Monday, January 28, 2013

At a glance: How the oil and gas extraction industry works

In the past decades, oil explorations around the world have taken an aggressive turn and were seen taking geographic challenges posed by environmentally hostile areas, which include frigid regions, deep water locations, and previously uncharted desert zones. All the efforts are continuously inspired by the growing global demand for oil. In view of these facts, it is important to understand how the oil and gas extraction industry works. There are four major processes involved. These include the following:

Exploration. This phase involves the discovery of oil or natural gas deposits, as well as exploratory drillings.

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Well development. This phase immediately follows after the exploration phase comes out with positive results on economically recoverable fields. Construction of wells happens on this stage.

Production. This phase involves the extraction and separation of reservoir fluids(oil, gas, water) and the processing of oil.

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Site abandonment. This phase may either happen after the exploration stage when wells are determined nonviable for oil or gas production, or when a production well has already been maximized of its potential.

Currently, the oil and gas extraction industry remains one of the most vibrant sectors in the world. Based on the Organization of the Petroleum Exporting Countries (OPEC) data, the demand for crude oil will rise up to 96.1 million barrels per day by 2015, 102.2million barrels per day by 2020, and 113.3 million barrels per day by 2030. This significant increase only points to one thing: Oil will still remain as the world's most important source of energy in the next decades. The oil sector, as a multi-billion dollar industry, will simply continue to produce oil for the global consumption.

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Ali Ghalambor was an American Petroleum Institute endowed professor and is the author of the “Natural Gas Engineering Handbook.” For more related content about the oil and gas extraction industry, follow this Twitter page.

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