After an exploration effort has successfully discovered petroleum within an acceptable range of reserve potential, the challenge becomes how to best optimize extraction of recoverable reserves in a manner yielding an acceptable economic return on total cash expenditures required over the life of the project. Surface and subsurface conditions of a discovery have considerable impact on the extraction process, its related costs, and ultimate project success or failure. Technical success is one thing; economic success is another. Real world experience has shown that economic success is by far the more difficult accomplishment, as it is dependent on factors well beyond the means of science and technology.
Petroleum reserves exist as oil or gas within trapping sections of reservoir rock formed by structural and or stratigraphic geologic features. Water is the predominant fluid found in the permeability and porosity of subsurface strata within the earth's crust. Both oil and gas have a low specific gravity relative to water and will thus, float through the more porous sections of reservoir rock from their source area to the surface unless restrained by a trap. Typically, reservoir rock consists of sand, sandstone, limestone, or dolomite. A trap is a reservoir that is overlain by a dense cap rock or a zone of very low or no porosity that restrains migrating hydrocarbon. Petroleum bearing reservoirs can exist from surface seeps to subsurface depths over 4 mi (6.4 km) below sea level. Reservoirs vary from being quite small to covering several thousands of acres, and range in thickness from a few inches to hundreds of feet or more.
The process of evaluating how to best optimize extraction of recoverable reserves begins with a development plan. The development plan considers all available geologic and engineering data to make an initial estimate of reserves in-place, to project recovery efficiencies and optimal recoverable reserve levels under various producing scenarios, and to evaluate development plan alternatives. Development alternatives will include the number of wells to be drilled and completed for production or injection, well spacing and pattern, processing facility requirements, product transportation options, cost projections, project schedules, depletion plans, operational programs, and logistics and economic studies.
In general, petroleum is extracted by drilling wells from an appropriate surface configuration into the hydrocarbon-bearing reservoir or reservoirs. Wells are designed to contain and control all fluid flow at all times throughout drilling and producing operations. The number of wells required is dependent on a combination of technical and economic factors used to determine the most likely range of recoverable reserves relative to a range of potential investment alternatives.
The complexity and cost of drilling wells and installing all necessary equipment to produce reserves can vary significantly. The development of an onshore shallow gas reservoir located among other established fields may be comparatively low cost and nominally complex. A deep oil or gas reservoir located in 4,000+ ft (1,219+ m) of water depth located miles away from other existing producing fields will push the limits of emerging technology at extreme costs. Individual wells in deepwater can and have cost in excess of 50 million dollars to drill, complete, and connect to a producing system. Onshore developments may permit the phasing of facility investments as wells are drilled and production established to minimize economic risk. However, offshore projects may require 65% or more of the total planned investments to be made before production start up, and impose significant economic risk.
Once production begins, the performance of each well and reservoir is monitored and a variety of engineering techniques are used to progressively refine reserve recovery estimates over the producing life of the field. The total recoverable reserves are not known with complete certainty until the field has produced to depletion or its economic limit and abandonment.
The ultimate recovery of original in-place volumes may be as high as one-third for oil and 80% or more for gas. There are three phases of recovering reserves. Primary recovery occurs as wells produce because of natural energy from expansion of gas and water within the producing formation, pushing fluids into the well bore and lifting them to the surface. Secondary recovery occurs as artificial energy is applied to lift fluids to surface. This may be accomplished by injecting gas down a hole to lift fluids to the surface, installation of a sub-surface pump, or injecting gas or water into the formation itself. Secondary recovery is done when well, reservoir, facility, and economic conditions permit. Tertiary recovery occurs when means of increasing fluid mobility in oil reservoirs within the reservoir are introduced in addition to secondary techniques. This may be accomplished by introducing additional heat into the formation to lower the viscosity (thin the oil) and improve its ability to flow to the well bore. Heat may be introduced by either injecting steam in a "steam flood" or injecting oxygen to enable the ignition and combustion of oil within the reservoir in a "fire flood." Such methods are undertaken only in a few unique situations where technical, environmental and economic conditions permit. Most gas reserves are produced during the primary recovery phase. Secondary recovery has significantly contributed to increasing oil recoveries.
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