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Fundamentals of Upstream Oil and Gas

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Language: en

00:00:04.669
hi and welcome to aisle 101 the podcast
00:00:08.450 00:00:08.460 my name is Doug Stetzer and I'm content
00:00:11.450 00:00:11.460 and community manager for ekt
00:00:13.400 00:00:13.410 Interactive this first episode of our
00:00:16.849 00:00:16.859 microbes to market coverage will be
00:00:18.950 00:00:18.960 discussing the upstream segment of the
00:00:21.140 00:00:21.150 oil and gas industry this content was
00:00:24.950 00:00:24.960 taken from our fundamentals of upstream
00:00:26.600 00:00:26.610 ebook which is available in the free
00:00:29.180 00:00:29.190 members content library at WWE KT
00:00:33.860 00:00:33.870 interactive comm this upstream overview
00:00:37.819 00:00:37.829 includes segments on exploration and
00:00:40.010 00:00:40.020 production or EMP drilling and
00:00:43.010 00:00:43.020 unconventional techniques upstream
00:00:45.830 00:00:45.840 business characteristics important
00:00:48.049 00:00:48.059 players and participants in upstream and
00:00:50.170 00:00:50.180 finally some discussion on an important
00:00:52.940 00:00:52.950 and often misunderstood segment known as
00:00:55.490 00:00:55.500 oilfield services so what is upstream
00:01:00.459 00:01:00.469 most oil and gas companies are organized
00:01:03.440 00:01:03.450 according to business segments assets or
00:01:06.050 00:01:06.060 function the upstream segment of oil and
00:01:10.640 00:01:10.650 gas is also known as exploration and
00:01:13.190 00:01:13.200 production or EMP because it encompasses
00:01:16.100 00:01:16.110 activities related to searching for
00:01:18.520 00:01:18.530 recovering and producing crude oil and
00:01:21.469 00:01:21.479 natural gas upstream is all about wells
00:01:25.270 00:01:25.280 where to locate them how deep and how
00:01:28.490 00:01:28.500 far to drill them and how to design
00:01:31.300 00:01:31.310 construct operate and manage them to
00:01:35.120 00:01:35.130 deliver the greatest possible return on
00:01:36.950 00:01:36.960 investment with the lightest safest and
00:01:39.890 00:01:39.900 smallest operational footprint in fact
00:01:43.310 00:01:43.320 the EMP sector should probably be called
00:01:46.160 00:01:46.170 the EDP sector because you can't find
00:01:48.770 00:01:48.780 oil if you don't drill wells let's start
00:01:53.090 00:01:53.100 with exploration which involves the
00:01:55.190 00:01:55.200 operator obtaining a lease and
00:01:56.870 00:01:56.880 permission to drill from the owner of
00:01:59.149 00:01:59.159 onshore or offshore acreage thought to
00:02:02.420 00:02:02.430 contain oil or gas then the operator
00:02:06.590 00:02:06.600 must conduct geological and geophysical
00:02:08.869 00:02:08.879 surveys to select the first well site to
00:02:12.769 00:02:12.779 explore for and
00:02:14.220 00:02:14.230 hopefully find economic accumulations of
00:02:17.160 00:02:17.170 oil or gas this well is often called a
00:02:20.490 00:02:20.500 wildcat well drilling is physically
00:02:24.270 00:02:24.280 creating the bore hole in the ground
00:02:25.830 00:02:25.840 that will eventually become a productive
00:02:27.869 00:02:27.879 oil or gas well this work is typically
00:02:30.809 00:02:30.819 done by rig contractors and service
00:02:32.759 00:02:32.769 companies in the oilfield services
00:02:35.130 00:02:35.140 business sector on a well site there can
00:02:38.789 00:02:38.799 be as many as 30 to 40 different service
00:02:41.339 00:02:41.349 contractors providing expertise to the
00:02:43.800 00:02:43.810 operator wells can be relatively simple
00:02:47.520 00:02:47.530 or unbelievably complex wells can be
00:02:50.580 00:02:50.590 totally vertical for miles or both deep
00:02:53.039 00:02:53.049 and horizontal there are also highly
00:02:55.949 00:02:55.959 complex J and s configurations with
00:02:59.069 00:02:59.079 numerous branches or laterals emanating
00:03:02.369 00:03:02.379 from the original or mother hole these
00:03:05.130 00:03:05.140 are called deviated wells
00:03:07.099 00:03:07.109 now let's discuss production where
00:03:10.110 00:03:10.120 reserves are converted to cash by
00:03:12.420 00:03:12.430 maximizing the recovery of hydrocarbons
00:03:14.759 00:03:14.769 from subsurface reservoirs essentially
00:03:17.930 00:03:17.940 production is efficiently bringing the
00:03:20.370 00:03:20.380 hydrocarbons to the surface and treating
00:03:22.800 00:03:22.810 them as needed to make them marketable
00:03:24.949 00:03:24.959 so that's the basics of EMP we will
00:03:28.470 00:03:28.480 drill deeper into each of these
00:03:29.640 00:03:29.650 operations in the complete oil one
00:03:31.620 00:03:31.630 course at a later date now let's talk
00:03:34.680 00:03:34.690 about unconventional resources clearly
00:03:37.110 00:03:37.120 the hottest topic in oil and gas over
00:03:38.759 00:03:38.769 the last decade unconventional resources
00:03:41.849 00:03:41.859 are defined as any resource extracted or
00:03:45.210 00:03:45.220 produced by any method other than the
00:03:48.180 00:03:48.190 traditional vertical or slightly
00:03:50.460 00:03:50.470 deviated well three main sources of
00:03:53.490 00:03:53.500 technological breakthroughs that have
00:03:55.289 00:03:55.299 made unconventional developments
00:03:56.940 00:03:56.950 profitable include horizontal drilling
00:03:59.539 00:03:59.549 hydraulic fracturing and subsea
00:04:02.190 00:04:02.200 engineering especially deep water
00:04:04.740 00:04:04.750 production horizontal drilling is not
00:04:07.349 00:04:07.359 new but the technology has matured
00:04:09.599 00:04:09.609 quickly horizontal wells reduce the size
00:04:13.439 00:04:13.449 of the drill pad footprint and enable
00:04:15.720 00:04:15.730 production along the length of a
00:04:17.219 00:04:17.229 reservoir today some horizontal sections
00:04:20.819 00:04:20.829 can exceed seven miles hydraulic
00:04:23.880 00:04:23.890 fracturing or fracking is the process of
00:04:26.670 00:04:26.680 injecting water
00:04:27.940 00:04:27.950 chemicals and sand into wells under very
00:04:30.820 00:04:30.830 high pressures the resulting fractures
00:04:33.520 00:04:33.530 in surrounding rock formations allow for
00:04:36.070 00:04:36.080 microscopic hydrocarbons to be recovered
00:04:39.000 00:04:39.010 but even with all the talk and public
00:04:41.650 00:04:41.660 awareness of shale and fracking some of
00:04:44.650 00:04:44.660 the largest oil and gas discoveries
00:04:46.510 00:04:46.520 continued to be found in the deep water
00:04:48.940 00:04:48.950 of the coast of Africa South America and
00:04:51.580 00:04:51.590 the Gulf of Mexico recently a very large
00:04:55.150 00:04:55.160 discovery was made in the Mediterranean
00:04:56.860 00:04:56.870 off of the coast of Egypt deep water
00:05:00.760 00:05:00.770 subsea engineering innovations have made
00:05:03.550 00:05:03.560 production economic from water depths
00:05:05.950 00:05:05.960 exceeding 10,000 feet
00:05:10.420 00:05:10.430 this podcast episode is brought to you
00:05:12.940 00:05:12.950 by e Katie Interactive's oil 101 a free
00:05:16.600 00:05:16.610 introduction to oil and gas within this
00:05:19.030 00:05:19.040 free members only content area you'll
00:05:21.340 00:05:21.350 find ebooks on oil and gas industry
00:05:23.410 00:05:23.420 fundamentals relevant articles on key
00:05:26.020 00:05:26.030 oil and gas topics and a growing body of
00:05:28.660 00:05:28.670 digital learning content claim your free
00:05:31.660 00:05:31.670 membership and join the oil 101 learning
00:05:33.970 00:05:33.980 community at WWE Katie Interactive calm
00:05:38.290 00:05:38.300 today it is important to note that there
00:05:44.590 00:05:44.600 are four key business characteristics of
00:05:47.080 00:05:47.090 upstream it is a high-risk high-return
00:05:50.050 00:05:50.060 segment it is highly regulated is
00:05:53.010 00:05:53.020 impacted by global politics and it is
00:05:55.990 00:05:56.000 very technology intensive the upstream
00:05:59.860 00:05:59.870 industry is arguably the most complex of
00:06:02.350 00:06:02.360 all oil and gas business sectors there
00:06:05.080 00:06:05.090 are many risks and unknowns in the
00:06:06.850 00:06:06.860 exploration process often hundreds of
00:06:10.450 00:06:10.460 millions of dollars and many years are
00:06:12.490 00:06:12.500 spent before an oil and gas field
00:06:14.050 00:06:14.060 becomes productive especially offshore
00:06:16.920 00:06:16.930 the upstream segment is regulated in
00:06:20.050 00:06:20.060 terms of production access to reserves
00:06:22.740 00:06:22.750 pricing and Taxation and more and more
00:06:25.990 00:06:26.000 stringent environmental regulations
00:06:29.220 00:06:29.230 upstream is a global business politics
00:06:32.350 00:06:32.360 between producing nations and major oil
00:06:34.450 00:06:34.460 companies can be very complicated
00:06:36.630 00:06:36.640 and finally as we've seen in the last
00:06:39.520 00:06:39.530 decade with developments of
00:06:40.990 00:06:41.000 unconventional prospects upstream is
00:06:43.690 00:06:43.700 extremely technology and thus capital
00:06:46.060 00:06:46.070 intensive so who are the main players in
00:06:49.210 00:06:49.220 upstream the four main categories of
00:06:52.180 00:06:52.190 participants in the upstream sector are
00:06:54.280 00:06:54.290 the majors the NoCs
00:06:56.940 00:06:56.950 independence and oilfield services
00:07:00.010 00:07:00.020 companies major oil companies also
00:07:04.030 00:07:04.040 called integrated oil companies also
00:07:05.790 00:07:05.800 operate assets in other segments of the
00:07:08.440 00:07:08.450 industry these companies include the
00:07:11.740 00:07:11.750 prominent global brands that you are
00:07:13.510 00:07:13.520 familiar with including Exxon Mobil BP
00:07:16.660 00:07:16.670 Chevron and Shell national oil companies
00:07:21.130 00:07:21.140 are those industry participants
00:07:23.610 00:07:23.620 owned and managed by governments around
00:07:25.350 00:07:25.360 the world these includes Saudi Aramco
00:07:28.710 00:07:28.720 and Saudi Arabia
00:07:29.490 00:07:29.500 Pemex and Mexico and many others and
00:07:32.240 00:07:32.250 we'll include a link a list of all the
00:07:34.860 00:07:34.870 NoCs
00:07:35.460 00:07:35.470 and the program notes to this podcast
00:07:38.510 00:07:38.520 independence exists in each segment of
00:07:40.830 00:07:40.840 the oil and gas industry what makes them
00:07:42.990 00:07:43.000 independent is that they are not
00:07:44.550 00:07:44.560 integrated into other segments
00:07:46.790 00:07:46.800 independence in the upstream are those a
00:07:49.230 00:07:49.240 and P companies that concentrate solely
00:07:51.540 00:07:51.550 on finding and producing oil and gas
00:07:54.860 00:07:54.870 examples include Apache and Anadarko but
00:07:58.590 00:07:58.600 there are many others oilfield services
00:08:01.529 00:08:01.539 companies are important and often
00:08:03.719 00:08:03.729 misunderstood part of the upstream
00:08:05.100 00:08:05.110 operations this sector includes those
00:08:08.010 00:08:08.020 companies that provide the specialized
00:08:09.659 00:08:09.669 equipment services and technical skills
00:08:12.930 00:08:12.940 needed for exploring drilling completing
00:08:16.230 00:08:16.240 testing producing and maintaining crude
00:08:20.070 00:08:20.080 oil and natural gas wells oilfield
00:08:23.400 00:08:23.410 services and supply companies do not
00:08:25.500 00:08:25.510 typically produce oil and gas or own the
00:08:28.260 00:08:28.270 assets that contain hydrocarbon reserves
00:08:30.360 00:08:30.370 and as we mentioned earlier at a typical
00:08:34.230 00:08:34.240 well site there could be 30 or more
00:08:36.449 00:08:36.459 different oilfield service companies
00:08:37.769 00:08:37.779 handling the mechanical technical and
00:08:40.740 00:08:40.750 analytic operations needed to drill and
00:08:43.620 00:08:43.630 complete the well
00:08:47.249 00:08:47.259 so thanks for listening and we hope
00:08:49.689 00:08:49.699 you've learned a few things about the
00:08:51.009 00:08:51.019 upstream segment of the oil and gas
00:08:52.689 00:08:52.699 industry be sure to share that this as
00:08:55.720 00:08:55.730 you see fit and review us on iTunes if
00:08:57.850 00:08:57.860 you have a chance your feedback really
00:08:59.710 00:08:59.720 helps us improve as we move forward if
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00:09:04.840 00:09:04.850 101 microbes to mark its content go to
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00:09:12.910 00:09:12.920 access our free content library thanks
00:09:15.670 00:09:15.680 again and we'll see you next time

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