Petroleum Horizon

     Crude Oil has certainly had a colorful history. Some of its early uses were waterproofing wooden boats and the Roman used it as a weapon, for embalming, and lighting. The Ancient Persians, 10th century Sumatrans and pre-Colombian Indians all believed that crude oil had medicinal benefits. Marco Polo found it used in the Caspian Sea region to treat camels for mange, and the first oil exported from Venezuela in 1539 was intended for the Holy Roman Emperor Charles the fifth.

     Right up until the early 1900's, mineral oil, a by-product of petroleum, was a regular component found in "Snake Oil", the infamous cure-all wonder treatment. It was the less successful uses of petroleum. Until the late 19th century, an oil find was often met with disinterest or dismay. Pioneers who settled the American West dug wells to find water or brine; they were disappointed when they struck oil. Several historical factors changed that. The kerosene lamp, invented 1854, ultimately created the first large-scale demand for petroleum. Kerosene was first made from coal, but by the late 1880's most was derived from crude oil.

Petroleum System

         

Oil is a hydrocarbon liquid substance that is greasy to the touch and is formed by natural resources or the breakdown of fats. Oil comes in many forms as diverse as crude oil and vegetable oil, which serve very different purposes. Products consisting of oil are insoluble when added to water, but will dissolve in organic substances such as those acquired from living organisms.

          In search of oil and gas needed an exploration. Exploration is an activity search and find hydrocarbon resources and estimate the hydrocarbon potential in a basin. But to make an exploration of the need for a system. This system is called the Basic Petroleum System is the process of finding hydrocarbon content below the surface. In Basic Petroleum System are critical components that must be present. The components are:

          1. Source Rock

          2. Reservoir Rock

          3. Migration

          4. Trap

          5. Seal/Cap Rock

1   1.Source Rock

Are sediments containing organic materials sufficient to produce oil and gas when the sediment is buried and heated, and can produce the oil and natural gas in economic quantities. Organic materials contained called karogen. Karogen has 4 types namely:

• Type 1

   Algae from Lacustrine deposition environment and lagoon. This type can    

   produce oil with good quality and able to produce gas.

• Type 2

   A mixture of plants and marine microorganisms. This type is the main

   ingredient of oil and gas.

• Type 3

   Land plants in sediments containing coal. This type generally produces gas and   

   a small amount of oil.

• Type 4

   Materials plant material is oxidized. This type is not able to produce oil and

   gas.

2. Reservoir Rock

Rocks that are capable of storing and capable of flowing hydrocarbons. Reservoir rock is where hydrocarbons accumulate. Where the rock must have porosity as a hydrocarbon storage and permeability as where the flow of hydrocarbons. Types of Reservoir are:

• Siliclastic rock

• Carbonate Rock

• Igneous Rock (Rock Frozen)

• Metamorphic Rock

3. Migration

The process of oil and gas transportation from the source rock to the reservoir. Transportation of hydrocarbons occur in some processes, namely:

- Primer Migration             = Migration in sequence of Source Rock

- Ekspulsion                     = From sequence to the carrier bed Source Rock

- Secondary Migration       = Transport carrier bed leading to the trap

4. Trap

The shape of a geometry or facies are able to hold oil and gas to gather and not move again. A trap should consist of rock hydrocarbon reservoir as a storage place and a set of seals as a cover to prevent the migration again.

The process of migration and trap formation are not interconnected and occur at different times. Trap formation time is very important because if the hydrocarbon trap formed before migrating it would likely ditemukanya hydrocarbon accumulation in the trap. And otherwise the possibility of hydrocarbons have been passed through the trap. The type of trap that is:

• Structural Traps

  Entrapment is affected by the occurrence of deformation to the bedding with the       

  formation of folds and faults structures is a response to tectonic events and the most   

  original trap and trap the most important.

• Entrapment Stratigraphy

  Trap is affected by variations perlapisan vertically and laterally, rock facies changes and 

  disharmony and lateral variations in reservoir lithology on a layer in the transfer of oil.

• Trap Combination

  The combination of structural and stratigraphic. Where in the trap of this type is a factor 

  in limiting the movement along or trapping petroleum.

5. Seal Rock

Seal rock is rock baffle system that is not permeable like claystone / mudstone, anhydrite and salt.

BHI: Oil rigs push down overall US rig count by 9

HOUSTON, May 13

05/13/2016

By Matt Zborowski
OGJ Staff Writer

The US drilling rig count fell 9 units to 406 rigs working during the week ended May 13, anchored by a double-digit loss in oil-directed rigs, according to data compiled by Baker Hughes Inc .

The overall count has now dropped in 21 straight weeks and 36 of the past 38 weeks. Since the overall drilling dive commenced following the week ended Dec. 5, 2014, the overall count has fallen 1,514 units (OGJ Online, Dec. 5, 2014).

As quarterly earnings reports have been released over the past few of weeks, some US exploration and production firms have provided updates on first-quarter, present, and future drilling activity (OGJ Online, May 6, 2016).

Among the firms to make a later announcement, Halcon Resources Corp. said this week that it’s running 1 operated rig in the Fort Berthold area of the Williston and plans to keep the rig running through the remainder of 2016. The firm operated an average of 2 units in the basin during the first quarter.

The firm also operated 1 rig in El Halcon of the Eagle Ford during the first quarter, but has no other operated units running companywide and doesn’t plan additional units until crude oil prices improve. It currently has 14 wells in the Bakken being completed or waiting on completion and none in the Eagle Ford.

Oil rigs down 10

Falling for an eight consecutive week, the US oil-directed rig count lost 10 units to 318, down 1,291 since its peak in BHI data on Oct. 10, 2014, and its lowest level since Oct. 23, 2009. The current count is still comfortably above the 2008-09 downturn’s bottom of 179 touched on June 5, 2009.

US gas-directed rigs edged up a unit to 87.

Land-based rigs declined 6 units to 382, down 468 year-over-year. Rigs engaged in horizontal drilling decreased 3 units to 315, down 1,057 since a peak in BHI data on Nov. 21, 2014, and their lowest count since Dec. 1, 2006. Directional drilling rigs fell 6 units to 38.

Two rigs offshore Louisiana stopped work, bringing the overall US offshore count to 22, the country’s lowest level since Nov. 24, 2010, months after the Macondo deepwater well incident. The count of rigs drilling in inland waters is now 2 after 1 unit went offline this week.

Freeport-McMoRan Inc. and drilling contractor Noble Corp. PLC this week agreed to cancel contracts for the Noble Sam Croft and Noble Tom Madden drillships operating in the Gulf of Mexico (OGJ Online, May 11, 2016).

Noble Sam Croft was scheduled to terminate in July 2017 and Noble Tom Madden in November 2017. Noble Corp. said it also expects to realize more than $100 million in direct cost savings as a result of the contract terminations through crew reductions and stacking procedures.

Bolstered by a 5-unit jump in oil-directed rigs, the Canadian count of active rigs posted its first increase this week in 14 weeks, gaining 7 units to 43. Oil-directed rigs, which have risen in 2 straight weeks, now total 16. Gas-directed rigs, accounting for the other 2 units to come online this week, now total 26.

Canada’s overall count is still down 207 units since Jan. 22.

Texas, Permian erase last week’s gains

After posting respective increases last week of 3 and 5 units, Texas and the Permian this week resumed their usual leading spots in losses among the major states and basins.

Texas shed 7 units to 181, down 777 since a peak in BHI data on Aug. 29, 2008, and its new lowest point in BHI data since the 1990s. The Permian lost 5 units to 134, down 434 since a recent peak on Dec. 5, 2014. The Eagle Ford and Barnett each lost a unit to 33 and 5, respectively. The Eagle Ford is now down 226 units since a peak on May 25, 2012.

Mostly reflecting its offshore losses, Louisiana fell 3 units to 40—split evenly between onshore and offshore—which is the state’s lowest level in BHI data that dates back to the 1990s. The Haynesville increased a unit to 13.

Oklahoma, North Dakota, and Wyoming each edged down a unit to 56, 24, and 7, respectively.

Oklahoma is down 153 units compared with when it entered 2015, and at its lowest point in BHI data that dates back to the 1990s. The Mississippian also lost a unit, settling at 5. The Ardmore Woodford declined a unit to 1.

North Dakota is down 179 units since an all-time high during June 1-8, 2012, and at its lowest level since Jan. 27, 2006. Representing all of the activity in its home state, the Williston also was down 1 to 24.

California rose a unit to 5. New Mexico was back on top of the major states in gains, increasing 2 units to 18.

Higher oil prices lift output estimates

US rig-count declines continue to limit US Energy Information Administration's forecast of future drilling and production through 2017.

The agency this week reported that US crude oil production during the week ended May 6 was down 23,000 b/d week-over-week to 8.8 million b/d, the lowest level since September 2014 (OGJ Online, May 12, 2016). Output was down 532,000 b/d compared with the same period during 2015.

In its Short-Term Energy Outlook for May, EIA estimates total US crude output has fallen 700,000 b/d since April 2015 to 9 million b/d in April, with the entire decline coming in the Lower 48 onshore.

Production is expected to fall most rapidly from April through September at an average monthly rate of 160,000 b/d, and then remain relatively flat from this October through July 2017, averaging 8.2 million b/d.

EIA forecasts third-quarter 2017 output to average 8.1 million b/d compared with 9.1 million b/d in first-quarter 2016 (OGJ Online, Apr. 15, 2016). Output of 8.1 million b/d would be 1.6 million b/d below the April 2015 level, which was the highest monthly production since April 1971.

However, the third-quarter 2017 estimate is revised up 200,000 b/d from the April STEO forecast because of higher expected crude prices. EIA expects output to begin rising after third-quarter 2017, reflecting productivity improvements and lower breakeven costs, as well as the forecast oil-price increases.

Yearly US projected averages are seen down from 9.4 million b/d in 2015 to 8.6 million b/d in 2016 and 8.2 million b/d in 2017, the latter of which is 100,000 b/d higher than last month’s projection.


Source : http://www.ogj.com/articles/2016/05/bhi-oil-rigs-push-down-overall-us-rig-count-by-9.html