Petroleum 101 - Energy Value Chain - Steve

The correct answer is Upstream, Midstream, and Downstream. These three components make up the oilfield value chain. Upstream refers to the exploration and production of oil and gas, including activities such as drilling and well completion. Midstream involves the transportation, storage, and processing of oil and gas, including pipelines and terminals. Downstream involves the refining, marketing, and distribution of oil and gas products to end consumers. These three components work together to ensure the efficient and effective extraction, processing, and delivery of oil and gas resources.

The correct answer is Midstream. The midstream sector is responsible for the transportation and processing of crude oil, natural gas, and gas liquids. It involves the infrastructure and facilities that gather, store, and distribute these resources from production sites to refineries, processing plants, and ultimately to the retail market. This sector plays a crucial role in ensuring the efficient and safe movement of hydrocarbons throughout the supply chain. OPEC, on the other hand, stands for the Organization of the Petroleum Exporting Countries, which is an intergovernmental organization focused on coordinating and regulating oil production among its member countries. Hydrocarbons is a general term used to describe organic compounds made up of hydrogen and carbon atoms, including crude oil, natural gas, and gas liquids.

A NOC refers to National Oil Companies, which are state-owned entities responsible for the exploration, production, and distribution of oil and gas resources within a country. These companies are typically established to ensure national control over oil and gas reserves and to generate revenue for the country. Examples of NOCs include Saudi Aramco, Gazprom, and Petrobras.

Drilling contractors are responsible for drilling wells and supplying operators with the necessary equipment and personnel. They play a crucial role in the oil and gas industry by ensuring that drilling operations are carried out efficiently and safely. These contractors have the expertise and resources to construct drilling rigs and platforms, as well as to produce the hydrocarbon. Their main focus is on the technical aspects of drilling, and they work closely with operators to meet their drilling requirements. Additionally, they are not involved in drawing out contracts between countries and companies, as this task is typically handled by legal and business professionals.

In unconventional drilling, it is common to encounter low permeability. This means that the rock formations being drilled have a low ability to allow fluids, such as oil or gas, to flow through them. This can make it challenging to extract these resources efficiently. High permeability, on the other hand, would indicate that the rock formations have a greater ability to allow fluid flow, which is typically not the case in unconventional drilling.

The companies Statoil, Exxon, and BP can be categorized as operators because they are involved in the exploration, production, and distribution of oil and gas. As operators, they have the expertise and resources to manage and operate oil and gas fields, including drilling wells, extracting hydrocarbons, and transporting them to refineries or customers. Technip, FMC, NOV, Halliburton, and Schlumberger are not operators, but rather provide services and equipment to the oil and gas industry.

The measurement of how easily a fluid flows through a permeable medium is measured in Darcy. Darcy is a unit used to quantify the permeability of a medium, which refers to the ability of a fluid to flow through it. It is commonly used in fields such as hydrogeology and petroleum engineering to assess the flow characteristics of porous media. Kelvin is a unit of temperature, psi is a unit of pressure, and Smith is not a recognized unit of measurement in this context.

Granite is not one of the major rock types because it is a specific type of igneous rock. The major rock types are igneous, sedimentary, and metamorphic. Igneous rocks are formed from the solidification of molten material, sedimentary rocks are formed from the accumulation and lithification of sediments, and metamorphic rocks are formed from the alteration of pre-existing rocks due to high temperature and pressure. Granite falls under the category of igneous rocks, specifically a coarse-grained intrusive rock.

Conventional reservoirs typically have a trap and seal. This means that there is a geological formation that traps the hydrocarbons, such as a structural or stratigraphic trap, and a seal that prevents the hydrocarbons from escaping, such as an impermeable layer of rock or a fault. This combination of trap and seal allows for the accumulation and storage of hydrocarbons in the reservoir. In contrast, unconventional reservoirs, such as shale or tight gas formations, may have high permeability but lack a trap and seal, making it more difficult to extract the hydrocarbons.

An independent oil company is typically smaller and not one of the major players in the industry. They focus on a specific area of the oil value chain, such as exploration, production, or refining, rather than being involved in all aspects. This allows them to specialize and compete in a specific niche. Therefore, the statement that an independent is a smaller/non-major oil company involved in a single branch of the value chain is true.

NOV offers most of its products and services in the upstream sector.

Oil is most often located in sedimentary rock because sedimentary rocks are formed from the accumulation and consolidation of sediments, which can include organic material such as dead plants and animals. Over millions of years, the pressure and heat within the Earth transform these organic materials into hydrocarbons, which make up oil and natural gas. Sedimentary rocks, with their porous nature, provide the ideal conditions for the accumulation and storage of oil. Igneous and metamorphic rocks are formed through different processes and do not typically contain the necessary conditions for oil formation and storage. Permeable rock, while important for the migration and extraction of oil, is not a specific type of rock but rather a characteristic of certain sedimentary rocks.

Fracking is not used to locate "oil fields". Fracking, or hydraulic fracturing, is a method used to extract oil and gas from underground rock formations, but it is not used to locate the presence of oil fields. Seismic, gravity, and magnetic methods are commonly used to locate and identify potential oil fields by analyzing the geological features and characteristics of the subsurface.

Technically Recoverable Reserves refers to the amount of oil or gas that can be extracted from a reservoir using existing technology and under current economic conditions. It does not represent the actual amount of oil present in the reservoir. Therefore, the statement "Technically Recoverable Reserves is the amount of oil in the reservoir" is false.

STOOIP stands for Stock Tank Oil Originally In Place. This term is used in the oil and gas industry to refer to the total amount of oil present in a reservoir before any production has taken place. It represents the estimated volume of oil that can potentially be recovered from the reservoir.

Gamma is used to identify shale. Gamma ray logging is a common technique in the oil and gas industry to measure the natural gamma radiation emitted by rocks. Shale typically contains higher levels of gamma radiation compared to other rock types. By analyzing the gamma ray measurements, geologists and engineers can determine the presence and thickness of shale formations, which is crucial for evaluating the potential for oil and gas reservoirs.

A concession agreement is the correct answer because it is the most common type of petroleum contract. In a concession agreement, the government grants a company the right to explore and produce petroleum resources in a specific area. The company bears the financial and technical risks associated with exploration and production, and in return, it pays royalties or other forms of compensation to the government. This type of contract is widely used in the petroleum industry to attract investment and promote exploration and production activities.

The term "Proven" refers to reserves that have been confirmed to exist and can be recovered using current technology. This means that there is sufficient evidence to support the existence of these reserves and the technology is already available to extract them. The other categories, "Probable" and "Total", may include reserves that are expected to be recoverable in the future but are not yet confirmed or may require further technological advancements. Therefore, the correct answer is "Proven" because it specifically relates to reserves that can be recovered using currently available technology.

Resistivity is used to measure the ability of a material to resist the flow of electric current. In the context of the given options, it is used to determine the resistivity of oil and water. This information is important in various industries, such as oil and gas exploration, as it helps in identifying and characterizing different subsurface formations and fluids. By measuring the resistivity of oil and water, engineers and geologists can assess the potential productivity and quality of oil reservoirs, as well as understand the movement and distribution of fluids in underground formations.

Compensated Neutron measures the amount of hydrogen present in a substance. The technique involves bombarding the substance with neutrons and measuring the number of neutrons that are slowed down or absorbed by the hydrogen atoms. By analyzing the response of the neutrons, the instrument can provide information about the hydrogen content, which is useful in various industries such as oil and gas exploration, where it can help determine the presence of hydrocarbons and evaluate reservoir properties.

The correct answer is "Total" because it represents the sum of all reserves, including both proved and probable reserves. The term "Total" encompasses all potential reserves that are important to the U.S. SEC and other business entities. It provides a comprehensive measure of the available resources and helps in assessing the overall potential of an entity or a country in terms of reserves.