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Offshore Oil and Gas
1.1 Introduction to the Petroleum Industry
The word âpetroleumâ is made up of two Latin words, âpetraâ meaning rock and âoleumâ meaning oil. In essence, petroleum is the liquid compound of hydrocarbons found beneath the surface of the Earth. This compound can be refined to produce petrol, diesel oil, paraffin and other petrochemicals.
Hydrocarbons, as the name suggests, consist of various proportions of hydrogen and carbon atoms. When found in liquid form, these hydrocarbons are referred to as âcrude oilâ which varies in colour and viscosity due to its composition. The colours could be various shades of yellow or black. Oil consists of a mixture of liquid hydrocarbons1 whereas gas consists mainly of methane but mixed with carbon dioxide, nitrogen, and helium or hydrogen sulphide. Since gas is lighter than oil, it is found prior to the discovery of oil. Due to high temperatures, some fossils convert into coal whereas the gases and liquids escaping this process form natural (and other gases) and oil. This process has been known to take 10â100 million years and continues even today.
Oil as a substance has been known to humankind for thousands of years. In the early 1840s, it was discovered in sand, springs and oil/tar pits and was used for lighting, street paving, medicine and waterproofing. As the world population and therefore the use of oil increased, processes were developed to refine kerosene from crude oil. The first land based well to facilitate the commercial supply of oil was drilled near Baku, Caspian Sea in 1848 and in Poland in 1854. In the 1850s and 1860s, Azerbaijan supplied up to 90 per cent of the oil supply to the world.
Figure 1.1 Propane (C3H8) molecule
Figure 1.2 Drilling and production piers at Summerland, California, USA
(Source: http://aoghs.org/offshore-oil-and-gas-history/offshore-oil-history/)
The presence of oil was known in North West Pennsylvania, USA for a long time. In 1859, the first well that produced ten barrels/day was drilled in Titusville, Pennsylvania. This find led to Pennsylvania becoming the lead oil supplier until 1901 when the largest production well was drilled in Spindletop Hill, south of Texas, USA. This well produced in excess of 100,000 barrels of oil per day.
The first offshore oil wells were drilled in around 1891 in Grand Lake St Marys, Ohio, USA. About five years later, oil wells in the Summerland field in California were drilled. The technique used at the time was very basic â wooden piers extending 400 metres from the shore with piles of 10 metres length reaching the seabed. Steel pipes were then pounded for depths of about 40 metres to reach the oil reserves giving a very modest yield and leaving enormous spillage into the sea.2 By 1910, shore based drilling had begun in Iran, Sumatra, Venezuela, Peru and Mexico. The Taxas Company, which subsequently changed its name to Texaco and then to Chevron, developed the first mobile drilling units for the Gulf of Mexico.
Oil exploration commenced in 1933 in Saudi Arabia when oil concessions were granted to the Standard Oil Company of California which became the California Arabian Standard Oil Company (CASOC). Saudi Arabian oil reserves were subsequently discovered in 1938 to produce oil at commercial scale. In 1948, the largest oil field in the world, Ghawar, Saudi Arabia, was discovered.
In 1947, an offshore oil well was drilled in water depth of approximately 5 metres and 10.5 miles off the coast of Louisiana, USA. By this time, the technology had advanced to some extent whereby unidirectional pile drivers were used instead of rotary rigs. Instead of using wooden structures,3 steel was used and barge drilling practice was put in place. The developments in offshore drilling were halted in 1950 by disputes of jurisdiction over the continental shelf and therefore leasing of the submerged lands around the coast of the USA. However, when the US federal government passed the âOuter Continental Shelf Lands Act of 1953â, they resumed leasing activity allowing further oil exploration.
In 1954, Mr Charlie, the first purpose built Mobile Offshore Drilling Unit (MODU), was used by Shell Oil to explore for oil in the Gulf of Mexico, USA. In 1961, the first four column semi-submersible drilling rig, owned and operated by the Blue Water Drilling Company, was deployed in the Gulf of Mexico for Shell Oil. In 1965, the British drilling barge âSea Gemâ was the first rig to discover hydrocarbons 42 miles off the River Humber in the United Kingdom. Prior to it, a number of attempts had been made without much success. Up to a depth of 2500 metres, Sea Gemâs drilling did not produce any positive prospects of finding oil or gas but after carrying out further tests, British Petroleum (BP) decided to continue drilling. Eventually, at a depth of 3000 metres a large reservoir of natural gas was discovered. This discovery resulted in a yield of 300,000 cubic metres of natural gas per day, a quantity that easily justified commercial operations. Unfortunately, when attempts were being made to relocate Sea Gem for drilling a second well, the rig suffered damage to two of its eight legs, resulting in the rig sinking in December 1965 causing a loss of 13 lives. The loss of Sea Gem resulted in a requirement to have a âstandbyâ vessel around the rig and an Offshore Installation Manager (OIM) nominated.
In 1960, Saudi Arabia, Kuwait, Iraq, Iran and Venezuela formed OPEC (Organization of Petroleum Exporting Countries). Later on, countries including Qatar, Indonesia, Libya, United Arab Emirates, Algeria, Nigeria, Ecuador, Angola and Gabon became members. In 1969, the offshore petroleum industry suffered its first major oil spill disaster when a platform 6 miles off the cost of Summerland USA suffered a natural gas blowout from a 1000 metres deep well. A 800 square mile slick of oil spilled into the Santa Barbara Channel, California, the equivalent of 80,000 barrels of oil leakage in a period spread over 11 days. This was the first major drilling incident in the history of oil and gas exploration. Consequently, the US government reviewed its environmental and regulatory policies for this type of operation.
Although oil production in the USA peaked in 1970, the countryâs dependency on oil created a shortfall leading to increased demand for oil from Arab nations. However, during the ArabâIsrael conflict in 1973, OPEC imposed an embargo on oil exports to the USA, Netherlands, Portugal and South Africa, countries that supported Israel. This embargo was finally lifted in 1974 but in the process, the West changed its policy towards oil exploration. The Iranian revolution in 1979 caused the second oil crisis due to the reduction in oil production. Subsequently, in 1980 the oil production in both Iran and Iraq significantly reduced due to the IranâIraq war. During this time Venezuela, Mexico, Nigeria and the USSR increased their production and therefore their oil exports.
Due to increased depths and distance from shore, the exploration and production of offshore oil and gas present bigger challenges in comparison with land based drilling due to the remoteness and harshness of the environment. Whilst in the USA, Santa Barbara remained the biggest âblowoutâ incident, similar incidents took place in the North Sea, Persian Gulf, Niger Delta and the Mexican waters of the Gulf of Mexico. The most recent major oil spill incident at the time of writing this book is the âDeepwater Horizon Oil Spillâ (April 2010) in which approximately 4.9 million barrels of oil were spilled â the largest oil spill in the history so far. The leaking well was finally sealed in September 2010 but by this time, the incident had caused the death of 11 employees with a US$37.2 billion estimated spill related cost.
Whilst on-board drilling rigs or production platforms, accidents can be the cause of a major loss of life or property and damage to the environment, many accidents take place during the transportation of personnel and equipment to and from offshore drilli...