A Brief Overview of Petroleum Oil Resources

Mohammed Samad

AMEC Oil and Gas, Houston, USA

Email: samad.buet@gmail.com

Back to Basics–Technical Review : Received 28 April 2012; received in revised form 11 June 2012; online published 16 July 2012

 

The use of petroleum products play important role in modern civilization. Petroleum products are directly used for producing electric power, running vehicles, planes, ships etc., running engines for agricultural use and many other areas related to human benefits. In addition, petroleum products are used as raw materials to create products such as plastics, polyurethane, solvents, asphalt, and hundreds of other intermediate and end-user goods.

The word ‘petroleum’ is made up of the Latin words ‘petr’ and ‘oleum’. ‘Petr’ means rock and ‘oleum’ means oil. Petroleum means “rock oil” or “oil from the earth”. The oil is called so  because it is extracted from the rocks beneath the Earth, where it is formed from the evolution of accumulated fossils, over thousands of years.. The oil reserve is explored in the Earth and extracted from the economically recoverable reserves. The extraction process varies according to its location and formation in the Earth.

This article provides a brief overview of various resources of petroleum oil including the types of crude oil, and current worldwide reserves, petroleum oil facilities and petroleum industries.

1. Crude Oil

The stabilized liquid form of the oil extracted (or converted) from the reserve is called crude oil which is a complex mixture of various hydrocarbon products. Crude oil is generally not a directly useable petroleum product. It is further refined to produce hydrocarbon products such as liquefied petroleum gas (LPG), gasoline, diesel, kerosene, jet fuel, naphtha, furnace oil etc.

Crude oil is categorized on the basis of a number of criteria including ‘sulfur contents’, ‘API gravity’, ‘trading brand’ or ‘recovery methods’.

(a) Category by Sulfur Contents

Based on the amount of sulfur contents, the crude oil is called Sweet crude or Sour crude.

(1)Sweet Crude: The crude oil having a total sulfur level less than 0.5% is called Sweet crude. Sweet crude oil contains small amount of hydrogen sulfide and carbon dioxide.

(2) Sour Crude: The sour crude contains a sulfur level greater than 0.5%. Processing sour crude is usually expensive due to the additional process of removing the sulfur.

(b) Category by API Gravity

Depending on the API gravity (1), the crude oil is categorized as Heavy, Light and Medium crude.

(1) Heavy Crude: Heavy crude oil or Extra Heavy Crude oil is any type of crude oil which does not flow easily. It is called heavy because its density or specific gravity is higher than that of light crude oil. The API gravity of Heavy crude oil is lower than 22 degree.

(2) Light Crude: Light crude oil is liquid petroleum that has a low density and flows freely at room temperature. It has a low viscosity, low specific gravity and high API gravity (greater than 31 degree). It generally has low wax content. Light crude oil produces higher percentage of gasoline and diesel fuel when converted into products by an oil refinery.

(3) Medium Crude: It is the crude oil which falls in between Heavy and Light Crude oil. The API gravity of medium crude oil is less than 31 degree and greater than 22 degree.

Both of the above categories are used to characterize the Crude Oil, such as ‘Light Sweet’ crude, ‘Heavy Sour’ crude, ‘Medium Sweet’ crude etc.

(c) Category by Trading Brand

Crude oil is classified by the trading brand when traded in the oil market. Each trading brand of crude is characterized by the specific properties. Crude oil produced from reservoirs of different geographical locations has different characteristics. So, the trading brand of the crude is generally named for a specific area of its production. Some of the major benchmark trading brands of crude are:

(1) Brent Crude: Brent Crude is sourced from the North Sea. Originally Brent Crude was produced from the Brent oil field. Brent is suitable for production of gasoline and middle distillates. It is typically refined in Northwest Europe. Brent Crude has an API gravity of around 38.06 degree and a specific gravity of around 0.835.

(2) WTI (West Texas Intermediate): It is also known as Texas Light crude. WTI is used as a benchmark of oil pricing. For WTI crude, the API gravity is around 39.6 degree, specific gravity is about 0.827 and the sulfur content is about 0.24%.

(3) ORB (OPEC Reference Basket or OPEC Basket): This is the common brand name for the crude produced and used as a price reference by OPEC countries. It consists of many other brands such as Saharan Blend (Algeria), Iran Heavy, Basra Light (Iraq), Kuwait Export, Es Sider (Libya), Qatar Marine, Arab Light, Murban (UAE) and BCF 17 (Venezuela). The OPEC Basket, which is a mix of light and heavy crudes, is heavier than both Brent crude oil and West Texas Intermediate crude oil.

(4) Dubai Crude: It is a light sour crude oil extracted from Dubai. Dubai Crude is used as a price benchmark or oil marker because it is one of the few Persian Gulf crude oils available immediately. Dubai Crude is light oil. It has an API gravity of 31 degree (sp. gr. of 0.871) and a sulfur content of 2%.

However, Brent and WTI are the major benchmark trading crudes and others follow these two brands by either adding premium or discount.

(d) Category by Source and Recovery Method

Crude oil is also categorized as Conventional and Unconventional according to the recovery methods and techniques from its reservoir or from the materials containing it.

(1) Conventional crude oil: Conventional crude oil is that which is recoverable from the reservoir through production well using standard production methods and techniques which include
• Crude flows to the surface under the pressure of the reservoir,
• Crude flows to the surface with certain pressure applied to the reservoir, or
• Crude flows to the surface with artificial lift method and technique such as submersible pumps, over-ground pump-jack, etc.

Conventional crude oil exists in the liquid phase under normal surface temperature and pressure. It also has the ability to flow through the rock within the reservoir.

(2) Unconventional crude oil: Unconventional crude oil is produced or extracted using the methods and techniques other than the conventional methods. The unconventional crude is generally heavy oil, extra heavy oil or bitumen. Unconventional oil production is less efficient, more expensive and has more environmental impacts than conventional oil production. The examples of unconventional oil are oil-sands, shale oil, CTL (Coal-to-Liquid), GTL (Gas-to-Liquid) etc.

(e) Synthetic crude oil (SCO)

There is another sort of crude called synthetic crude oil (SCO). Synthetic crude oil is not the directly extracted crude from the reservoir; it is the crude which is produced by a chemical conversion process from products of the unconventional sources of oil.

2. Conventional Oil Resource

The oil of conventional reserve remains in liquid form with the mixture of water and gas within the reservoir and it is economically recoverable with relatively simple techniques.  The resources of conventional oil are broadly classified as Onshore and Offshore, based on the location of the reservoir. Onshore oil reservoirs are located in land surface, whereas offshore oil reservoirs are located in seafloor underneath the sea water.

(a) Onshore

Onshore (land based) conventional oil is the most economical type of oil reserves. Most of the world’s largest onshore oilfields are located in the Middle East (Figure 1), but there are also large oilfields located in Brazil, Mexico, Venezuela, Kazakhstan and Russia. The large onshore oil fields are Ghawar (1) (Saudi Arabia), Khurais (Saudi Arabia), Shaybah (Saudi Arabia), Burgan (Kuwait), Dukhan (Qatar), Kirkuk (Iraq), Rumaila (Iraq), Ferdous (Iran), Azadegan (Iran), Esfandiar (Iran), Sugar Loaf (Brazil), Cantarell (Mexico), Bolivar Coastal (Venezuela), Tengiz (Kazakhstan), Kasaghan (Kazakhstan) etc.

 

Figure 1: Oil fields (including Ghawar, Khurais and Dukhan field) near Arabian Gulf. (Courtesy: Greg Croft Inc, website, www.gregcroft.com/area1indexmap.ivnu)

 

(b) Offshore

Offshore crude oil production started in the 1940s and has grown from 1 million barrels a day (mb/d) in the 1960s to nearly 25 mb/d in 2005. At this time, the offshore oil production is almost half of onshore production worldwide. It has been the main source of growth for world oil production as the onshore oil production has remained almost flat for the last few decades. Offshore oil production is more challenging than onshore due to the remote and harsher environment. However, the technology for offshore oil production facilities is improving and it is now feasible to extract oil from shallow and deep water.

Currently, there are several types of offshore production facilities (rigs) in production and they are Fixed Platform, Compliant Tower, Spar, TLP (Tension Leg Platform), Semi-Submergible, FPSO (Floating, Production, Storage and Offloading), as well as the Subsea Processing system. Most of the existing offshore oil production facilities are shown in Figure 2 (the fixed platform and compliant tower which are used for shallow water are not shown). The major offshore oil production areas are the Gulf of Mexico (GOM), West Africa, North Sea, Persian Gulf, Southeast Asia, Australia, Brazil and Canada (Newfoundland).

Figure 2: Worldwide Offshore Oil Production facilities (Courtesy: Mustang, OTC – 2010, Houston, USA).

3. Unconventional Oil Resource

The unconventional resources are those other than the conventional resources and the oil is extracted from the sources, applying relatively complex processes. The major resources of unconventional oil are oil-sands, oil shale, CTL (Coal-to-Liquid), GTL (Gas-to-Liquid), BTL (Biomass-to-Liquid) etc.

(a) Oil Sands

One of the major unconventional oil sources is ‘Oil Sands’. Oil sands are a combination of sand, bitumen, mineral rich clays and water. The exact proportions of these constituents vary from deposit to deposit. They are found in large amounts in many countries throughout the world such as Canada, Venezuela, USA and Russia. However, the largest deposits are in Canada and Venezuela. The product extracted from the oil sands is heavy and it is primarily the bitumen which is either upgraded to the synthetic crude oil (SCO) or diluted with lighter oil products to make it transferable to downstream through the pipeline.

In Canada, the bulk oil sands reserves are located in the north-east part of the province Alberta (Figure 2). The oil sands in northern Alberta constitute of the largest hydrocarbon reserves in the world. It is estimated that the total amount of bitumen is over 1.6 trillion barrels. There are three major deposits in Alberta – (1) Cold Lake, (2) Athabasca (Fort McMurray area) and (3) Peace River. Alberta oil sands are approximately 75%-80% inorganic materials (sand, clay and minerals), 3%-5% water with bitumen content ranging from 10% to about 18%. The key characteristic of Alberta oil sands is that the bitumen is encapsulated by water molecules and this makes them economically recoverable.

Figure 3: Alberta Oil Sands (Source: Wikipedia website en.wikipedia.org/wiki/Athabasca_oil_sands)

 

There are two primary methods used for extracting the oil from the oil sands: Surface Mining and In-Situ. In surface mining, the oil sands are collected from the earth surface and processed for extracting oil from the sands. In the In-Situ method, the oil is extracted directly from sands while the sands remain in their original location beneath the earth. There are various techniques applied for In-Situ methods such as Cold Flow, SAGD (Steam Assisted Gravity Drainage), CSS (Cyclic Steam Stimulation), VAPEX (Vapor Extraction Process), THAI (Toe to Heel Air Injection) etc.

(b) Shale Oil

‘Oil shale’ is an inorganic rock (Figure 4) that contains a solid organic bituminous compound known as ‘Kerogen’. When the oil shale is heated, petroleum-like liquids are released and it is converted into synthetic crude through chemical process of ‘Pyrolysis’. This crude is called ‘Shale oil’.

Extracting oil from oil shale is more complex and expensive than conventional oil recovery. The oil substances in oil shale are solid and cannot be pumped directly out of the ground. The oil shale is first mined and then heated to a high temperature to produce liquids. This method is called retorting. An alternative in-situ method is currently under experiment.

There are almost 600 known oil shale deposits around the world, of which many require more exploration to determine their potential reserves. However, worldwide technically recoverable reserves have recently been estimated at about 2.8 to 3.3 trillion barrels of shale oil, with the largest reserves in the United States (Colorado, Utah and Wyoming). Another major oil shale deposit in the US is the Bakken shale that starts from Saskatchewan (Canada) and ends in North Dakota (US). Other major deposits exist in Brazil, Australia, Sweden, Estonia, Jordan, France, Germany, China, and Russia.

The production of shale oil is significantly in progress in China, Estonia, Brazil, Australia, Morocco and Jordan, while few pilot projects are under experiment for the in-situ recovery technique in the US.

Figure 4: Oil Shale (Source: Programmatic EIS website: ostseis.anl.gov/guide/photos/index.cfm)

(c) CTL (Coal-to-Liquid)

Converting coal to liquid (CTL) fuel allows coal to be utilized as an alternative to fuel oil. There are two different methods of converting coal into liquid fuels:

(1) Direct Liquefaction: It works by breaking coal down in a solvent at high temperature and pressure. This process is efficient, but the liquid products require further refining to achieve high grade fuel characteristics.

(2) Indirect Liquefaction: It involves first gasifying the coal into synthesis gas or syngas, a mixture of hydrogen and carbon monoxide, and then converting the syngas to synthetic fuels (Figure 5). Using modern technology, indirect liquefaction produces environmentally compatible high quality and clean products.

Conversion ratios for CTL are generally estimated to be between 1 to 2 barrels/ton of coal. The ratio is affected by different properties of the coal feedstock.

South Africa has been producing CTL fuels commercially since 1955 and almost 30% of the country’s gasoline and diesel needs are produced from coal. CTL is being developed for industrial scale production in China and by other major industrial countries.

The world’s biggest reserves of coal are (in billion tones or giga-tones) in the United States (242.6, 29%), Russia (157, 18%), China (114.5, 13%), Australia (76.5, 9%), India (56.6, 7%), South Africa (48, 6%).

(d) GTL (Gas-to-Liquid)

Gas to liquids (GTL) is the process to convert natural gas or other gaseous hydrocarbons into liquid fuel such as gasoline or diesel using direct conversion or via syngas as an intermediate product with either the Fischer Tropsch or Mobil processes (Figure 5).

Figure 5: CTL/GTL/BTL Conversion (Source: Wikipedia website en.wikipedia.org/wiki/Synthetic_fuel)

 

The commercial GTL production (14,700 barrels per day) started in Bintulu GTL plant in Malaysia in 1993. The recent development for GTL is the Pearl GTL project in Qatar. The production from the first Pearl GTL train was started in June 2011. Full production from the plant is expected by the middle of 2012. The plant is designed for  a capacity of  300,000 barrels per day of synthetic fuels and other products, using natural gas as a feedstock.

(e) BTL (Biomass-to-Liquid)

BTL is not a petroleum product; it is rather an alternative source of petroleum oil. Biomass is the biological material derived from wood, waste, forest residues, yard clippings, wood chips, municipal and animal waste, crops like corn and sugar cane etc. BTL is the synthetic liquid fuels obtained from biomass through a thermo chemical process (Figure 5). It is a multi-step process to produce liquid fuels from biomass. The objective of BTL is to produce fuel components that are similar to the fossil-derived gasoline and diesel fuels.

There are primarily three types of liquid fuels produced from biomass: Biodiesel, Bioethanol and Biobutanol.

(1) Biodiesel: It is made from vegetable oils, animal fats or recycled greases. Biodiesel can be used as a fuel for vehicles in its pure form, but it is usually used as a diesel additive to reduce levels of particulates, carbon monoxide, and hydrocarbons from diesel-powered vehicles. Biodiesel is the most common biofuel in Europe.

(2) Bioethanol: Bioethanol is the alcohol made by fermenting sugar components of plant materials and it is made mostly from sugar and starch crops. Ethanol is usually used as a gasoline additive to increase octane number and improve vehicle emissions. Bioethanol is commonly used in the USA and in Brazil.

(3) Biobutanol: It is a four-carbon alcohol derived from the fermentation of biomass. It has been demonstrated to work, without modifications, for vehicles designed to run on gasoline without modification and it is used as a fuel in an internal combustion engine. Because of its certain advantages over other biofuels, it is considered to be the primary biofuel for the next generation.

The global biofuels market consists of approximately 85% bioethanol and 15% biodiesel. Bioethanol is produced and consumed mainly in Brazil and North America. On the other hand, Europe is the world leader in biodiesel production and this fuel represents about three-fourth of the European biofuels market.

4. Proven Oil Reserves and Daily Production

(a) Proven Oil Reserves

Proven reserves of oil are those reserves which are claimed to have at least 90% certainty of being recoverable using existing technology under existing economic, environmental and political conditions. It is also called P90 (because of 90% certainty of being produced) or 1P.

According to the OPEC Statistical Bulletin 2010/2011 Edition (3), the total worldwide proven oil reserve is 1,637 billion barrels (Bb) including Canadian oil sands of 170 Bb. The reserve of the OPEC countries is almost 80% of the worldwide reserves.

The major oil reserve countries (having larger than 5 Bb reserve in 2010) with the reserve quantities (rounded to nearest Bb) are:

Venezuela           297 BbSaudi Arabia        265 Bb

Canada (4)          175 Bb

Iran                    151 Bb

Iraq                    143 Bb

Kuwait                101 Bb

UAE                     98 Bb

Russia                  79 Bb

Libya                    47 Bb

Kazakhstan         40 BbNigeria                37 Bb

Qatar                  25 Bb

USA                    19 Bb

China                  18 Bb

Algeria                12 Bb

Mexico                 12 Bb

Algeria                12 Bb

Angola                10 Bb

Brazil                     9 BbNorway                  7 Bb

Equador                 7 Bb

Azerbaijan              7 Bb

Sudan                    7 Bb

India                      6 Bb

Malaysia                 6 Bb

Oman                    6 Bb

Vietnam                 5 Bb

(b) Daily Average Crude Oil Production

Total worldwide daily average crude oil production in 2010 was 69.7 million barrel per day (Mb/d), along with the total refining capacity of 88.7 Mb/d and total consumption of the petroleum products was 80.3 Mb/d according to the OPEC Statistical Bulletin 2010/2011 Edition (3). The production of the OPEC countries is 42% of the worldwide daily production.

The countries (having daily average production greater than or nearest to 1 Mb/d) with daily production quantities (rounded to nearest tenth of Mb/d) are:

 

Russia                   9.8 Mb/dSaudi Arabia          8.2 Mb/d

USA                      5.5 Mb/d

China                    4.0 Mb/d

Iran                      3.5 Mb/d

Venezuela             2.9 Mb/d

Canada                 2.7 Mb/d

Mexico                  2.6 Mb/d

 

Iraq                     2.4 Mb/dKuwait                  2.3 Mb/d

UAE                     2.3 Mb/d

Brazil                   2.1 Mb/d

Nigeria                 2.0 Mb/d

Norway                1.8 Mb/d

Angola                 1.7 Mb/d

Libya                   1.5 Mb/d

 

Kazakhstan         1.3 Mb/dUK                      1.2 Mb/d

Algeria                1.2 Mb/d

Azerbaijan           1.0 Mb/d

Indonesia            0.8 Mb/d

Colombia            0.8 Mb/d

 

 

 

With the worldwide proven reserves and rate of production in 2010, existing proven oil reserves are sufficient to last for more than 60 years. The worldwide demand for oil is rising but it is expected to explore more reserve of oil in future.

Petroleum Facilities and Industries

(a) Petroleum Facilities

The petroleum facilities consist of the exploration, drilling, testing, field development, production, transportation, refining and distribution of the final products to the consumers. From starting an exploration, to discovery, drilling, testing, development, production and the delivery of crude oil from a new field, the entire process may take 3 to 10 years, depending on the complexity and volume of the reservoir. The offshore oil production generally takes longer than onshore. The unconventional production also takes longer time due to the complexity of the extraction process.  The petroleum production facilities are divided into three major categories: Upstream, Midstream and Downstream.

(1) Upstream:  The upstream category includes the operations involved in searching for underground or underwater oil fields and drilling exploratory wells, developing production facilities and operating the wells and produced crude oil. This category is also called ‘Exploration and Production’.

(2) Midstream: The midstream category processes and stores, markets and transports crude oil. This category is often included as an extension of either the upstream or downstream sector, depending on the source.

(3) Downstream: The downstream category includes refining crude to producing petroleum products, including other petrochemical plants and petroleum product distribution system.

(b) Petroleum Industries

There are many industries that are dealing with different parts of the petroleum production systems. Considering the area of functions, the oil industries are broadly categorized as Exploration and Operation, EPC (Engineering, Procurement and Construction) or EPCM (Engineering, Procurement and Construction Management) and Manufacturing.

(1) Exploration and Operation Company: The exploration and operation companies are those that directly or indirectly own, maintain and operate the oil production facilities including the reservoir, rigs, pipelines, refineries, and storage and distribution system. These companies also perform oil exploration, drilling and testing to check the existence of oil reserves. Some of the companies under this category are state-owned or NOC (National Oil Company), while some are IOC (International Oil Company). The major exploration and operation companies are Saudi Aramco, ExxonMobil, Shell, Qatar Petroleum, KOC (Kuwait Oil Company), ADNOC (Abu Dhabi National Oil Company), BP (British Petroleum), ConocoPhillips, Chevron, Occidental, Anadarco, Suncor, Syncrude, Petrobras, Total, Statoil, PetroChina, Petronas etc.

(2) EPC (or EPCM) Company: The EPC (Engineering, Procurement and Construction) companies work as consultants or contractors for the Exploration and Operation companies in projects of new development (green-field project) or major modification (brown-field project). EPC companies design the system, procure the materials and construct the facilities for the project undertaken by the exploration and operation companies.  Some of the EPC companies for the oil industries are Worley Parsons, KBR, AMEC, Aker Solutions, SNC-Lavalin, Bechtel, Jacob, Fluor, Technip, Mustang, Foster Wheeler, Kellogg, Halliburton, Samsung, Chiyoda, Toyo Engineering, Hyundai, Transocean etc.

(3) Manufacturing Company: The manufacturing companies are involved in manufacturing, marketing and distributing various equipment and accessories related to the oil production facilities, storage and distribution system. Since the equipment and accessories used in the oil industries are unique in terms of the safety and criticality of the system, the manufacturing industry manufactures the unique specialized products for oil industries. The manufacturing companies are ABB, GE Oil and Gas, FMC, Oceaneering, Baker Hughes, Cameron, National Oilwell Varco, Schlumberger, Weatherford, Reliance Motors, Flowserve, MODEC, Siemens Oil and Gas etc.

However, there is no distinctive difference between the functions of industries of one category to others. In many cases, the functions of a company of one category extend to the area of other category company, for example, a manufacturing company may provide EPC functions.

Conclusion

The production of petroleum oil is a complicated and complex process from its exploration to the distribution of final products. It is complicated because of various reasons including harsh location, high pressure, high temperature, large throughput and fire hazards related to facilities. The engineers working or intended to be working in the petroleum industries require specific qualification and expertise including a good knowledge of the various resources of oil, its reserves and the types of the industries involved. This article provides such a brief overview of petroleum oil resources for engineers and other professionals planning to build  a successful  career in these industries.

Notes:

(1) API Gravity: It is defined by the following formula:

API gravity in degree = 141.5 / (Specific Gravity at 60 degree F) – 131.5

The API gravity of crude whose SG is same as water at 60 degree F is 10.

(2) Ghawar field details, retrieved from http://www.gregcroft.com/ghawar.ivnu

(3) OPEC Statistical Bulletin 2010/2011 Edition, retrieved from http://www.opec.org/opec_web/static_files_project/media/downloads/publications/ASB2010_2011.pdf

(4) Quantity of Canada includes 170 Bb oil sands reserve.

Leave a Reply

You must be logged in to post a comment.