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How is Petroleum produced commercially?
Petroleum production is the overall term given to the process of extracting a hydrocarbon reserve from an economically viable subsurface discovery.
Before mining takes place, operators will usually have done both prospecting and exploration in the area to accurately delineate the petroleum field. Following this, and a full appraisal of the resource potential in the area, the permit holder will make a decision whether to invest in the discovery.
Should the resource be commercially viable, the permit holder could apply for a petroleum mining permit and would not be required to participate in a competitive process. This is a subsequent right of the petroleum exploration permit. Such an approach takes into account the significant investment an explorer has already made in assessing the potential of an area.
The production process represents the successful realisation of a prospective petroleum province into a productive province. An example of a productive province is the onshore/offshore Taranaki Basin, the only commercially productive basin within New Zealand.
Production can be split into these broad steps:
1. Estimate the production life of the field
2. Design production facilities
1. Estimate the production life of the field
Once discovery appraisal operations are complete, it is necessary to estimate how big the resource is, what is expected to be produced (i.e. crude oil/condensate and/or natural gas) and the specific chemical composition of such products.
This, and other technical information, will allow the expected production life of the field to be estimated.
2. Design the production facilities
The engineering design process considers all this information along with the geographic location of the resource (i.e. water depth), and aims to design appropriate infrastructure to ensure the safe, effective and efficient extraction of the resource.
The most important thing for all stakeholders (including the government, the operating company, the public, iwi groups etc.) is that the development and design are fit for purpose and will operate safely for the extent of the field’s production life.
This point of development in the exploration-production cycle represents the greatest reliance on surface and subsurface infrastructure. It is not surprising therefore that it also represents the point at which the greatest capital investment is requirement. Costs for such developments can run into the billions of dollars.
In general terms, an offshore production facility will include the following:
Sub-surface infrastructure
Oil and gas is extracted from the ground by way of a production bore(s) that is drilled by an oil rig into the subsurface reservoir horizon. A steel pipe (casing) is placed in the hole, to provide structural integrity to the newly drilled wellbore. Holes are then made in the base of the well to enable oil and gas to pass into the bore. Finally a collection of valves are fitted to the top to regulate pressure and control flows.
Infrastructure arrangements
This collective system of pipes allows produced products (in the case of almost all offshore fields from multiple production wells) to be collected into a single production stream. This can then be directed to the appropriate infrastructure hub for processing.
An offshore platform arrangement
Acting as a central hub to offshore operation, there are numerous possible platform arrangements in existence around the world, dependent on individual development requirements.Top
Platform arrangements (if deemed appropriate) allow a central means to access wells for production monitoring operations, well refurbishment processes and additional well drilling if required. These platforms can be fixed to the ocean floor or moored if water depths dictate. Some have the capability for personnel to work and live onboard (i.e. Maui A platform), or can be unmanned (i.e. Kupe platform). |  |
Means of transport
In the event of onshore processing facilities, produced hydrocarbons are transported via a pipeline system to a centralised processing facility on shore. Examples of offshore/onshore pipelines in New Zealand include the Maui, Kupe and Pohokura fields.
Onshore production facilities
If produced hydrocarbon is piped to shore, a processing plant will separate valuable petroleum products for market delivery, i.e. oil and gas. Production stations vary in size dependent on the nature of the produced hydrocarbons and daily production volumes.
3. Commercial Production
Once all infrastructure requirements are built and appropriately commissioned, the development project then moves into a production phase which involves 24 hours a day production, processing and transport of the petroleum products to market.
Dependent on resource volumes and daily production requirements, production operations can last for decades. Large development projects in New Zealand such as the Kapuni and Maui accumulations, with initial production commencing in 1969 and 1979 respectively, are still producing today.
