil and gas properties.

Thursday, October 18, 2007

What is an independent oil and gas company?

The basic definition of an Independent Oil and Gas Company is a non-integrated company which receives nearly all of its revenues from production at the wellhead. They are exclusively in the exploration and production segment of the industry, with no downstream marketing or refining within their operations. The tax definition published by the IRS states that a firm is an Independent if its refining capacity is less than 50,000 barrels per day on any given day or their retail sales are less than $5 million for the year. Independents range in size from large publically held companies to small proprietorships. Many independents are privately held small companies with less than 20 employees. The Independent Petroleum Association of America (IPAA) recorded in a 1998 survey that “a large percentage of independents are organized as C Corporations and S Corporations at 47.6% and 27.7%, respectively. A total of 91.4% of responding companies are classified as independent (versus integrated) for tax purposes. More than one fifth of responding companies reported their stock is publicly traded. “

Independent producers derive investment capital from a variety of sources. A 1998 IPAA survey reports that 36.2% of capital is generated through internal sources followed by banks 27.8 % and outside investors (oil & gas partners) at 20.3 %.

Supplying Future Energy Needs
The U.S. Energy Information Administration (EIA) states in their Annual Energy Outlook 2007, “Despite the rapid growth projected for biofuels and other non-hydroelectric 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.” In this report the EIA also predicts consistent growth in U.S. energy demand from 100.2 quadrillion Btu in 2005 to 131.2 quadrillion Btu in 2030.

Maturing production areas in the lower 48 states and the need to respond to shareholder expectations have resulted in major integrated petroleum companies shifting their exploration and production focus toward the offshore in the United States and in foreign countries. Independent oil and gas producers increasingly account for a larger percentage of domestic production in the near offshore and lower 48 states. Independent producers’ share of lower 48 states petroleum production increased form 45 percent in the 1980’s to more than 60 percent by 1995. Today the IPAA reports that independent producers develop 90 percent of domestic oil and gas wells, produce 68 percent of domestic oil and produce 82 percent of domestic gas. Clearly, they are vital to meeting our future energy needs.

About the Author:
Chris Jent is Chief Marketing Officer of Triple Diamond Energy Corporation. Triple Diamond Energy Corporation is an independent producer of oil and natural gas. Located in the Dallas area, the company specializes in acquiring the highest quality prime oil and gas properties.

Tuesday, October 16, 2007

How Petroleum is Formed

Petroleum is made primarily of mixtures of hydrocarbons, compounds of carbon, and hydrogen. Scientists believe petroleum hydrocarbons come from the remains of tiny animals and plants that lived millions of years ago.

The idea that oil was created from dinosaurs is a myth. Though dinosaurs were huge creatures, there simply weren’t enough of them to create such large amounts of oil.

When tiny organisms die, they sink to the bottom of the sea and are mixed with mud and silt. Over time, hundreds of feet of mud containing the organisms accumulate. Bacteria removes most of the oxygen, nitrogen, phosphorus, and sulfur, leaving mainly hydrogen and carbon. Lack of oxygen keeps the animals and plants from decaying completely.

The partially decomposed organisms create a slimy mass, which is then covered with layers of sediments. Over millions of years, many layers of sediment pile on top of the once-living organisms. The weight of the sediment compresses the mud into a fraction of its original thickness. When the depth of burial reaches about 10,000 feet, heat, time and pressure turn the organisms into different types of petroleum.

Higher temperatures usually produce lighter petroleum. Lower temperatures create a thick material, like asphalt. As the heat continues to alter the substances, gas is often produced. Depending on how much gas is present, sometimes it will stay mixed with the oil and sometimes it will separate. At temperatures above 500 degrees Fahrenheit, the organic matter is destroyed and neither oil nor gas is formed.

The mud and silt become more and more compressed and turn into a rock known as shale. As the mud is being compressed into shale, the oil, gas and saltwater are squeezed out. The fluids move from the original rock, known as the source rock, to a new rock, called a reservoir rock.

About the Author:
Chris Jent is Chief Marketing Officer of Triple Diamond Energy Corporation.Triple Diamond Energy Corporation is an independent producer of oil and natural gas. Located in the Dallas area, the company specializes in acquiring the highest quality prime oil and gas properties.

Sunday, October 14, 2007

Crude Oil and Heating Oil Reserves

Currently coal, oil and natural gas provide more than 85% of all the energy consumed in the United States, nearly two-thirds of our electricity, and virtually all of our transportation fuels. Moreover, it is likely that the nation’s reliance on fossil fuels to power an expanding economy will actually increase over at least the next two decades even with aggressive development and deployment of new renewable and nuclear technologies.

In the event of a major supply interruption, there are two reserves that could be released into the market on the Presidents order. They are:

Strategic Petroleum Reserve
The U.S. Strategic Petroleum Reserve is the largest stockpile of government-owned emergency crude oil in the world. Established in the aftermath of the 1973-74 oil embargo, the SPR provides the President with a powerful response option should a disruption in commercial oil supplies threaten the U.S. economy. It also allows the United States to meet part of its International Energy Agency obligation to maintain emergency oil stocks, and it provides a national defense fuel reserve.
The Energy Policy Act of 2005 directed the Secretary of Energy to fill the SPR to its authorized one billion barrel capacity. This required the Department of Energy to complete proceedings to select sites necessary to expand the SPR to one billion barrels.

Northeast Home Heating Oil Reserve
Of the 7.7 million households in the United States that use heating oil to heat their homes, 5.3 million households or roughly 69 percent reside in the Northeast region of the country - making this area especially vulnerable to fuel oil disruptions.

On July 10, 2000, President Clinton directed Energy Secretary Bill Richardson to establish a two million barrel home heating oil component of the Strategic Petroleum Reserve in the Northeast. The intent was to create a buffer large enough to allow commercial companies to compensate for interruptions in supply during severe winter weather, but not so large as to dissuade suppliers from responding to increasing prices as a sign that more supply is needed.

Two million barrels would give Northeast consumers adequate supplies for approximately 10 days, the time required for ships to carry additional heating oil from the Gulf of Mexico to New York Harbor.

About the Author:
Chris Jent is Chief Marketing Officer of Triple Diamond Energy Corporation . Triple Diamond Energy Corporation is an independent producer of oil and natural gas. Located in the Dallas area, the company specializes in acquiring the highest quality prime oil and gas properties.

Friday, October 12, 2007

An Overview of Petroleum

Oil and natural gas together make up petroleum. Petroleum literally means "rock oil", which refers to its solid state called asphalt. Petroleum can also be found in two types of liquid form. Crude oil is dark and sticky. It’s called condensate if it’s clear and volatile. Condensate evaporates very easily. In the semisolid state, petroleum is called bitumen. So what is petroleum actually made of? It looks like a simple black gooey mass, but it is actually a mixture of many chemicals, formed by decomposed remains of living things.

Different chemicals can be separated out at refineries and petrochemical plants. Then the chemicals or chemical groups can be made into a huge range of different things. Companies like Triple Diamond Energy Corporation help find the oil, drill it and get it into production so that we can enjoy many of the products we use today. Polyurethane skateboard wheels, impact absorbing helmets and pads, even the polycarbonate case on your laptop are all produced from oil.

Petroleum in its thickest form is called bitumen. Bitumen is mainly used for paving roads. Bitumen is also popular in waterproofing roofs. It can be mixed with sand or clay and water to produce what is known as oil sands. Oil sands are similar to tar, but the materials are naturally occurring.

Bitumen is a nearly solid form of oil and is very expensive to process into gasoline or other usable fuels. Therefore, oil sands are being mined almost exclusively to extract the oil, convert it into synthetic oil, or it is being refined for other petroleum products, such as plastic.

Crude oil is a form of petroleum that is in a more liquid state than bitumen. It is mostly black or brown, but can also be yellow or green depending on its components. Crude oil from Sudan is black and North Sea oil is dark brown. Oil from Utah is amber while Texas oil is more yellow. "Sour" oils contain more sulfur and need extra processing in refineries. "Sweet" oils are much easier to refine. If someone mentions sour crude oil, they are referring to the heavier oil. Sweet grade oil usually refers to the lighter crude, found in places like Texas.

The lightest hydrocarbon molecules are so volatile that they evaporate very easily and form natural gas. Nearly every oil deposit contains at least some natural gas. Some have so much of these molecules that they are almost completely natural gas. Natural gas is a very clean burning resource that we use to cool and heat homes and businesses. It is used to generate electricity. We use it in many of the products that we utilize daily such as carpet, medicine, medical equipment, plastics and fertilizers.

Triple Diamond Energy Corporation is an independent producer of oil and natural gas. Located in the Dallas area, the company specializes in acquiring the highest quality prime oil and gas properties.