The oil and gas industry is massive. Oil and gas equipment suppliers support oil and gas exploration and extraction companies by providing them with the necessary equipment to extract resources from the Earth’s surface more efficiently.
Statistics show the oil and gas industry is one of the most valuable sectors globally, generating over $5 trillion in global revenue in 2022. The oil and gas sector is valuable because the world relies on fossil fuels to power it. Research shows that fossil fuels, including coal, oil, and natural gas, contribute to 80 percent of the world’s energy today.
While there has been an increasing shift to renewable energy solutions prompted by rising environmental awareness, the reality is that it’ll take the world decades before it becomes fully carbon-free. As a result, oil and gas extraction remains highly valuable right now.
The International Energy Agency released a new report titled Net Zero by 2050, which states that the world could reach zero emissions by 2050. However, achieving net zero emissions by that time would require big changes, including totally transforming current energy systems.
As a result, the oil and gas industry remains highly valuable today. Human society thrives on electricity because every modern convenience is powered by it, and producing enough electricity through renewable energy isn’t currently possible because society doesn’t have the infrastructure to do it.
Extracting oil and gas from the Earth’s subsurface is challenging. It’s an intricate process with multiple steps and is powered by some of the most expensive equipment in the world. In addition, crews responsible for extracting oil and gas from the Earth must be exceptionally well-trained to ensure minimal casualties.
This post will provide a detailed insight into oil and gas extraction, detailing the several stages of the process. It’ll also provide a glimpse into how oil and gas are extracted using different methods and how technology facilitates the process.
Classifying the Oil and Gas Industry’s Processes
The oil and gas industry’s processes can be classified into four categories, including the following:
Exploration
The exploration stage requires assessing rock formations to determine if they hold oil or natural gas deposits. It also involves exploratory drilling and geophysical prospecting. It’s no secret that oil and gas reserves are often centered in some locations. As a result, some countries have far greater oil or gas reserves than others because they have more oil and gas deposits in their rock formations. Finding these deposits is necessary before proceeding to the next stage.
Well Development
The well development stage follows exploration. Once oil or gas reserves have been discovered in an area where extraction is possible and economical, oil and gas extraction companies start constructing one or more wells to extract these deposits. Constructing wells from scratch requires a process called spudding. Well-completion occurs if oil and gas companies find hydrocarbons in sufficient quantities.
Production
Once hydrocarbons are found, oil and gas extraction companies must move on to the production stage. Production refers to extracting hydrocarbons and separating the mixture, which involves gas, water, solids, and liquid hydrocarbons. Oil and gas extraction companies must separate unsellable constituents from liquid hydrocarbons and gas. Production sites generally handle crude oil obtained from more than one well.
The typical production process for crude oil requires refining it at refineries. On the other hand, natural gas requires processing to remove impurities at the field or in a natural gas processing facility.
Site Abandonment
Site abandonment occurs once all the deposits have been extracted or if deposits are no longer economically viable to extract. It involves plugging the wells. Furthermore, oil and gas extraction companies must restore the site after finishing production.
The Seven Steps of Natural Gas and Oil Extraction
As previously mentioned, extracting oil and natural gas from the Earth’s surface isn’t straightforward. Instead, it’s a complex and intricate process with several steps. Here are the seven steps of natural gas and oil extraction. They include:
Rig Site Preparation
Preparing the rig site is essential, particularly for onshore drilling. Oil and gas exploration companies must build aboveground infrastructure, including pads and access roads. Doing so helps prepare the land area for the next part of the process—drilling. In addition, oil and gas extraction companies must also plan according to state and local laws.
Drilling
Drilling is a complex but crucial part of oil and gas extraction. First, oil and gas extraction companies must bring the drill rig to the location and assemble it. Then, they have to develop the necessary infrastructure to drill beneath the ground. Oil and gas deposits are usually found miles below the surface, and drills need a path to reach these deposits.
Oil and gas exploration companies typically drill a surface hole 100 feet below the deepest-known aquifer. Then, they’ll use steel casing to cement the surface hole, ensuring precious water aquifers aren’t polluted. Once a surface hole is drilled, it’s time to drill a long hole, which extends over 1000 feet below the surface, reaching the area where oil and gas deposits are trapped. Once the long hole reaches that part, it’s directionally steered to turn horizontal, and drilling resumes in that direction for another mile or two.
Traditionally, oil and gas wells are vertically drilled. However, horizontal drilling has become more prevalent recently because it yields a higher output. A study shows that horizontal drilling can be four times the product of vertically drilled wells, while the cost of building horizontal wells is only twice that of vertically drilled wells. The rise of horizontal drilling can be attributed to advanced drilling methods made possible by technological advancements.
Cementing and Testing
Once the drill pipe reaches the distance, oil and gas extraction companies remove it and replace it with a steel pipe, pushing it to the bottom. Then, this well casing is cemented. Oil and gas extraction companies will perform multiple tests to ensure the pipe’s impermeability before the production process starts.
Well Completion
Well completion is also necessary before oil and gas exploration companies can start tapping into oil and natural gas reserves. They’ll typically lower a perforating gun into the ground and fire it into the deepest part of the well’s rock layer. Doing so creates more holes that connect the rock formations with oil and gas reserves to the wellhead.
Fracking
Well-completion opens the first stage of the well, allowing drillers to unlock the oil and gas reserves inside the rock formations. Monitoring pressure is crucial in real-time. As a result, drillers will use specialized instruments to track data from the well. In addition, they’ll also pump fracking fluid—consisting of 99.5 percent water and sand and 0.5 percent chemicals—into the perforating holes. Doing so creates cracks within the shale rocks, allowing gas and oil to be extracted.
Oil and gas exploration companies will repeat this process until the wellbore’s lateral length is completely fracked.
Production and Fracking Fluid Recycling
After fracking is finished, production begins. Oil and gas will flow up the well, and drillers will recover and recycle the fracking fluid. They’ll also use it in other fracking operations.
Well Abandonment and Land Restoration
Well abandonment occurs after all the oil and natural gas reserves have been extracted from the surface. Oil and gas exploration companies will plug the well permanently and return the land to how it used to be before drilling operations began. Then, the land can be used for other activities with little evidence that a welling operation existed there.
How Technology is Impacting Oil and Gas Extraction
As previously mentioned, technology has significantly impacted oil and gas extraction. Most oil and gas wells used to be vertically drilled before. However, technological advancements have made horizontal drilling more efficient and effective, allowing operators to save time, reduce operational costs, and minimize environmental impact.
Let’s explore some advanced drilling methods that have become possible because of technological advancements. They include:
Horizontal Drilling
Incidentally, horizontal drilling begins with a vertical well. Once a vertical well reaches its intended target, drillers turn the drill horizontally within the rock’s reservoir to create a more open hole. Horizontal legs often extend for a mile or two. The advantage of horizontal drilling is it allows oil and gas extraction companies to drain the oil and natural gas faster. Horizontal drilling has become prevalent recently because drillers can use it in situations where conventional drilling wouldn’t be possible. Likewise, it minimizes environmental impact and surface disturbance because fewer wells are required to reach the reservoir.
Multilateral Drilling
Multilateral drilling becomes essential when oil and natural gas deposits are in separate layers underground. It lets drillers deviate from the main well to access reserves in different layers, increasing production quantity from a single well.
Extended Reach Drilling
Extended reach drilling proves beneficial when oil and gas reserves are in surface areas where vertical wells cannot be drilled. Likewise, this drilling technique is useful for extracting oil and gas in underdeveloped or environmentally sensitive locations. This drilling technique allows oil and gas exploration companies to reach deposits far from the rig. Extended reach drilling also reduces surface impact. In addition, it lets wells reach out over five miles from the surface location.
Complex Path Drilling
Complex path drilling is cost-effective and reduces environmental impact because it helps oil and gas exploration companies reduce the number of wells needed. This drilling technique allows multiple twists and turns, ensuring drillers can target multiple reserves from a single well location.
The Benefits of Advanced Drilling Techniques
Here are some benefits of advanced drilling techniques. They include:
- Advanced drilling technologies enhance oil production. For instance, horizontal drilling allows oil and gas extraction companies to extract four times more yield than vertical drilling.
- Advanced drilling technologies also intersect natural fractures within the earth’s surface, that’s not possible with vertical drilling techniques.
- New drilling techniques also delay the onset of gas or water coning. Water or gas coning refers to the upward movement of water into a production well’s perforations. Likewise, it can also refer to gas moving downward into the perforations. These delays help extract more oil or gas.
- Advanced drilling techniques allow oil and gas extraction companies to extract more reserves from thin reservoirs.
Improving Processes to Reduce Environmental Impact
It’s no secret that new technologies and techniques can help reduce the impact of drilling on the environment. Here’s how:
Consolidating Facilities
Developing wells often require specific equipment, facilities, personnel, and processes. However, oil and gas exploration companies have realized that consolidating these can help reduce the overall environmental impact in the field. Here’s how consolidation works:
- Multiple wells: Many oil and gas production companies drill various wells from a single pad. Doing so is beneficial in various ways. For starters, it reduces infrastructure needs. It also eliminates disturbance in environmentally sensitive areas. Furthermore, it lowers drilling and completion time, meaning lower rig rental costs. Lastly, it also enhances hydrocarbon recovery efficiency.
- Corridors: Consolidating roads, pipes, and transmission lines in common corridors is also beneficial because it lowers landscape fragmentation and minimizes disturbance.
- Staging and Storage: Centralized staging and storage are also beneficial because it reduces the number of storage tanks needed for every well site while lowering the well pad requirement.
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