Chapter 2 - Oil Overview Flashcards Preview

The Oil & Gas Industry > Chapter 2 - Oil Overview > Flashcards

Flashcards in Chapter 2 - Oil Overview Deck (37):

What does Petroleum mostly consist of?

Petroleum consists mostly of hydrocarbon molecules, themselves made up of various combinations of hydrogen and carbon atoms.


What is the simplest hydrocarbon molecule?

The simplest hydrocarbon molecule—one carbon atom bonded to four hydrogen atoms (CH4 )—is called methane and is the primary component of natural gas.


Crude old is a mixture of a very large number of hydrocarbons with arcane names such as? What is a distinguishing characteristic?

Alkanes (or paraffins) Cycloalkanes (or naphthenes) Aromatic hydrocarbons Asphaltenes The number of carbon atoms they contain


The type, variety, and structure of the hydrocarbon molecules in crude oil determine its physical and chemical properties, such as?

Color, thickness (viscosity),and boiling point.


The petroleum industry uses three major parameters to classify crude oil, what are they?

• Geographic location in which it is produced (which affects the 
cost of transporting the crude to a refinery). 
 • API gravity (an oil industry measure of density;API is the American Petroleum Institute). Light crude oil has relatively low density; heavy crude has high density. Oil with an
API gravity (expressed as oAPI) below 10.0 is classified 
as extraheavy. 
 • Sulfur content. Crude is generally called sweet if it contains 
relatively little sulfur or sour if it contains substantial amounts. 


Why is light crude oil more desirable than heavy oil?

Light crude oil is more desirable than heavy oil because it produces a higher yield of gasoline, a highly valued petroleum product for transportation use. 


Why does sweet oil command a higher price than sour oil?

Sweet oil commands a higher price than sour oil because it has fewer environmental problems and requires less refining to meet sulfur-content standards imposed by buyers. 


Define Assay Analysis.

Each crude oil has unique molecular characteristics that are evaluated by a process called assay analysis, carried out in a laboratory. 


Define benchmark crude.

Oil from an area in which its molecular characteristics have been determined is used as a pricing reference, or benchmark, in global oil markets. 


Define West Texas Intermediate

West Texas Intermediate (WTI), a very high quality sweet, light oil delivered at Cushing, Oklahoma, for North American oil. Cushing is the delivery point for WTI traded on the New York Mercantile Exchange (NYMEX), the most widely traded oil futures contracts in the world.


Define Brent Blend.

Brent Blend, made up of 15 oils from fields in the Brent and Ninian systems in the East Shetland Basin of the North Sea. Oil production from Europe and Africa, as well as Middle Eastern oil flowing to the West, tends to be priced using this benchmark. 


Define Dubai-Oman.

Dubai-Oman, used as benchmark for Middle East sour crude flowing to the Asia-Pacific region. 


Define OPEC Reference Basket.

OPEC Reference Basket, a weighted average of oils and blends from the 12 nations that make up the Organization of the Petroleum Exporting Countries. 


Define Midway-Sunset Heavy.

Midway-Sunset Heavy, by which heavy oil in California is priced. Midway-Sunset is a large oil field in Kern County, California. 


Define Unconventional Crude Oil.

Several types of oil resources are called unconventional, to distinguish them from oil that can be extracted using traditional oil field methods. These include tar sands (also called oil sands) and shale oil.


Define Shale Oil.

Another unconventional resource, shale oil is found in shale source rock that has not been exposed to heat or pressure long enough to convert trapped hydrocarbons into crude oil.


Define marls.

According to the U.S. Department of Energy (DOE), oil shales are not technically shales and do not really contain oil. Rather, they are usually relatively hard rocks called marls—composed primarily of clay and calcium carbonate— containing the waxy substance called kerogen.


Why is Shale useful.

The trapped kerogen can be converted into crude oil using heat and pressure to simulate natural processes.


Where is the largest Shale formation?

Oil shales are found in many countries, but the United States has the world’s largest deposits. These are located chiefly in the Green River formation, which covers portions of Colorado, Utah, and Wyoming.2 DOE has estimated that as much as 800 billion barrels of oil are recoverable from that formation.


Combined, how much heavy oil does Canada and Venezuela contain?

Combined, Canada and Venezuela contain an estimated 3.6 trillion barrels (570 billion cubic meters) of bitumen and extraheavy oil.


Define resources.

Resources are hydrocarbons that may or may not be produced in the future. An initial estimate of the magnitude of the resource in a yet-to-be- drilled prospect may be made.


Define appraisal.

However, appraisal (by drilling delineation wells or acquiring more seismic data, as described in chap. 4) is needed to confirm the size of a field and pave the way for development and production.


Define Oil in Place.

The total estimated amount of oil in a reservoir, including both producible and nonproducible oil, is called oil in place (OIP)


Define recovery factor.

The ratio of producible oil reserves to total OIP for a given field is often referred to as the recovery factor.


Define Proved Reserves.

Proved reserves.These are considered reasonably certain to be producible using current technology at current prices, with current commercial terms and government consent. This category is also sometimes called 1P, but others in the industry refer to it as P90—that is, having a 90% certainty of being produced.


Define Probable reserves

Probable reserves.These are considered to have a reasonably probable chance of being produced using current or likely technology at current prices, with current commercial terms and government consent.This category is sometimes called P50— that is, having a 50% certainty of being produced—and is also known in the industry as 2P, meaning “proved plus probable.”


Define Possible Reserves.

Possible reserves.These have a chance of being developed under favorable circumstances. Some industry specialists refer to this as P10—that is, having a 10% certainty of being produced—while others use the term 3P, for “proved plus probable plus possible.”


Define reserve growth.

Experience has shown that initial estimates of the size of newly discovered oil fields are usually too low.The term reserve growth refers to the increases in estimated ultimate recovery that occur as oil fields are developed and produced.


Define barrels of oil equivalent (boe)

Energy companies and others sometimes use the parameter barrels of oil equivalent (boe) as a way to report oil plus gas reserves or production as a single figure.


Oil and gas from various sources release different amounts of energy when burned, but SPE provides the following information, based on typical heating values

Burning one barrel (42 gallons) of oil releases 5.8 million British thermal units (Btu). One Btu is the energy needed to raise the temperature of one pound of water one degree Fahrenheit at one atmosphere of pressure.


Oil and gas from various sources release different amounts of energy when burned, but SPE provides the following information, based on typical heating values. RELATED TO GAS.

A typical figure for the heating value of natural gas is 1,025 Btu per cubic foot, according to SPE.Therefore, burning 5,658.53 cubic feet of gas would yield an equivalent amount of energy to burning one barrel of oil (5.8 million divided by 1,025). A company with gas reserves of 5,658.53 cubic feet and oil reserves of 10 barrels could then report its total reserves as 11 boe.


Define refinery gain.

According to EIA, a 42-gallon barrel of crude oil typically yields 44 gallons of petroleum products (owing to a phenomenon called refinery gain).


Products made in the U. S. from a barrel of crude oil.


Describe the global oil consumption 1995-2009.


Describe the U. S. petroleum consumption by sector: 1995-2009


How does the outlook for U.S. primary energy use by fuel look for 1995-2035?