Operating Cycle

The oil cycle starts with the acquisition (through direct negotiations or by taking part in bids) of the legal right to perform prospecting.

The owner of the mining right is normally the State, with which the oil company stipulates a contract establishing the contracting parties' rights. It is necessary in particular to define: the area in which prospecting is to take place, the duration of the agreement, the minimum commitment in terms of work and expenditure, how the oil produced will be shared, and what dues the company will be required to pay.

In the years following the second world war, there was an evolution in oil prospecting contracts. Generally, the host State no longer limits itself to a concession for prospecting and exploitation of fields discovered, with corresponding receipt of royalties, but, almost always, directly participates in the production revenues. Frequent nowadays are production sharing contracts and service contracts, in which the oil company does not hold the mining rights, but acts as contractor for the host country's national company.

Exploration

Choice of the area for an exploration venture is assessed in the light of the possibilities and the probabilities of a discovery based on a certain number of fundamental geological elements (studies and surveys, knowledge of the area, evaluation of the mining risk) aside from considerations of an economic nature.

Exploring operations start with a geophysical survey which includes the operations necessary to identify any traps (rock reservoirs that permit the formation and storage of hydrocarbons). As a rule a seismic reflection survey is run, this being able to reconstruct the stratigraphy of the rocks forming the subsoil and in favorable cases to supply, after further processing, also information on their lithological structure and the nature of the fluids they contain.

It is the task of exploration wells to ascertain whether the trap contains hydrocarbons, their type and quantity, and to verify whether the geological model of the subsoil adopted is effectively as forecast. The requisite information is obtained from a direct examination of the rocks and fluids (cores and drilling muds), supplemented by data acquired indirectly from the logs that measure continuously the various physical parameters of the rocks through which the well runs.

In marine areas exploration wells are bored by drilling rigs mounted on mobile structures of self-lifting or semisubmersible type, or on drilling vessels.

Development

To recover the hydrocarbons the field has to be brought into production, by drilling an optimal number of production wells and installing the equipment necessary to free the gas and the oil of undesirable components (solid particles, water, salts, etc.) and to separate the liquid phase of the oil from the gaseous one.

Offshore development operations are more complex: the production wells are drilled from fixed platforms of various type (of steel or concrete, semisubmersible, anchored with cables, etc.), often of giant dimensions, and carried out at an angle so as to drain the largest possible area from a single position. In the last few years, to bring deep-water fields (more than 400 meters in depth) into production, submarine completion systems have been used, with wellheads and relevant commands, installed on the seabed and operated on the bed itself, or at a distance, from the surface.

Production

Once development has been completed, production activities begin. Through these the hydrocarbons are extracted from the reservoir, treated in the plants and then conveyed to the market through pipelines or by tankers.

During its productive life, which may even last decades, the field is constantly monitored, measures are carried out on the wells to optimize production and, in some cases, enhanced recovery projects are executed, with the injection of gas or water, to increase the quantity of hydrocarbons recoverable.

In some cases the natural gas produced is stored in underground reservoirs especially arranged for the purpose, and from here it is subsequently used to adjuste the quantity of gas to be supplied according to daily or seasonal consumption peaks, and to enable the production of the fields to be optimized.

Marketing

The oil is placed on the international market according to the opportunities of the moment and with set prices that vary from day to day.
The gas is generally sold with long-term agreements, in many cases signed in the development phase of the field.

IMAGES

Exploration and Production Operating Cycle

Download in high resolution | 0.15 Mb