Module Code and Name: DTME216: BASICS OF OIL AND GAS SYSTEMS

Module Level: YEAR II SEMESTER I

Module Credit: 3 CU

Module Overview
Introduces the student to Oil and Gas systems in a reservoir

Module Learning Outcome

By the end of this module the learner should be able to:
1. Describe the composition of petroleum and its different characteristics of the reservoir
rock.
2. Explain gas and oil gas systems.
3. Describe the distribution of oil, gas and water in the reservoir
Competences
1. Describe and make a sketch reservoir where the petroleum is stored.
2. Explain the composition of petroleum and its different characteristics of the reservoir
rock.
3. Explain gas and oil gas systems.
4. Describe the distribution of oil, gas and water in the reservoir

Preparatory Assignment
Case studies: In the oil and gas producing states of the world
Detailed Module Description Durat
ion
Sub-module 1: Development of Oil and Gas 6hours
Upstream, Mid-Stream and Down Stream processes
Sub-module 2: Oil and gas source rocks 6hours
Oil and gas reservoir rocks, oil and gas trap, coalbed methane, shale gas
Sub-module 3: Main types of hydrocarbons 12hou
Petroleum, Diesel, paraffins, naphthenes, aromatics and impurities rs
Sub- module 4: Two. Phase behaviour 8hours
Phase diagram, dew point and bubble point lines, critical point line. Dew point
pressure and bubble point pressure
Sub- module 5: Oil and Gas systems 8hours
Main types of gas systems: wet, dry and gas condensate; oil system
Sub-module 6: Properties of oil and gas 12hou
Viscosity, formation volume factor and gas/oil ration: rock properties: porosity rs
permeability saturation

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Sub-module 7: Initial fluid distribution: 8hours
Free water, Free oil level oil water contact, Transition zone, and Residual oil
Mode of Delivery
The module should be taught using lectures, Industrial Visits, experiment and practical
work
Assessment
The module is assessed through assignments, tests, practical reports and module
examination. Their relative contribution to the final grade is shown below:
Requirements Contribution
Assignments 5%
Tests 10%
Practical work 25%
Final module examination 60%
Total 100%
Work plan

Sub-module 1: Development of Oil and Gas

Upstream, Mid-Stream and Down Stream processes

Introduction
The oil we are concerned with here is derived from rocks within the earth. It is called
petroleum, a name taken from the Latin words meaning "rock oil"

Crude oil is a naturally occurring, unrefined petroleum that is basically composed of

hydrocarbon deposits and other organic materials. The heavy oil can be processed
into more useful products like gasoline, kerosene, jet fuel, diesel, heating oil, and other
allied products called petrochemicals by refining process.

Formation of oil and gas

Oil and gas originate from plant and animal matter that accumulated in fine grained
sediments at the bottom of ancient seas many millions of years ago.
Oil originated as the remains of countless organisms that either lived in the sea or were
deposited there with mud and silt from prehistoric rivers and streams. The remains of
ancient plants and animals were transformed into oil and gas by bacterial action with
heat and pressure resulting from deep burial beneath other sediment.

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 • Fine grained sediment containing organic materials (decayed plants and animals)
in form of mud rapid burial in the mud preserves.
• Deep burial of the fine-grained layer containing the preserved organic materials
increases the temperature and pressure around the organic materials.
• Exposed to increased pressure, temperature between 65 0C and 1750C and bacterial
action over millions of years, the organic material forms oil droplets spread
throughout the fine-grained layer. These tiny oil droplets must gather together in
underground pools to be commercial significance (accumulation). Commented [A1]: OIL AND GAS FORMATION
•Decayed plant and animals in form of mud rapid burial in
the mud preserves.
•Deep buried organic materials increases the temp and
pressure under action of bacteria forms oil droplets.
•Oil droplets gather together in underground pools
(accumulation).

1.0 UPSTREAM, MID-STREAM AND DOWN STREAM PROCESSES.

The American Petroleum Institute divides the petroleum industry into five sectors:
• Upstream sector (exploration, development and production of crude oil or
natural gas);
• Midstream sector
• Downstream (oil tankers, refiners, retailers and consumers);
• Pipeline sector; and
• Service and supply sector Commented [A2]: OIL AND GAS PROCESSES /SECTORS
•Upstream sector (exploration, development and
production of crude oil or natural gas)

•Midstream sector (processing/refinery)

•Downstream (oil tankers, refiners, retailers and

consumers)

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1.1 UPSTREAM SECTOR
The upstream oil sector is also known as the exploration and production (E&P) sector.
E&P sector involves collecting data and drilling wells. Refers to the searching for and
the recovery and production of crude oil & natural gas. Upstream covers everything
to getting raw material to a refinery.
The upstream sector includes the searching for potential underground or underwater
oil and gas fields, drilling of exploratory wells, and subsequently operating the wells
that recover and bring the crude oil and/or raw natural gas to the surface. The upstream
can be further subdivided into 3 main parts: Exploration, Development and
Production.
It involves exploration activities of crude oil deposits leading to the production of
crude oil

Business cycle of upstream

Commented [A3]: UPSTREAM SECTOR PROCESSES.

Involves:
•Licensing (negotiation with Gov’t and individuals,

•Prospect (geological characteristics, seismic evaluation

•Exploration (infrastructure set up, analysis of formations

and hydrocarbon x-stics)

•Production drilling (full scale project and field

optimization).

•It involves exploration activities of crude oil deposits

leading to the production of crude oil
•

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Components of the Upstream Sector
The upstream can be further subdivided into 3 main parts
a) Exploration: One part is focused on finding oil & gas ‘pools.
• Which regions and basins?
• Which blocks?
• Where on the block?
b) Development: The second part is focused on how to get oil & gas out of what has
been discovered.
• How to Get it Out
• Where, in detail, are the reserves?
• What to build (facilities)?
• Will it be profitable?

c) Production: The mission of the third part is to get the most oil out of the ground
and to the refinery.
• From the Ground, to the Refinery
• How to manage the field?
• How to deliver the ‘crude’?

We Need to Drill Wisely

• We always need to drill wisely.
• Wells can be very expensive, some > $200 million, a lot even for a major oil
company. Such as ExxonMobil or Shell.
• Well placement and well path can be critical to success.
• We want to place each well in the best possible location -we can’t afford to trust
in ‘dumb luck’.
• Many times, the oil & gas occur at several depth levels. We are not limited to
drilling straight holes.
• So, we also need to carefully design the well path so that we can tap into several
‘pools’ in the best possible locations.
• Much of the technical work done in the upstream is directed towards
determining where to drill and predicting what we will find BEFORE we start
drilling.
How can we determine where to drill and predict what we will find BEFORE we
start drilling?
• This leads to the need for geologists, geophysicists, and other specialists
focused on imaging and interpreting the subsurface.

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 • This leads to the need for all types of scientists and engineers working in the
Upstream.
• Their goal is to image and interpret the subsurface so we can maximize oil &
gas production while minimizing costs.

Exploration:
Includes prospecting, seismic and drilling activities that take place before the
development of a field is finally decided.
In the past, surface features such as tar seeps or gas pockmarks provided initial clues
to the location of shallow hydrocarbon deposits. Today, a series of surveys, starting
with broad geological mapping through increasingly advanced methods such as
passive seismic, reflective seismic, magnetic and gravity surveys give data to
sophisticated analysis tools that identify potential hydrocarbon bearing rock as
“prospects.”
This means that oil companies spend much time on analysis models of good
exploration data, and will only drill when models give a good indication of source
rock and probability of finding oil or gas. The first wells in a region are called wildcats
because little may be known about potential dangers, such as the downhole pressures
that will be encountered, and therefore require particular care and attention to safety
equipment.

1.2 MID STREAM SECTOR

Midstream operations are sometimes classified with in the downstream sector, but
these operations compose a separate and discrete sector of the petroleum industry.
Midstream operations and processes include the following:
a) Gathering: The gathering process employs narrow, low-pressure pipelines to
connect oil-and gas-producing wells to larger, long-haul pipelines or processing
facilities.
b) Transportation: Oil and gas are transported to processing facilities, and from there
to end users, by pipeline, tanker/barge, truck, and rail. Pipelines are the most
economical transportation method and are most suited to movement across longer
distances, for example, across continents. Tankers and barges are also employed for
long-distance, often international transport. Rail and truck canal so be used for longer
distances but are most cost-effective for shorter routes.
c) Storage: Midstream service providers provides to rage facilities at terminals
throughout the oil and gas distribution systems. These facilities are most often located
near refining and processing facilities and are connected to pipeline systems to

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facilitate shipment when product demand must be met. While petroleum products are
held in storage tanks, natural gas tends to be stored in underground facilities, such as
salt domecaverns and depleted reservoirs.

Fig: Midstream Facilities

Midstream Gas sector

1.3 DOWNSTREAM SECTOR

Downstream is everything from refining to sales. The refining, processing, marketing,
and distribution of refined petroleum products.
Processing/refining: Processing and refining operations turns crude oil and gas into
marketable products. In the case of crude oil, these products include heating oil,
gasoline for use in vehicles, jet fuel, and diesel oil.

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Oil refining processes include: distillation, vacuum distillation, catalytic reforming,
catalytic cracking, alkylation, isomerization and hydro treating.
Natural gas processing includes: compression; glycol dehydration; amine treating;
separating the product in to pipeline-quality natural gas and a stream of mixed natural
gas liquids; and fractionation, which separates the stream of mixed natural gas liquids
into its components. The fractionation process yields ethane, propane, butane,
isobutane, and natural gasoline.
It is a term commonly used to refer to the refining of crude oil, and the selling and
distribution of natural gas and products derived from crude oil. Such products include
liquified petroleum gas (LPG), gasoline or petrol, jet fuel, diesel oil, etc.
The downstream sector includes oil refineries, petrochemical plants, petroleum
product distribution, retail outlets and natural gas distribution companies.

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Petroleum Refining
Crude oil from the field is a mix of hydrocarbons of different molecular length (all
hydrocarbons contain carbon and hydrogen, but in different compositions). Therefore,
Crude oil must be refined before it can be optimally used.
Crude oil refining. The process through which the various components of crude oil
are separated or the process of transforming crude oil into finished petroleum products
(that the market demands). Crude oil must undergo several separation processes so
that its components can be obtained and used as fuels or converted to more valuable
products. The separation is done from a refinery.

What is a refinery?
A refinery is a plant where crude oil is boiled and distilled to separate the individual
components.
Atmospheric distillation is the essential process from which refining starts. It is
normally followed by further stages:
• Vacuum distillation,
• Cracking: thermal or catalytical, etc.
The objective is to increase the output of light products, which are more valuable and
reduce residuals, which constitute a problem.
Oil refining: Is an industry which refine crude oil into more useful petroleum
products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and
liquefied petroleum gas by fractional distillation.

Distillation of crude oil.

We can separate the components of crude oil by taking advantage of the differences
in their boiling points. This is done by simply heating up crude oil, allowing it to
vaporize, and then letting the vapor to condense at different levels of the distillation
tower (depending on their boiling points). This process is called fractional
distillation and the products of the fractional distillation of crude oil is called
fractions.
A fraction from crude oil can be categorized into two categories:
• Refined Product: A crude oil fraction which contains a lot of individual
hydrocarbons (e.g. gasoline, asphalt, waxes, and lubricants).
• Petrochemical Product: A crude oil fraction which contain one or two specific
hydrocarbons of high purity (e.g. benzene, toluene, and ethylene).

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senariol

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SUB-MODULE 2: OIL AND GAS SOURCE ROCKS.
Oil and gas reservoir rocks, oil and gas trap, coalbed methane, shale gas.

2.0 OIL AND GAS SOURCE ROCKS

Categories of Rocks
(a) Source rock:
Source rock is a rock with high concentration of organic material that can be
transformed into oil under the action of high temperature and pressure. Source rocks
are usually shales or limestones (sedimentary rocks). The shale is a fine grain rock
that comes mostly from clay while as limestone is composed of calcite CaCO3, the
main building element in sea shells.

Migration and Accumulation

After the oil is created, it is pushed by pressure upwards. Under the pressure from the
oil the shale rock (which is a typical source rock) can form cracks and allow the oil to
flow either upwards or in horizontal directions to the reservoir rocks.
(b) Reservoir rock:
An oil and gas reservoir is a formation of rock in which oil and natural gas has
accumulated. Reservoir rocks both store and transmit the oil. Good reservoir rocks
have high porosity (which is the ability to store fluid) and permeability (which is the
ability to transmit fluid). A lot of reservoir rocks are sandstone and carbonates.
Sandstone is a rock composed of sand size grains. Carbonates consist of calcite and
dolomite. The dolomite is obtained from calcite (CaCO3) by substituting one of the
calcium molecules with magnesium CaMg (CO3)2.

(c) Cap rock:

A cap rock that prevents the oil from seeping into the surface of the Earth. The cap
rock is a rock that cannot transmit oil (it forms a trap). Cap rock are shale rocks or
limestone and sandstone rocks immersed in shale. An example of a trap is an anticline
which looks like a dome of a cap rock over the reservoir rock (Fig.1). Anticlines can
form as a result of squeezing a plane of the cap rock from the sides.

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Types of Rock:
The oil and gas bearing structure is typically porous rock, such as sandstone or
washed-out limestone. The sand may have been laid down as desert sand dunes or
seafloor. Oil is formed and trapped in sedimentary rather than igneous rocks.

2.2 Three Types of Rocks

They are three types of rocks;
(i) Igneous
(ii) Sedimentary and
(iii) Metamorphic.

2.2.1 Igneous Rocks are rocks that have solidified from a molten or liquid state. These
rocks can be formed deep in the earth or at the surface from the cooling of volcanic
lava. Igneous rocks do not normally contain hydrocarbons.

2.2.2 Sedimentary Rocks are formed by the laying down of sediment in seas, rivers
or lakes. The particles of sediment that accumulate are eventually cemented together
to form sedimentary rock by the percolation (filtration) of mineral rich waters through
the spaces between the particles. It is these sedimentary rocks in which hydrocarbons
(oils) are normally found.

2.2.3 Metamorphic rock is formed by the metamorphosis (transformation) of

existing rock, be it igneous or sedimentary, by extreme heat and pressure. These
factors cause recrystallization of the minerals in the rock. Metamorphic rocks do not
normally contain hydrocarbons.

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Porosity
Petroleum is not found in underground rivers or caverns, but in pore spaces between
the grains of porous Sedimentary rocks. What does the word porous mean?
A piece of porous sedimentary rock. The pore spaces are the white areas between the
dark grains. It is within such pore spaces that fluids such as oil, natural gas, or water
can be found in the subsurface.

Example: A sponge is a good example of a household object that is porous or in other

words possesses porosity. If we take a dry sponge and dip, it in water, the sponge will
soak up the water. The water that is soaked up is absorbed into pore spaces within the
sponge. In the same way as the sponge, certain types of sedimentary rocks can also be
porous and contain oil and gas within pore spaces.
Porous rocks that contain oil and gas buried thousands of metres below the earth's
surface are being squeezed in this fashion by the weight of the overlying rock and the
water contained in that rock. That is why the oil flows out of the rock and up to the
surface when the rock is penetrated by a well.

Permeability
For oil or gas to be able to flow freely through a rock, that rock must possess
permeability as well as porosity. The permeability of a rock is a measure of the ease
with which fluids can flow through a rock. This depends on how well the pore spaces
within that rock are interconnected. If none of the pore spaces were connected to other
pore spaces, then no oil could flow through the rock.

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How sedimentary rocks are formed?
(a) Erosion and transportation
All rocks including igneous, metamorphic and sedimentary that are exposed to the
elements of wind, rain, heat and cold eventually give way to wear and tear and are
eroded. Some are simply broken up into small pieces by frost and running water while
others are dissolved slowly as weak acids in ground water react with the minerals
contained within the rocks. In either case, the debris or sediment, as it is called, is
gradually carried downhill by the forces of gravity and running water. These rock
fragments are deposited in sediment traps such as ponds or lakes. So inevitably, most
sediment moves on until it is finally deposited into a large body of water such as a
very large lake or the ocean itself.
A large depressed area in which a lot of sediment has been or is being deposited is
called a sedimentary basin.
Sedimentary rocks that are formed primarily from fragments of other rocks are called
CLASTICS and include sandstones (from sand-sized particles), conglomerates (from
gravel-sized pieces) and SHALES (from clay particles). But in addition to the rock
fragments being transported into the sea, the flowing waters also contain dissolved
minerals such as calcium and salt. These minerals will eventually come out of solution
and form precipitates (solids) when the conditions are right. Sedimentary rocks
formed primarily from this precipitation process include limestone, gypsum and salt.

(b) Sedimentation
As sediment is continuously dumped into the ocean, it gradually sinks to the bottom
and starts to form layers. Coarser, heavier material (gravel) is deposited close to the
shore and finer grained sediment (fine sand and clay particles) is deposited further out,
in the deeper water (Figure 3.4) Over millions of years, these layers become thicker
and thicker. Sea levels rise and fall because of worldwide changes such as the start
and end of ice ages or as a result of the raising or lowering of the land in the area by
powerful forces from within the earth (the same forces that cause earthquakes). This
means that an area that was, at one time in deep water, can at other times lie in
shallower water, and vice versa. Varying the water depth and environmental
conditions of an area results in different types of sedimentary layers being deposited
in the area at different times. The result is that in any given area there can be many
different layers, containing different kinds of sedimentary rock.

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Subsidence
As millions of tons of sediment are deposited onto the seabed in an area, the weight
of the sediment can cause the underlying ground to subside or buckle downward. This
subsidence allows the area to stay under water even as thick layers of sediment are
deposited over millions of years. Subsidence of the seabed allows thousands of metres
of sediment to be deposited in an area even though the water depth may never exceed
a few hundred metres.

Cementation
We now know how sediment is created, transported and deposited. But how is this
material transformed into the solid rocks that we call sedimentary rocks?

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As sediment becomes more deeply buried, it is squeezed by the weight of the
overlying material. This pushes the sedimentary particles very close together, forcing
out much of the water. The temperature of the material also increases with the depth
of burial and this combination of increased heat and pressure accompanied by
chemical action of certain dissolved minerals in the ground water cements the
sediment into solid rock.

Hydrocarbons Traps
Explained how oil and gas are found in porous sedimentary rocks within sedimentary
basins. But does this mean that if you drill a well anywhere at all in a sedimentary
basin you will strike oil or gas?

Note: The force of gravity makes water run downhill. Therefore, water collects in low
bowl-shaped depressions in the land. These bowl-shaped depressions provide traps in
which water collects and become lakes and ponds. Fortunately for us, there are many
such natural water traps or reservoirs that conveniently store large amounts of water
for our use.

Oil floats
This is because the oil, which is less dense than water, forms a separate layer which
actually floats on the surface of the water. Droplets of oil in rocks buried deep
underground will also float above the water that is also present within these rocks. So,
instead of running downhill as surface water does under the force of gravity, oil
droplets in the subsurface tend to move upward, under the force of buoyancy, so as to
float above the water that shares the same pore spaces.
Driven by buoyancy, these oil droplets migrate upwards toward the surface through
pores and cracks within the layers of rock. If these drops of oil encounter an
impermeable surface through which they cannot flow, they will continue to flow
upward along the underside of this impermeable sealing rock and collect in traps as
shown in the fig. below. If no traps are encountered, the oil droplets will migrate all
the way to the surface creating an oil seep. Oil seeps are quite common in areas of
petroleum potential and were used by the earliest oil prospectors to identify drilling
locations.

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 NB: Reservoirs occur in places where fluids tend to collect.

Natural Gas reservoir

Natural gas, being less dense than either oil or water, tends to float above water and
oil in the subsurface.
Sometimes, the natural gas is dissolved in the oil, but it very often forms a separate
layer of its own which floats above the oil layer. In such a case, we get a layer of
natural gas floating upon a layer of oil which is in turn underlain by a layer of water.

Geologic structures become Hydrocarbon Traps

This means that the layers of rock must somehow become buckled and bent to provide
the geologic structures that may become traps.
These powerful forces that tend to stretch, squeeze, bend and break the rock layers are
the same forces that cause earthquakes. The geologic structures that are created (i.e.
bends and breaks or faults in the rock layers) can become hydrocarbon traps where
certain conditions are present:
(1) There must be hydrocarbon source rock in the area. Source rock is the fine-grained
rock in which the organic material originally present has been converted into
hydrocarbons.

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(2) There must be a porous and permeable rock layer to provide a reservoir in which
the hydrocarbons can accumulate.
(3) There must be an impermeable sealing rock overlying the reservoir rock to trap
the hydrocarbons. Examples of Geologic structure Traps include structural traps and
stratigraphic traps.

Stratigraphic traps
Stratigraphic traps are traps that are formed by changes in the characteristics of the
rock formation such as a loss of permeability or porosity or a break in continuity of a
layer.
Structural traps
Structural traps on the other hand are caused by the bending or breaking of the
sedimentary layer. The most common and simplest type of structural trap is the
anticline which is a structure formed when the layers of rock have been buckled
upward.

Note: Figs A and B are both examples of structural traps. C is an example of a

stratigraphic trap formed when a porous rock layer is encased in nonporous
impermeable rock.

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Petroleum System
The Petroleum System consists of a mature source rock, migration pathway, reservoir
rock, trap and seal. Appropriate relative timing of formation of these elements and the
processes of generation, migration and accumulation are necessary for hydrocarbons
to accumulate and be preserved. The components and critical timing relationships of
a petroleum system can be displayed in a chart that shows geologic time along the
horizontal axis and the petroleum system elements along the vertical axis.
Exploration plays and prospects are typically developed in basins or regions in which
a complete petroleum system has some likelihood of existing.

Source Rock Hydrocarbon Generation

The formation of hydrocarbon liquids from an organic rich source rock with kerogen
and bitumen to accumulates as oil or gas.
Generation depends on three main factors:
• Presence of organic matter rich enough to yield hydrocarbons,
• Adequate temperature,
• Sufficient time to bring the source rock to maturity.
• Pressure and the presence of bacteria and catalysts also affect generation.
Generation is a critical phase in the development of a petroleum system.

Migration
The movement of hydrocarbons from their source into reservoir rocks. This can
primary or secondary migration.
• The movement of newly generated hydrocarbons out of their source rock is
primary migration, also called expulsion.
• The further movement of the hydrocarbons into reservoir rock in a hydrocarbon
trap or other area of accumulation is secondary migration.
• Migration typically occurs from a structurally low area to a higher area in the
subsurface because of the relative buoyancy of hydrocarbons in comparison to
the surrounding rock.
• Migration can be local or can occur along distances of hundreds of kilometres
in large sedimentary basins, and is
• Critical to the formation of a viable petroleum system.

Accumulation
The phase in the development of a petroleum system during which hydrocarbons
migrate into and remain trapped in a reservoir.

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Reservoir
A subsurface body of rock having sufficient porosity and permeability to store and
transmit fluids.
Sedimentary rocks are the most common reservoir rocks because they have more
porosity than most igneous and metamorphic rocks and they form under temperature
conditions at which hydrocarbons can be preserved. A reservoir is a critical
component of a complete petroleum system.

Seal (cap rock).

An impermeable rock that acts as a barrier to further migration of hydrocarbon
liquids.
Rocks that form a barrier or cap above and around reservoir rock forming a trap such
that fluids cannot migrate beyond the reservoir. The permeability of a seal capable of
retaining fluids through geologic time is ~ 10-6 to 10-8 darcies commonly
• shale, mudstone
• anhydrite
• salt,
A seal is a critical component of a complete petroleum system.

Trap
A configuration of rocks suitable for containing hydrocarbons and sealed by a
relatively impermeable formation through which hydrocarbons will not migrate.
Traps are described as:
• Structural traps: Hydrocarbon traps that form in geologic structures such as
folds and faults
• Stratigraphic traps: Hydrocarbon traps that result from changes in rock type
or pinch-outs, unconformities, or other sedimentary features such as reefs or
build ups.
A trap is an essential component of a petroleum system.

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