United States of America

BHP Billiton Petroleum (Americas) Inc

1360 Post Oak Boulevard Suite 150
Houston TX 77056-3020
Tel: (1 713) 961 8500
Fax: (1 713) 961 8400
United Kingdom
BHP Billiton Petroleum Ltd
Neathouse Place
London SW1V 1LH
Tel: (44 20) 7802 7000
Fax: (44 20) 7802 7557
Australia
BHP Billiton Petroleum Pty Ltd
Central Park
152-158 St Georges Terrace
Perth WA 6000
Tel: (61 8) 9338 4888
Fax: (61 8) 9338 4899
Printed June 2006

SPEAKING OIL&GAS

bhpbilliton.com

SPEAKING

OIL&GAS
Written for BHP Billiton Petroleum Pty Ltd
by Rick Wilkinson

SPEAKING

OIL&GAS
Written for BHP Billiton Petroleum Pty Ltd
by Rick Wilkinson

First published by BHP Petroleum Pty Ltd as Speaking of Oil in April 1988
Revised as Speaking of Oil & Gas in June 1995 and November 1997
This edition revised as Speaking Oil & Gas and published by
BHP Billiton Petroleum Pty Ltd in June 2006
BHP Billiton Petroleum Pty Ltd in 1988, 1995, 1997, 2006
ISBN 0-646-45386-6
Printed in Australia

The cover is printed on 250 gsm Impress Silk which is produced in European mills with full ISO 9001,
ISO 14001 and Eco Management and Audit Scheme (EMAS) certification. Primary fibre is sourced from
sustainable forests and all pulp used is either Elemental Chlorine Free (ECF) or Totally Chlorine Free (TCF).
The text pages are printed on 130 gsm Revive Silk, the only Australian made coated paper that uses
35% recycled fibre. Fibre is sourced from ISO 14001 certified plantations and suppliers, and is bleached
using TCF and ECF technology.

Contents
Foreword

iv

Introduction

Chapter 1.

Geology

Chapter 2.

Surveys

18

Chapter 3.

Drilling

43

Chapter 4.

Evaluation & Production

69

Chapter 5.

Permits

91

Chapter 6.

Public Reports & Reporting

102

Chapter 7.

Taxation, Pricing & Marketing

110

Chapter 8.

Health, Safety, Environment

& Community

129

Economics

148

Chapter 10.

Downstream Processes

155

Appendix 1.

Petroleum Specialists

163

Appendix 2.

Conversion Factors

167

Glossary

170

Chapter 9.

INTRODUCTION

iii

Foreword
BHP Billiton Petroleum Pty Ltd is a subsidiary of natural resources
company BHP Billiton. BHP, as it was then known, began in the petroleum
business during the late 1950s when it gained title to explore a vast area
of what was then frontier territory in Bass Strait, a stretch of ocean off
southeastern Australia between Victoria and Tasmania encompassing three
offshore sedimentary basins. In the second half of the 1960s BHP Billiton
participated in an amazing run of discoveries in one of these basins the
Gippsland Basin which catapulted the company to the forefront of
Australias oil and gas industry.
With Bass Strait as a stepping stone, BHP Billiton has expanded rapidly
over the last 40 years to become Australias biggest and most successful
petroleum company, both at home and overseas, with interests and
activities in a number of countries. In the 2005 financial year, BHP Billiton
produced 119 million barrels of oil equivalent (combined oil and gas) or
about 326,000 barrels of oil equivalent per day. In June 2005 the company
had proved reserves of 1407 million barrels of oil equivalent, and average
reserves replacement for the three years 20022005 stood at 99 per cent.
In order to aid public understanding of the petroleum business,
BHP Billiton commissioned journalist/author Rick Wilkinson1 to compile
a handbook explaining the technical and regulatory aspects of the
search for, and production of, petroleum in Australia. The book was first
published in 1988, then again in 1995 and 1997.
This revised 2006 edition brings the reader up to date with the latest
technical advances and expands its coverage to include the key fiscal and
regulatory petroleum regimes around the world.
1.

iv

Rick Wilkinson is the author of a number of books about the petroleum industry,
including: A Thirst for Burning the story of Australias oil industry; Where God
Never Trod Australias oil explorers across two centuries; Well, Well, Well behind
Australias wildcat names; and Once Upon a Wildcat images from Australias
petroleum story.

SPEAKING OIL & GAS

Introduction
Petroleum is among the minerals that have been used by man since earliest
times, certainly prior to metals and coal.
Names like Sweat of the Devil and Shining Water were coined by
primitive peoples who made use of the unusual surface occurrences.

The use of petroleum during the ages

INTRODUCTION

The word petroleum is derived from the Greek word petros, meaning
rock, and the Roman word oleum, meaning oil.
Earliest uses included caulking boats, fuelling lamps and preserving
mummies. Written reports on petroleum come from as far back as 4000 BC
and its use is well documented from countries as far apart as Egypt, China
and Mexico.
The modern era can be traced back to Edwin Drakes 1859 discovery well
in Pennsylvania, yet it is only in the last four or five decades that there has
been any real understanding of petroleum geology.
The technology to begin perfecting the search for, and exploitation of, oil
and gas has an even shorter history and there are still numerous questions
to be answered satisfactorily. Nevertheless petroleum has progressed from
humble beginnings to be a cornerstone of civilization and the key element
in an international industry.
There are signs that it will continue to be a major source of the worlds
energy well into the 21st century.

SPEAKING OIL & GAS

Chapter 1. GEOLOGY
Sedimentary basins
Sedimentary basins are fundamental to petroleum geology because most
of the worlds commercial oil and gas fields have been found within
them. The basins develop over tens of millions of years and gradually fill
with fragmented material which hardens into rock layers within which
petroleum is formed and trapped.
Normally the history of a basin begins with subsidence of the land which
allows an invasion by the sea. Surrounding mountains and hills are slowly
eroded by wind, rain and ice, aided by the internal stresses caused by heat
and cold. Particles of rock are gradually washed down streams and rivers.
These particles will be deposited as the rivers lose energy in a number of
environments such as lakes, the sea or deltas.
A phase that occurs early in the history of the basin is transgression, where
the sea extends over the land. As time goes by, the amount of sediment
brought by rivers increases and begins to overtake the incoming sea.

GEOLOGY

Eon Era

Period

Epoch

Age*

Recent

0.015

Record of Life

Quarternary

CAINOZOIC

Pleistocene 1.8
Pliocene

5.0

Miocene

24.0

Oligocene

37.0

Eocene

53.5

Paleocene

65.0

Man
Angiosperms
Grasses
Eucalypts

Marsupials

Tertiary

Cetaceans
Starfish
Conifers

Foraminifera

MESOZOIC

PHANEROZOIC

Birds

Cretaceous

135

Jurassic

195

Chelonids

Echinoids

Sponges

Dinosaurs

Ferns

Triassic

235

Permian

290

Ostracods

Pelecypods Amphibians Insects

Crinoids

PALAEOZOIC

Cycads

Plesiosaurs

Carboniferous

345

Devonian

410

Bryozoa

Sharks

Brachiopods

Silurian

Ammonoids
Baragwanathia
(land plant)

Nautiloids

Corals

Ordovician

Lepidodendroids
Fish

Stromatoporoids

435

Glossopteris
Equisetales

490
Graptolites

PROTEROZOIC
ARCHAEAN

PRECAMBRIAN

Gastropods

Cambrian

570

Late

1400

Bacteria
Algae
Conodonts

Middle

1800

Early

2300

Trilobites

Jellyfish

>3800
(greatest age
so far measured)

Worms

Archaeocyathids

Indicates forms extinct

All other forms range to the present
* Age at base of period or epoch
in millions of years

The geological time-scale

Courtesy of Geoscience Australia

SPEAKING OIL & GAS

The subsidence fills, so that the newly arriving material is distributed

around the edges to form mud banks, beaches and deltas at the river
mouths. Slowly the shoreline builds up, pushing the sea back in a phase
known as regression.
Such a period of transgression and regression is called a sedimentary cycle
and there are many such cycles during the formation of a sedimentary
basin. Layer after layer of sediment is deposited and compressed by the
increasing weight of material above to form sedimentary rock.
The layers themselves will vary in composition sand grains form
sandstone, fine muds form shale, broken corals and shells form limestone.
At times whole coral reefs fringing the coastline are buried, giving a hard
core of limestone surrounded by sandstone and shales.

A rock is porous when it has many tiny spaces, or pores

A rock is permeable when the pores are connected

GEOLOGY

In other locations a nearby volcano may erupt and ash is deposited,

forming a rock known as tuff. At times a basin may be cut off from the sea
altogether to form an inland lake. Vegetation surrounding the still waters
dies, rots, is deposited, buried and compressed with other sediments and
may eventually form seams of coal.
The rocks formed in the basin have varying degrees of porosity and
permeability and the coincidence of these two properties is one of the keys
to petroleum accumulation. A rock is termed porous if it contains voids
and cavities between individual grains. It is permeable if the voids are
connected so that fluid can flow through the rock.
Studies of sedimentary basins suggest petroleum is generated mainly in
fine-grained shales or limestone on top of the more permeable part of a
transgressive sequence, and below the more permeable part of a regressive
phase. The more permeable rock is often associated with the near-shoreline
environment and it is the minor fluctuations within transgressive and
regressive phases that bring the potential source rocks and potential
reservoir rocks together.

Crude oil
Crudes vary widely in appearance and consistency from field to
field, ranging from thin yellow-brown mobile liquids to black viscous
semi-solids. However they all consist essentially of hydrocarbons which
are combinations of carbon and hydrogen atoms.
Classification is based on composition and is grouped into three main
types paraffins, asphalts and mixes.
Paraffin-based crude is chiefly composed of isomers of paraffin and
when distilled it leaves a residue of wax. Crudes of this type usually
give good yields of high-grade lubricating oils.
Asphalt-based crudes are mainly composed of naphthenes and very
little paraffin. When distilled they leave a solid asphalt residue. Crudes
of this type yield lubricating oils with viscosities that are more sensitive
to temperature than paraffin-based crudes.

SPEAKING OIL & GAS

 Mixed-base crudes, as the name suggests, contain substantial

proportions of both paraffin wax and asphaltic matter along with some
aromatic hydrocarbons.
There is considerable overlapping of these types and most crudes also
contain a variety of impurities. Hydrogen sulphide and sulphur are the
most common and the most problematic to the environment, and to the
cost of production/refining. Other impurities include carbon dioxide,
nitrogen, oxygen and some trace metals.
A yardstick for comparing crude oils is the API gravity (API stands for
American Petroleum Institute). This value, which has been adopted as an
industry standard, is actually a measure of density and is related to specific
gravity using the formula:

API gravity (degrees) =

141.5

- 131.5

specific gravity
(at 60 F)

So, an API gravity of 10 degrees is equivalent to a specific gravity of one.

The less dense the oil, the higher the API gravity, hence high gravity
oils are known as light crudes and low gravity oils are heavy crudes.
Australian and North Sea crudes tend to vary between 35 and 45 degrees
API, whereas Middle Eastern crudes tend to be between 16 and 20 degrees
API.

Natural gas
Natural gas is a mixture of gaseous hydrocarbons. It is mostly paraffinic
and consists mainly of the simplest hydrocarbon, methane. It may also
contain smaller amounts of ethane, propane, butane and some pentane, as
well as impurities like sulphur dioxide, carbon dioxide and inert gases like
nitrogen and helium.
Natural gas is generally found in conjunction with oil in a reservoir, but it
can also be found on its own.

GEOLOGY

Liquefied Natural Gas (LNG)

LNG is made by simply reducing natural gas to a liquid by cooling it to
minus 161 degrees Celsius. This reduces the space natural gas occupies by
more than 600 times, making the product easier to transport and store.

Liquefied Petroleum Gas (LPG)

The hydrocarbons propane and butane are gaseous under atmospheric
conditions, but they can be easily liquefied by slight cooling and/or
compression. The resultant LPG is used as a motor fuel and an industrial
fuel as well as for domestic and commercial purposes.

Condensate
Fluids are contained in subsurface reservoirs at very high pressures and
temperatures. This pressure is released and temperature lowered as
the fluids are brought to the surface. Some of the gas content naturally
condenses into a liquid during the journey and the resultant liquid is called
condensate. At normal temperatures and pressures condensate is a light oil
that can be refined into petroleum products and is therefore sold in the
same way as crude oil. Wet gas contains significant amounts of condensate,
dry gas does not.

Petroleum formation
Most petroleum geologists believe that oil and gas originate from organic
matter of both plant and animal remains when it accumulates rapidly
in fine-grained sediments under conditions of quiet deposition and
a deficiency of oxygen.
The best pointer to the source material is the occurrence of porphyrin
pigments and nitrogen in petroleum itself. The only known source for
porphyrin pigments is the red colouring matter of blood (hemin) and
the green colouring of plants (chlorophyll). Nitrogen is the essential
component of amino acids which are basic components of animals
and plants. Thus the conclusion is that plants and animals are the main
source material for petroleum.

SPEAKING OIL & GAS

An older and less popular theory proposes an inorganic origin which

suggests petroleum hydrocarbons originate from volcanic gases, or even
a simple reaction of carbon dioxide, water and catalysts with sunlight.
Evidence for these theories is provided by methane gas which is found
in volcanic gases as well as within the atmosphere of stars and in
metamorphic rocks.
However the organic origin has by far the greatest following and
geochemical studies indicate that petroleum is generated during the
burial of sediment in a sedimentary basin. With increasing depth of burial
the temperature of the source rock rises and, at a given heat value, the
organic matter (referred to as kerogen) transforms into oil and gas. It is then
driven from the source rocks during compaction in a movement known
as migration.
The critical temperature at which crude oil is formed is generally in the
range 110130C. Oil is produced in the initial generation period, while
gas forms at greater burial temperatures. Ultimately a source rock will be
burnt out if temperatures become too high. A source rock is mature when
petroleum generation has begun, and post mature when it is burnt out.
The area containing mature source rocks is often called the hydrocarbon
kitchen.
Geochemical evidence also suggests that conditions favourable for
significant petroleum generation normally do not occur above burial
depths of around 1500 metres from the surface, although some instances
of a threshold depth of 600 metres have been found.
Indications are that the chemical changes are brought about by the
combined effects of temperature, time, pressure and also catalysts in the
source rock, as well as in the rocks through which the petroleum moves.
The petroleum may undergo further changes via all these factors after
entrapment.

GEOLOGY

Petroleum migration
A vast majority of pores and cavities within rocks below the water table are
filled with water. The balance may be filled with other liquids and gases.

Oil migration

The migration of oil and gas from a source rock to a reservoir rock is
related to hydrology, fluid pressures and water movement. The rate of
water movement may be small and measured in mere centimetres per
year, but the effect of the hydrodynamic conditions can be very important
to the movement of petroleum through the rocks. Migration is split into
two types primary and secondary.
The primary phase refers to movement from the petroleum source to
the reservoir. The oil and gas that has been generated and trapped in
pore water is squeezed out during compaction of the rock. In this process
the petroleum tends to enter only the larger pores because there is less
displacement pressure needed than there is to enter smaller pores.
The secondary phase of migration takes place within permeable rocks
and can be either lateral or vertical movement.

10

SPEAKING OIL & GAS

Once in a reservoir, gas and oil, being less dense than water, tend to move
upwards. The upward movement continues until the hydrocarbons are
restrained by a fine-grained, relatively impermeable layer. They can then
follow the bottom of this layer until they either reach the surface where
they form seeps, or they reach a position from which they cannot move
further and are trapped.
The path of migration may cover tens or hundreds of kilometres and much
recent study has been done to try and relate the size of the hydrocarbon
kitchen, and hence the volume of hydrocarbons likely to be produced, to
traps in the surrounding areas. For instance, if the kitchen is small, it is
probable only the nearest traps will be oil bearing. If the kitchen is large
and deep, gas may have replaced the oil in traps closest to the generation
point and this oil may have been forced into more distant traps. It is also
known that oil is often released from a source rock in periodic pulses like
a slowed down geyser. Time and migration can change the hydrocarbons
such that different types of oil may be found in different traps along the
migration path even though they all came from the same original source
rock.
The characteristics of reservoir rocks and the types of hydrocarbon
entrapments are at the heart of the petroleum exploration and production
industry.

Petroleum reservoirs
Any rock that has sufficient porosity and permeability to contain significant
volumes of hydrocarbons is considered to be a reservoir rock. The porosity
may occur between grains, within grains, or in joints and fractures. Porosity
and permeability may be original or they may be due to alteration during
burial or by later earth movements like faulting and folding. Sandstones
and carbonates (limestone and dolomite) are the most common
reservoir rocks.
The range of porosity in reservoir rocks is between one per cent and
40 per cent, while permeability can vary between less than one millidarcy
and more than 1000 darcies. The textbook commercial oil reservoir will

GEOLOGY

11

have a porosity of 20 per cent or better and a permeability of more than

100 millidarcies. Gas production has lower requirements. However, there
are many exceptions to the norm. Some reservoirs have little pore space,
but contain oil and/or gas in fractures and fissures. Others have good
porosity, but permeability is too low for production and they are produced
via fractures. Permeability can also be stimulated artificially by mechanical
or chemical fracturing.
Most reservoirs have marked differences in permeability from one layer
to the next and, if they are produced too quickly, the hydrocarbons
will only flow from the highly permeable layers. Oil or gas in the finer
grained sections will be cut off by rising water and therefore be lost to
production.
The most important characteristic for production, however, is the thickness
of the reservoir. Some are massive homogenous sands, while others
are thin stringers of sandstone interspersed with impermeable layers of
other material. Thus the term net pay (total thickness of all the permeable
layers), as opposed to gross pay (total thickness of the whole reservoir
zone including both impermeable and permeable layers), is important in
reservoir assessment.

Petroleum traps
Traps are generally grouped into three major categories structural,
stratigraphic, and a combination of structural and stratigraphic.

Structural traps
The simplest structural trap is one formed by the folding of rock layers into
a dome or elliptical dome shape and is known as an anticline or an anticlinal
trap. It is virtually a buried hill and contour lines drawn in a plan view
of the structure will be roughly circular or elliptical. Hydrocarbons may
migrate into this structure from all sides, accumulating in the top where
an impervious roof formation, called a cap rock or seal, brings migration
to an end.

12

SPEAKING OIL & GAS

Anticlinal traps and spillpoints

The structure is rarely that simple in practice and it is usually complicated

by faulting, complex secondary folding and changes of porosity within
the reservoir. Up to 50 separate reservoirs have been recorded in some
anticlinal traps.
A fault trap is formed when a fault plane (a line of displacement of the
earths crust) interrupts the direction of migration of hydrocarbons.
The accumulation occurs when the oil or gas is prevented from proceeding
up-dip by fine-grained material in the fault itself, or by an impermeable layer
adjacent to the reservoir on the other side of the fault.
However, entrapment will only occur if faulting pre-dates hydrocarbon
generation and migration, and if the fault completely truncates and seals
the reservoir. Some faults do not seal effectively and can become conduits
or escapes for hydrocarbons into higher formations, or even the surface.
Often a fold component is present with faulting.

GEOLOGY

13

Trap in dipping strata formed by fault plane

Salt layers have the ability to flow plastically at relatively low temperatures
and, at depth, they are often less dense than the immediately overlying
sediments. Because of this gravitational instability, salt tends to rise
vertically, punching its way through the overlying sedimentary column.
The so-called salt dome structure that is produced provides a number
of trapping mechanisms including faults and anticlines at the head
of the structure, against the impervious flanks of the salt column itself
and against the truncated, overturned or faulted layers along the flanks.
Salt dome traps are common in the Gulf of Mexico petroleum province.

Stratigraphic traps
Stratigraphic traps are defined as those in which the reservoir is sealed due
to depositional or alteration processes rather than structural movements of
the earths crust. They are more difficult to find, but when discovered they
have provided some of the largest fields in the world.

14

SPEAKING OIL & GAS

Salt dome traps

Stratigraphic traps: organic reef embedded in shale, and wedged-out sand

GEOLOGY

15

A common stratigraphic trap is a buried coral reef which is sealed by the

surrounding claystones and shales. Often the reef itself has extremely
high porosity and permeability and can give prodigious flow rates when
tapped. The Leduc field in Alberta, Canada is an excellent example.
Another type occurs as a truncation, formed when erosion planes an
exposed land surface and sediments are deposited directly on top during
a later phase of the sedimentary cycle, thus sealing the older rocks. Where
there is marked angular difference between the older and newer rocks, the
contact is said to be an unconformity.

Unconformity or truncation traps

16

SPEAKING OIL & GAS

A further type of stratigraphic trap can occur when sandy river beds, deltas
or beaches become buried as sand lenses. They form traps when they are
surrounded by finer grained impervious sediments. Changes in the type
and appearance of rocks (such as grain size) occur frequently in regressive
and transgressive sediments. For instance, coarse grained sand is deposited
in shallow waters, but the fine sediments are lighter and are carried further
to be deposited in deeper waters. Thus a porous sandstone may gradually
shale out, i.e. change into an impervious shale or siltstone.

Combination traps
Combination traps are those formed by both stratigraphic and structural
means. In these cases the structure, whether it be a fault, anticline or just
regional dip, does not form the trap alone. It must be associated with a
stratigraphic component, such as a facies change or a truncation.

Types of oil and gas traps

GEOLOGY

17

Chapter 2. SURVEYS
An accumulation of oil and gas is the product of a whole series of chance
events, including the presence of a source rock, burial of the source rock,
a reservoir and a trap in the right geometrical and historical relationships.
Predicting if and where all these critical events have occurred in the
correct succession is no simple matter, and it is certainly not foolproof.
Nevertheless, the petroleum industry has built up a series of survey
techniques to minimise the risks and delineate bona fide targets.

Field geology
The traditional method of finding oil was by mapping the surface geology
and studying the relationships of the various rock units. Efforts were
concentrated on mapping visible structures and potential reservoir rocks
in areas that had some indication of hydrocarbons like surface seeps.

18

SPEAKING OIL & GAS

Petroleum exploration onshore still begins with a scrutiny of field geology,

aiming to understand and predict the types of rock that might be expected
in the subsurface, in prospects outlined by sophisticated geophysical
means. Often the geological survey will begin with a review of large scale
maps of the region and all previous smaller scale maps drawn, and reports
written about specific areas of interest. This will be collated with aerial
photographs and satellite imagery of the region in question. Geologists
identify the rocks in outcrop and, if possible, map the boundaries of rock
units along with any subsurface structural features. Even when the potential
targets are offshore, it is often useful to sample and study rock outcrops
on land that dip down under the ocean. More recently, the combination of
electronic and seismic surveys and computerisation has enabled explorers
to map and construct models of the subsurface in great detail and display
these on the computer screen, in an effort to understand the formation and
detect the presence of potentially petroleum-bearing features.

Geophysics
The principle behind geophysical surveys is to identify a contrast to the
general background of data taken from a given region. In other words,
the geophysicist is looking for an anomaly in relation to the surroundings.
Usually the geophysical data is presented and analysed as some form
of image.

Non-seismic techniques
Gravity surveys
Gravity surveys aim to detect large-scale subsurface structures by means
of the disturbance they produce in the earths gravitational field at ground
level. The technique involves measuring the force of gravity at points
on the earths surface or alternatively by measuring gravity gradient
data via airborne means. Variations in gravity are caused by changes in
the mass (hence the density) of subsurface rocks in the vicinity of the
measuring point. The gravity survey attempts to detect these variations
in gravitational pull.

SURVEYS

19

MILLIGALS

TRAVERSE DISTANCE

MILLIGALS

Gravity anomalies relate to geological structure. High values caused by dense rocks
near surface

TRAVERSE DISTANCE

Gravity anomalies relate to geological structure. Low values caused by light rocks
near surface

20

SPEAKING OIL & GAS

Because density usually increases with depth, a structural uplift generally

brings denser rocks nearer to the surface and laterally adjacent to less
dense sediments. Such uplifts are usually associated with higher gravity
readings than the surroundings although, in the case of salt domes whose
very reason for rising is their low density, it will be marked by low or
negative readings in relation to the surroundings. Gravity techniques were
first developed for detecting salt domes in the Gulf of Mexico region.
Station heights and water depths (in the case of offshore work) have to be
accurately known, as does data on rock densities in the area under study,
so that corrections can be made for elevation and terrain topography.
Corrections are also made for latitude (the earths rotation and bulge
at the equator produce an increase in gravity with latitude), earth tides
caused by the sun and the moon (they depend on latitude and time) and
density variations in the earths crust (which is generally more dense
below oceans and less dense below land). The gravity measurements are
then plotted on maps (nowadays on computer screens) and equal values
are contoured with lines called isogals. If all the reductions have been
made correctly, the resulting map should reflect only gravity changes
due to subsurface geological structure. The modern techniques produce
contrasting colourations on-screen that clearly highlight the lighter and
denser material.
Historically, detailed gravity surveys were conducted on the ground, using
a helicopter in rugged terrain, or on a ship. Because of the large and rapid
changes in acceleration from aircraft movements, airborne gravity surveys
were not as reliable or accurate. However, with the development in the 1990s
of the FALCON airborne gravity gradiometer system by BHP Billiton (from
US Navy technology), fast, cost-effective and detailed gravity surveys can
now be acquired over large areas by aircraft. Where ground surveys may
take months or years in very difficult areas, a FALCON survey can be
completed in a few days.
Since the new millennium, satellite gravity data (originally developed for
military purposes) has been available for all oceans of the world and is
now used extensively by petroleum companies for exploration of offshore

SURVEYS

21

Surface vs Airborne Gravity

About FALCON
FALCON is an airborne gravity gradiometer (AGG) that measures minute changes
in the earths gravity. This technology has enormous benefits and gives BHP Billiton
a unique competitive advantage in the search for mineral and hydrocarbon deposits.
This competitive advantage is backed by BHP Billitons unique value-added processing
and interpretation capabilities.
Three AGG systems have been built to date, and are currently operational in Cessna
Grand Caravans.
*BHP Billiton has 10.5 exclusivity years for mineral exploration and 10 years exclusivity
for hydrocarbons, beginning October 1999. This means Lockheed Martin cannot
build this technology for other parties during this period.

22

SPEAKING OIL & GAS

regions. The technique compares differences in sea levels and is based

on the fact that the shape of the sea surface is controlled by the earths
gravitational field. Ridges and trenches on the ocean floor create variations
in the height of the sea level and they can still be detected when corrections
have been made for the effects of winds and currents. When a variation in
sea level is detected where there is no rise or fall in the sea bed topography,
then the anomaly causing the variation is under the sea bed. The data is
then subjected to editing and image enhancement to produce colour maps
of the structural composition of the earths upper crust.
In summary, gravity surveys are a useful primary exploration tool that can
detect the gross outline of a basin, its structure and the depth to basement.
It can also detect major faulting and folding, salt domes and shallow reef
structures within the basin sediments.

Magnetic surveys
Magnetic surveys are similar in data acquisition and presentation to gravity
surveys and the two techniques are often conducted together. The method
depends on the fact that most rocks contain small, but significant amounts
of ferromagnetic minerals like magnetite, ilmenite and pyrrhotite. Rocks
therefore have a weak magnetism which is partly induced by the earths
magnetic field and partly permanent. Thus a magnetic survey measures
local variations in magnetic field.
The most important fact in magnetic exploration for petroleum is that
sedimentary rocks are nearly non-magnetic and have a very small response
compared to basement rocks and intrusions of volcanic and igneous rock.
Thus a magnetic anomaly generally indicates a lack of sediments and the
survey technique is used to rule out areas that are of no interest for the
petroleum explorer. They are particularly useful in outlining the regional
framework of sedimentary basins. Recent advances can also give an indication
of faulting (because magnetic minerals are often concentrated in a fault plane)
and individual structural elements within a basin.

SURVEYS

23

Satellite Gravity East Indonesia

Australian Continental Shelf

Satellite-derived Bouguer gravity for East Indonesia. Land areas are white, gravity
values increase from blue to red. Dark blue area (left centre) is the Weber Deep
water depth in excess of 7000 metres.
Satellite gravity image courtesy of GETECH, University of Leeds

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SPEAKING OIL & GAS

Once again, salt domes provide an opposite reaction. Salt is diamagnetic

and tends to oppose the field that is polarising it. This results in a magnetic
low.
Magnetic surveys can be conducted on the surface using land vehicles or
ships, but the most common technique for a more complete coverage is by
air generally flying at heights of 60 metres above ground and 80 metres
above sea. Accurate positioning and elevation are critical a need answered
by todays extremely accurate positioning systems and satellite navigation
systems. Corrections can also be made for the high speed flight.
As with gravity, image enhancement and contrasting colouration can now
produce visually strong maps of the structural elements of an area under
study.
In summary, magnetic surveys are a useful primary exploration tool that
can detect the gross outline of sedimentary basins as well as the depth to
basement, basement faulting, the presence of volcanics such as sills and
dykes and mineralised alteration zones sometimes due to the presence of
salt domes and hydrocarbons.

Geochemical surveys
Geochemical surveys are often undertaken in conjunction with other
survey techniques. Exploration geochemistry follows a path that begins
with characterising oil or gas samples taken from wells, or seeps.
In the marine environment seeps (small oil slicks on the surface of the
sea) may be detected by airborne or satellite imagery and attempts can
be made to obtain core samples (known as drop cores) by dropping core
barrels into the sea bed at that location. The samples are analysed and
grouped into types of hydrocarbons. Even in seeps where weathering of
the hydrocarbons may have taken place, detailed analyses can identify the
original hydrocarbons.
Once samples have been classified into hydrocarbon families the
geochemist tries to correlate them back to source rocks in the basin.
The data is built up into a computer model which is then tested in the field.

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25

For instance, if the presence of hydrocarbons has been detected, sampled

and traced back to source in an area, the model can be used to predict
migration paths (sometimes referred to as the basins plumbing) and
point to parts in the basin where it would be worthwhile to look for traps
with larger holding capacity. If there are no pre-existing wells or seeps to
sample, analogues from another basin with similar or linked geological
systems are often used to indicate where the same set of circumstances
may be repeated. Most software for this work is available for PCs and the
computer programs are off-the-shelf products. Geochemical modelling is
an increasingly accessible tool for petroleum explorers.
Geochemistry can also be used directly in an area where a number of
prospects have been delineated and there is little to choose between them
in size or potential. The exploration company may decide to begin by
drilling the ones that have a corresponding geochemical anomaly, or ones
that modelling predicts have a higher chance of containing hydrocarbons.
The investigation used is basically one of hydrocarbon gas detection.
Despite the fact that an oil or gas reservoir is sealed in a trap, there is still
some minute leakage of gas through the rocks to the surface.
The usual method of detection on land is to drive a hollow probe into the
ground to a depth of a metre or so and draw off gases present at that depth
through the seal at the top of the probe using a syringe. The sample is then
analysed in a gas chromatograph. Any hydrocarbon values above normal
background levels constitute an anomaly. Airborne methods are also
used (albeit less commonly in recent years) both on and offshore where
a chromatograph in a low-flying aircraft is employed to detect gas halos
emitted from subsurface structures.

Satellite imagery
The use of satellites in petroleum exploration has mushroomed in recent
years, particularly in connection with geographic positioning, navigation
and communications. But explorers have also found a niche in terms of
satellite imagery where it is now possible to obtain very high resolution
through the light spectrum. This can be used to present very detailed and

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SPEAKING OIL & GAS

accurate pictures showing bathymetry and topography. Landsat pictures

can provide resolutions up to 30 metres on the ground incorporating
eight spectral bands. The high resolution is useful in the study of modern
depositional processes such as the formation, shape and extent of deltas to
use as analogues for planning programs to explore the potential of subsurface
deltaic sand reservoirs within buried coastal sediments.
Satellite imagery can also be used to detect offshore oil seeps. This is a
visual technique and is based on light reflected back off the water surface.
If there is cloud cover, radar can be used. This detects patches of smooth
water that may be caused by oil on the sea in an otherwise rough water
surface (rough water scatters the rays and presents a foggy image). Using
several satellites, explorers can home in on the possible source of the seeps.
This technique has been tried with some success in the Gulf of Mexico.
The method can also be used for environmental monitoring, although care
needs to be taken to filter out effects from false positives like algal blooms.

Radiometric surveys
Gamma ray spectrometer surveys are used to detect radiation emanating
from concentrations of uranium and thorium which may be associated
with hydrocarbons. Detection of subtle radiation patterns and anomalies
may indicate surface hydrocarbons which, in turn, may point to
subsurface accumulations.
The earths crust contains uranium, thorium and potassium randomly laid
down during the formation of the planet. These elements emit gamma
rays in the course of radioactive decay and contribute to the earths
natural radiation background. Of the three elements, uranium is the
most mobile, being water soluble and easily transported by groundwater.
However when the uranium encounters organic matter, such as subsurface
hydrocarbons, the ion becomes insoluble and immobile. Hence higherthan-background readings of gamma rays may indicate the presence of a
hydrocarbon trap.
The anomalies can be identified by airborne radiometric measurements
using a spectrometer.

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Controlled electro-magnetic (EM) surveys

Controlled electro-magnetic (EM) surveys, recently developed for marine
petroleum exploration, involve sending low frequency electro-magnetic
signals into the sea bed and measuring the response to determine the
resistivity of the subsurface.
The Controlled Source Electro-Magnetic measurements (CSEM) method
uses an electric dipole source to transmit low frequency electro-magnetic
signals to a series of receivers on the sea bed that measure the electromagnetic field at the sea floor. As the source is towed over the receivers the
variation and phase of the received signal indicates the resistivity of the
subsurface structure down to depths of several kilometres.
The Controlled Source Audio-frequency Magneto Telluric method (CSAMT)
uses an artificial signal source (usually in the range of 0.1Hz10kHz) in
addition to naturally occurring electro-magnetic source fields to determine
the resistivity of the subsurface. This provides a stronger, more reliable
signal and enables imaging of shallower targets than is possible with low
frequency natural signals alone.
Both these technologies are increasingly being employed during the later,
more detailed phase of exploration work to provide complementary
information to conventional surveys and attempt to identify the fluid
content in defined reservoirs. They use the fact that there is a significant
contrast between resistive hydrocarbon-saturated reservoirs and the
surrounding more conductive layers saturated with saline water.
Electro-magnetic techniques can also be used to define the lower boundaries
of salt bodies. Conventional seismic surveys generally outline the top of
such structures, but the diffuse scattering of signals in the lower layers due
to the presence of carbonates or basalts or even other thin salt blankets
often clouds the picture. The resistivity contrast between such layers and
the sediments below can be identified using the EM methods. By studying
the variation in response as a function of frequency, the variation in
resistivity as a function of depth can be determined.

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Overall, the improvements to all non-seismic survey techniques in recent

years include better instrumentation, the advent of extremely accurate
global positioning systems, improved computing power and processing
algorithms, advanced visualisation techniques such as image enhancement
and 3D visualisation and the ability to combine different data sets.
All these techniques can high-grade areas for a more detailed examination
through seismic survey work.

Seismic techniques
The principal method geologists use to explore the subsurface, besides the
direct and expensive process of drilling, is through the use of sound waves.
Sound waves travelling through the earth are called seismic waves, a term
originally used in reference to earthquakes. Just as ultrasound is used to
investigate the shapes of organs within the human body, seismic waves
are used to map out the geologic structures of the earth. While ultrasound
penetrates a few centimetres into the body using very high frequency
(short wavelength) sound waves, seismic surveys use lower frequency,
longer wavelengths to look many kilometres into the earth.
There are two types of seismic survey: refraction and reflection. Refraction
surveys were common early last century for reconnaissance and salt dome
exploration. They are seldom acquired nowadays, except for deep crustal
studies, because seismic reflection surveys provide far greater information
and accuracy for hydrocarbon exploration.
A controlled pulse of sound is sent into the ground and a range of detectors
are used to pick up the reflected waves as they come back to the surface.
In marine environments the main source of sound energy is an airgun
array a group of pistons which let out a pulse of compressed air.
Typically this will be two or three litres in volume at a pressure of 2000
pounds per square inch (psi).

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Seismic survey diagram showing typical reflection and refraction wave patterns

Typical marine seismic reflection survey

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On land, vibrating trucks send out a controlled sweep of sound between six
and 16 seconds long. This technique, which sends the vibrations through a
large metal plate pressed onto the ground, has largely replaced the older
method of a dynamite charge set off a few metres down a specially drilled
shothole. By spreading the energy over a longer period of time (many
seconds as opposed to a fraction of a second) the same amount of energy
can be used without damage to the local environment. Seismic surveys
have even been conducted on the Champs Elyses in Paris using a fleet of
vibroseis trucks without danger to life, limb or architectural heritage.
When planning a survey, the geophysicist carefully sets the geophone/
hydrophone spacing to provide the required subsurface information.
For instance, the maximum offset (the distance from the energy source to
the furthermost group of phones along the grid line or the streamer) should
be comparable to the depth of the deepest zone of interest. Conversely, the
minimum offset should be comparable to the depth of the shallowest zone
of interest.

Vertical section of 4-fold common depth point shooting

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31

Average P-Wave Velocities

Material

Velocity
feet/second

Weathered surface material

metres/second

1,0002,000

305610

Sea water

4,8005,000

1,4601,530

Sandstone

6,00013,000

1,8303,970

Shale

9,00014,000

2,7504,270

Limestone

7,00020,000

2,1406,100

Salt

14,00017,000

4,2705,190

Granite

15,00019,000

4,5805,800

Metamorphic rocks

10,00023,000

3,0507,020

There are three distinct stages in the seismic technique acquisition of

data, processing, and interpretation.

Data acquisition
2D surveys
When exploring a new area where little is known of the subsurface geology,
a 2D survey is usually performed. This consists of survey lines spaced one,
two, five or more kilometres apart.
Offshore the seismic vessel will sail along with seismic guns deployed
close off the stern (so they are near the on-board air compression source),
letting out pulses every 25 metres or so, with a 12 second gap between
shots. Behind the guns is the recording cable (or cables) whose length is
measured in kilometres. The cable contains groups of pressure sensitive
hydrophones which record the sound waves as they are reflected back
from the geological layers. The recordings are a few seconds long and
sampled every 12 milliseconds (thousandths of a second). Sound waves
travel at about 1.5 kilometres per second through water and increase to
26 kilometres per second when they pass through rock layers.

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Aeromagnetics Sulu Sea case history

A 2D seismic survey was to be acquired in an area of known buried volcanic ridges.

Reprocessed aeromagnetic data was used to optimise the layout of the new 2D data
and avoid wasted lines over these ridges.

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33

Onshore the recording devices are called geophones and they are placed
at measured distances along a pre-surveyed seismic line from the shot
or vibration point. Geophones (usually grouped together in arrays, with
three or more connected electrically so that the array acts as a single sound
detector) transform the returned seismic energy into electrical voltage
which is then transmitted by cable to recording equipment housed in a
vehicle accompanying the survey team. Typical seismic records will image
10 or more kilometres down into the earth.
Each time the seismic pulse meets a change in rock properties, for example
going from a shale layer to a sand layer, part of the pulse will be reflected
back to the surface. This is called an event. By measuring precisely the
difference in arrival time of a given event from the nearer and further
hydrophone groups, the velocity of the rock material can be measured.
The seismic measurements are made in time, so if the velocity and time are
known, geophysicists can work out the depth of the event.
A seismic line looks like a cross section through the earth. Initially these are
used to map structural traps where hydrocarbons may accumulate at
its simplest at high points of domes known as anticlines, but also places
where faults or erosion cut off a reservoir. Stratigraphic traps, where the
geology changes laterally from one rock type to another, such as a buried
sandy channel, sand bar, or carbonate reef can also be mapped using
seismic data.
3D surveys
In areas where the larger and more obvious traps are mapped, petroleum
explorers are increasingly using 3D surveys to obtain greater definition.
By placing survey lines much closer together, a more detailed three
dimensional picture can be built.
To economically survey a given area offshore, increasing numbers of
recording cables are being towed behind seismic vessels, with between
eight and 16 cables now the norm. A pair of submerged towed wings pull
the trailing array of cables 50100 metres apart from each other, resulting
in a typically rectangular acquisition system that is one kilometre or more
wide and six kilometres long.

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The demands of deploying tens of kilometres of cables, along with the

ability to repair and replace defective sections of the cables and the
running of large compressors to generate the compressed air for the seismic
sources, mean that seismic vessels have become extremely specialised and
expensive-to-run information factories. A typical 3D survey covering
1000 km2 of ocean will take one or two months to acquire.
Marine operations
The cables stretching back six kilometres or more from the boat are
affected by waves and currents. Depth controllers keep the cable within
a metre or so of the desired depth, typically seven metres below the
water surface. Towing the cable shallower than this makes it more
susceptible to wave-induced noise, while towing deeper results in the
loss of higher frequencies due to ghosting. This latter effect is where
the water surface acts like a reversing mirror to the sound waves.
The surface reflection (or ghost) will cancel out the frequencies of later
arriving reflections. Thus, there is always a compromise between this and
using results from a shallow cable capable of recording higher frequencies
(and hence better resolution) but incurring more swell noise.
Currents displace the cables laterally and while a limited amount of cable
steering is possible, any reasonable current may displace the ends of
the cables by a kilometre or more. As the vessel sails up and down the
survey area, there must be very accurate positioning of the boat and of
each recording hydrophone along the cable. A buoy with a geographic
positioning system is attached to the end of each cable and their position
can be determined to within a metre or two.
When the vessel turns to make a second sweep across an area, there is
always the danger of tangling the cables. Tangles can be difficult and time
consuming to unravel. In bad weather it may not be possible to deploy
a work boat to fix the tangle and the equipment must be pulled back
on board.

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35

Because the seismic boat cannot turn quickly, a support vessel is

normally kept on standby to alert other recreational, fishing and
commercial vessels that a seismic survey is being undertaken.
The support vessel is also used to re-supply the seismic boat with fuel and
consumables.
Crew changes are made every four to six weeks, and this is usually carried
out by helicopter. The typical crew size for a large 3D seismic vessel is
60 personnel, evenly divided between the marine crew and the specialist
seismic crew. Surveying continues day and night, so two shifts are required.
With the larger, more modern vessels, there is enough space for theatres,
gyms, saunas, single or two-person ensuite cabins and life on board is
comparatively comfortable.
Land operations
The logistics of land operations can be a more time-consuming and
expensive task, particularly in mountainous, jungle or remote desert
terrain. In BHP Billitons Algerian desert leases for example, the activities
take place many hundreds of kilometres from the nearest town. Roads must
be made to enable the vibroseis trucks to reach their required locations.
The geophones are laid out at specified locations and the recording crew
ensures the data is acquired correctly. All personnel need to be supplied
with many litres of water a day in summer desert conditions. The base
camp for operations may have hundreds of personnel to keep the seismic
crew operating.
Overall, the emphasis in data acquisition on land or sea is on maintaining
consistency so that changes seen in the recordings result from changes in
geology and not from changes in technique.

Seismic processing
Processing centres are found around the world, but tend to be concentrated
in cities close to exploration activity such as Houston, London and Perth,
Western Australia.

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Seismic trucks, Sahara Desert, Algeria

Sophisticated software and specialised skills are required to turn the raw
recorded data into the final image of the subsurface geology used by the
seismic interpreters to make their drilling decisions.
Amplitude decay sound waves, like ripples in a pond, spread out,
losing energy as they go. The rock layers reflect some of the energy and
absorb preferentially higher frequencies. These factors cause the signal
to decay with depth. The signal can be boosted, but ambient noise is
also boosted.
Diffractions near surface irregularities cause the sound waves
to diffract and scatter, like rain drops on a car windshield scattering
sunlight. Filters must be designed to remove this noise.
Multiples these are a major problem, particularly on marine surveys.
The water surface acts like a mirror, reflecting all the upcoming energy
from the desired rock-layer reflections back down to generate secondary
and tertiary images. In shallower water, trains of multiples are thus
generated. Significant effort is required to predict and accurately
remove these multiples.

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Refraction when a sound wave passes from a material of one velocity

to another it bends or refracts, like light going into water or glass.
The amount of refraction depends on the contrast in velocity. In places
like the Gulf of Mexico, salt bodies have a velocity often more than
twice as fast as the surrounding rock layers. Being irregular in shape,
they can bend the sound waves quite dramatically. It can take months
of work to build an accurate model of the subsurface velocity which is
then used to remove the distortion.
Anisotropy sound waves can travel faster horizontally compared to
vertically due to the layering in the sediments. This causes the sound
waves to bend in an unpredictable way. In some cases the velocity may
also vary with an orientation that is faster in one horizontal direction
compared to another.
Timing errors on land data, differences in the topography and degree
of weathering cause the seismic signal at a given location to be delayed
relative to its neighbours. On marine data, tidal changes during the
survey are enough to misalign the reflection events. Seasonal changes
in water temperature can also influence the data. All these need to be
measured and corrected for.
Migration any non-horizontal reflection will appear mispositioned
in space. The steeper the dip and the greater the distance from surface,
the larger the magnitude of this mispositioning. A process called
migration attempts to reposition the events in their correct locations.
The process is sensitive to the velocity of the sound waves and all of
the above issues need to be addressed before this vital process can
be applied.
Seismic processing software designed to deal with these and other
erroneous effects on the data places high demands on computer resources.
Indeed, the requirements for seismic processing have been a significant
factor driving computer evolution. Some of the pioneering computer
companies were set up by geophysical companies to push the boundaries
of hardware performance. The demands of image manipulation are now
the main drivers of computer hardware and software.

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SPEAKING OIL & GAS

Seismic without interpretation or annotation or wells

Seismic with interpretation

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Seismic acquisition, processing and interpretation probably exceed all

other scientific data collection in terms of the amount of raw data collected.
The demand for increasingly large 3D surveys, more sophisticated processing
sequences and shorter turnaround time means that the traditional tape-totape processing is being steadily replaced by huge volumes of disk space
measured in terabytes (1000 gigabytes) and petabytes (1000 terabytes).
The sheer volume of seismic data meant that literally truckloads of
seismic tapes were used in the past to transport the data from acquisition
to processing centre. Modern disk media hold vastly more data than
previously, however it will be a while before there is an end to tapes as a
storage and exchange media.

Seismic interpretation
The final processed data is generated as a number of three dimensional
volumes and turned over to a team of specialists for analysis.
Interpreters map key horizons.
Seismic stratigraphers infer the depositional environment from the
shapes of the geological bodies.
Structural geologists recreate the structural history of the data by
examining the relative positions of faults, unconformities and in
some places the shape of the salt bodies. Salt, being lighter than the
surrounding sediments, flows like an extremely viscous fluid pushing
up through overlying rock layers. This is slower than glaciers, but it does
move over long distances in geologic time. The structural interpretation
recreates the geometry of the geologic layers over time, predicting how
hydrocarbons may have moved.
Basin analysts use the inferred depositional history and what is known
of geothermal gradients to predict where, when and what type of
hydrocarbon may have been generated.
Petrophysicists use well bore measurements to tie the seismic data to
the well logs.

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SPEAKING OIL & GAS

Reservoir engineers build detailed models of reservoir properties. With

the aid of repeat surveys (called 4D surveys), they also examine how a
reservoir is drained and decide on infill drilling.
In better quality data, direct evidence of hydrocarbons can be deduced from
subtle changes in the seismic reflection strength (amplitude), particularly
as measurements at different offsets can show significant differences in
reflection strength depending upon the fluid content of a reservoir.
The bright spot technique, for instance, derives its name from the fact that it
shows up on the seismic profile as a visually brighter reflection. Bright spot
identification is based on the theory that oil or gas in the pore space affects
reflectivity of seismic waves. In other words, there will be an anomalous
change of amplitude at the edge of the petroleum accumulation where the
wave passes from hydrocarbons back into water-filled pores.
An associated indicator is called a flat spot, where the reflections are returned
from a fluid contact. This is more likely from a gas/water interface because
there is a much greater contrast between velocities of seismic waves in
gas and water than there is between velocities in oil and water. A firmer
prediction can be made if two flat spots are detected one under the other.
One is potentially a gas/oil contact within a reservoir while underneath
may be the oil/water contact.
Nevertheless, apparent direct indicators like bright spots and flat spots
can be caused by factors other than hydrocarbons such as coal seams and
porosity changes between rock types.
Another technique is called amplitude variation with offset (AVO). This
is defined as a variation in seismic reflection amplitude with a change
in the distance between the shot point (energy source) and the receiver
that indicates differences in lithology and fluid content in rocks above and
below the reflecting layer. Interpreters use this effect to try and determine
the thickness, porosity, density, lithology and fluid content of rocks.

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41

Seismic interpretation systems are able to store the large volumes of data
generated by the seismic survey and quickly manipulate them so that the
interpreter can scan through it as horizontal or vertical slices. The systems
can be used to generate semi-translucent 3D volumes so interpreters can
better understand relationships between the features they are examining.
They can change the colour, amplitude and orientation of the data. They can
strip away geologic layers to look at the patterns on a horizon of interest.
And they can stretch the data from time recording to depth, if this has not
been done in the original processing.
Even so, seismic interpretation is subjective, particularly in new areas
where there is little or no well control. A number of interpretations can
be made from the same data depending on the number and experience of
interpreters and the variation in guidelines and exploration philosophies in
vogue at the time. It is at this point that a potential target can be condemned
by one explorer, yet seized upon and made into a discovery by another.
Despite all the technical difficulties and unknowns outlined above,
amazingly detailed images of the subsurface can be made in areas of
good signal penetration. Petroleum geologists today have vastly more
information available to make their interpretations than their peers in
academia or the mining industry. High quality seismic surveys covering
thousands of square kilometres allow unprecedented understanding of the
geological history to depths of 1020 kilometres.

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SPEAKING OIL & GAS

Chapter 3. DRILLING
Once interpretive maps have been completed highlighting prospects worth
investigating, the only way to find out if hydrocarbons are present and in
commercial quantities is by drilling. This introduces the most colourful
side of the industry, both in terminology and activity.
Geologists, geophysicists and drilling engineers combine their professions
to produce a well prognosis which is an attempt to predict the stratigraphic
column (including the depths to each formation) that will be penetrated by
the drill bit. In new areas the prognosis is more difficult than it is in drilled
regions where subsurface information is available, but it still serves as a
guide to the formations and conditions that may be encountered down
the hole.
Prior to 1900 most wells were sunk either by hand digging or by cable tool
(percussion) drilling. In the latter method the bit was dropped attached
to a cable, raised by a surface winch and dropped over and over again.
The weight of the bit penetrated the formation gradually, with pauses

DRILLING

43

from time to time to extract the fragmented rock cuttings from the hole.
Percussion drilling in some areas was used until the late 1950s. However
modern drilling is by rotary means whereby the bit is connected to lengths
of pipe and mechanically rotated on the bottom of the hole.

Rig types
Bottom-supported
Submersible

Floating
Jack-up

Semi-submersible

Drillship

Types of offshore drilling units

Essentially all rotary drilling units have the same components and the only
real differences in rigs themselves stem from the medium in which they
are used.
On land the large rigs can be broken down into a number of loads for
transport to and from drilling locations, while smaller rigs are permanently
mounted on a truck or trailer. When working in dense jungle or other areas
inaccessible by surface transport, a heli-rig is used. It is simply a land rig
capable of being broken down to load sizes that can be airlifted to location
by helicopter usually about 2000 kilograms per load.
Offshore rigs are of four types submersibles, jack-ups, drillships and
semi-submersibles.

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SPEAKING OIL & GAS

GlobalSantaFes GSF Development Driller I, semi-submersible rig

Semi-submersible drilling rig showing the intermediate columns

DRILLING

45

Jack-up rig development drilling at John Brookes gas field, Carnarvon Basin,
offshore Western Australia
Courtesy of Santos

Elevation of a jack-up drilling unit

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SPEAKING OIL & GAS

CR Luigs ultra-deepwater drillship

THRUSTERS

TELESCOPING JOINT

RISER

BALL JOINT
BLOWOUT PREVENTER

DRILL HOLE

A dynamic positioning offshore drillship

DRILLING

47

Submersibles are fitted with ballast tanks so they can be floated to shallow
water locations, then ballasted to sit on the sea bed or lake bed to provide
a stable drilling base.
Jack-ups arrive on location (usually towed by tugs) and mechanically jack
their legs down to the sea bed, raising their hulls clear of the water for
drilling mode. They are usually used in water depths up to 150 metres,
although some of the larger units can drill in up to 300 metres.
Drillships are ship-shaped vessels usually with the drilling derrick placed
amidships to drill through a central hole (moonpool) in the hull. Some early
vessels were also equipped to drill over the side with the derrick mounted
on rails so it could be skidded across the deck. The vessels have their own
propulsion, although a variation the drilling barge does not have its
own locomotion and has to be towed.
Drillships are either anchored or kept in position by a dynamic positioning
system which employs computer-controlled propellers along the hull to
continually correct drift in any direction. These vessels are used in medium to
deep waters, but suffer the usual ship instability in rough weather.
Semi-submersibles are mobile vessels with superstructures supported by
columns sitting on hulls or pontoons ballasted below the depth of wave
action for drilling mode. For transport mode the hulls are deballasted to
the surface. Anchoring can be conventional or via dynamic positioning.
Some semi-submersibles have their own locomotion, but many are towed
or placed on a barge (especially for long distance moves). These vessels
are remarkably stable in rough weather and can be used in medium to
deep waters.

Rig systems
No matter what the transport or carrying mode, a rotary drilling rig has
five main systems hoisting system, rotary system, circulation system,
power system and blowout prevention/safety system.

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Drilling system

The hoisting system consists of a winch (draw-works) on the rig floor.

A wire rope (drilling line) is spooled around the winch drum and is run
up to the top of the steel derrick, over the crown block and down to an
attachment on the travelling block. This latter has a hook for attaching the
drill string via a rotary swivel.
The draw-works are controlled from the rig floor and are used to raise
and lower drill pipe, casing and tubing, or any other equipment run into the
well. The exceptions may be logging tools. These are often run on a separate
winch as a separate operation to drilling, although in modern systems they
may actually be mounted in the drill string just behind the bit to enable a
continuous logging record to be kept while drilling.

DRILLING

49

The mud or circulatory system

The rotary system has three main components. First is the rotary swivel
for suspension of the drill string to the travelling block. Second is the
rotary table located in the rig floor and turned mechanically. Its speed and
direction is controlled by the driller. The third item is the kelly, a hexagonal
or square hollow pipe about 15 metres long which is attached to the rotary
swivel at the top and to the drill pipe at the bottom by tapered screw
threads. A piece called the kelly bushing fits into the rotary table so the
rotary motion can be transferred from the table to the drill pipe via the
kelly. The kelly bushing runs freely up and down the kelly, but cannot
rotate independently of the kelly.
Another method of rotating the drill string is a top drive system. This
involves hanging a motor from the hook and connecting it directly onto the
drill pipe from above. It imparts the rotation without the need for a kelly
or rotary table. The method promotes faster drilling and is particularly
advantageous during directional drilling programs.

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Blowout preventer stack

An additional item in offshore drilling is the marine riser which is a large

diameter tubular connection between the rig and the blowout preventer on
the sea floor. It is a conduit for the circulation of drilling fluids as well as
a guide for running drill pipe and casing. It is fitted with a giant shock
absorber called a telescopic joint to allow for the vessels movement on
the sea surface and it can be quickly disconnected if sea states become too
rough for drilling to continue.
The circulation system pumps drilling fluid down the well and consists
of mud pumps, suction and storage tanks for the mud itself, a stand pipe
which runs up the derrick, a kelly hose connecting the stand pipe to the
swivel and a return mud line below the rotary table which returns mud
from the well to the shale shakers. The latter item removes the drill cuttings
before the mud is sent to the mud tanks for further cleaning by de-sanders
and de-pitters to remove the finer debris before recirculation.

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The power system to operate the rig is either a diesel motor via a direct drive
compound system, or (particularly offshore) a direct current electric drive.
The blowout prevention system consists of a series of hydraulicallyoperated valves and pipe rams which are open to allow the mud to
circulate during drilling, but which can be quickly closed around the
pipe if excessive pressure (a kick) enters the well and threatens to circulate
during drilling. If a kick occurs (i.e. excessive pressure from the formation
being drilled suddenly entering the well), the pipe rams are closed to
prevent this overpressure reaching the surface out of control. The last line
of defence in such an emergency are the shear rams which, if necessary, cut
right through the drill string and seal the well completely.

Well types
Petroleum industry wells are of three types wildcat, appraisal and
development.
A wildcat is the first exploration well in a new or previously undrilled
target. The term seems to have originated from 19th century drilling in the
backwoods of the USA where drillers reported wildcats (pumas perhaps)
lurking in the vicinity. If the well is the first in a completely new region
where there are no close reference points, it can be called a rank wildcat.
Appraisal (sometimes called delineation) wells are drilled as follow-up
exploration wells on structures where wildcats have been successful. They
are often located to try to provide a rough outline of the field and evaluate
its various parameters.
Development (or production) wells are drilled once the discovery has been
appraised and judged economically viable. They are drilled specifically to
tap the hydrocarbons at definite places in the reservoir.
On some occasions during a drilling program only a small diameter hole
is required as an initial exploration tool because it is cheaper, or because
conditions deem it more practical. This is referred to as slim hole drilling.

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Another category of well which can be a wildcat, appraisal or a

development type is the directional well. Depending on the purpose,
it can be inclined at various angles up to and exceeding the horizontal,
by introducing a bias down one side of the hole which causes the bit to
deflect away from the vertical. The early method involved placing an
angled length of metal called a whipstock downhole to act as a wedge to
change the bit direction.
In recent times a technique known as geo-steering has been introduced
for directional wells. Instead of using a whipstock to change the well
direction, modern techniques employ steerable motors mounted
just behind the bit. They are powered by the hydraulic force of the
mud circulating down the hole to turn the bit independently of the
drill string (like the force of wind turning the blades of a windmill).
The assembly includes a bend at the motor bearing housing so that the bit
points at an angle relative to the well centre-line (typically 0.52). This
allows the trajectory of the well to be changed when the bit is advanced by
using the weight of the whole assembly pushing down on it, and is called
sliding. In other words, the mud motor powers the bit so the drill string
can be advanced without pipe rotation.
An even later variation of this technique is the rotary steerable system in
which a sleeve with several hydraulic rams attached is mounted behind
the bit. A pulse sent down through the mud tells onboard computers
what rams to push in order to move in the desired direction. Changes are
achieved by the rams jamming against the side of the hole, thus pushing
the bit off in the opposite direction. The advantage of this system is that
the drill pipe can be rotated in the hole independently of the mud motor
rotating the bit. This enables a continuous operation and provides more
control as opposed to the sliding system which must advance in stages,
i.e. slide, rotate the drill string, slide, rotate the drill string until the
desired new angle is achieved.

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A relatively new directional drilling system is known as coiled tubing

drilling. The steel drill string is a continuous piece of thin steel tubing
wound onto a reel or spool. During drilling the tubing, with bit attached,
is progressively wound off the spool and into the hole via a gantry erected
over the wellhead. The technique does not require a drilling derrick.
The bit is driven by a mud motor or turbine, but the steel tubing itself is not
rotated. The flexibility of the tubing enables the bit to be steered around
tight bends to reach and stay within very narrow reservoir formations.
Coiled tubing is generally used to probe various formations and can be
directed in any number of directions from a selected point in wells already
drilled by conventional means. It is often used to enhance production from
existing producing wells by accessing reserves nearby.
Overall, directional drilling may be used to reach an offshore target from
an onshore location (such as the Wytch Farm field in southern England
which extends out under Poole Harbour) or to reach outlying parts of a
field from a central platform offshore, or to kick off in several separate
directions from a single surface wellhead in onshore work. It might also
be a deliberate ploy to sidetrack around a lost bit stuck in the original well,
or perhaps to seek a new part of the reservoir after the bottom of the
original well has watered out and is no longer capable of producing oil.
The extreme case is a well which is actually horizontal by the time it enters
a reservoir. This exposes a longer section of the well to potential production
(particularly in thin petroleum-bearing formations) than a normal vertical
or moderately inclined well.
The term long reach well (or extended reach well) is used when the ratio of
vertical depth of the target formation versus the lateral extension from the
well head is biased to the extension. These wells (usually offshore) can be
drilled into a target up to 10 kilometres away from the rig or platform.

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Multi-casing oil well completion

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Bit types
Drill bits can be divided into several classifications.
The rolling cutter bit (or tri-cone bit) for rotary drilling was first successfully
designed by Howard Hughes in 1909. It has hardened steel or tungsten
carbide teeth of varying lengths and spacings, mounted on three roller
cones. The cones are designed to attain maximum cutting rate without
causing the teeth to clog.
For soft formations the teeth are long and widely spaced and the cones are
offset such that their axes do not intersect at a common point. This offset
produces a gouging action on the formation as the bit is rotated.
For progressively harder formations the teeth are shorter and more closely
spaced, while the cone offset is made less and less until, for very hard
rock, there is no offset at all. These bits rely on destroying the compressive
strength of the rock being drilled.
The diamond bit, adapted from the mining industry, imparts a grinding
action as the drill is rotated. The bit itself consists of industrial diamonds
embedded in a metal matrix. It is long-lasting in all but the hardest
formations, thus reducing the number of bit changes while drilling.
Diamonds are also used in core head bits which have a hole forged through
their centres allowing a core of rock to pass through into a core barrel
mounted directly on the drill pipe behind it.
The polycrystalline diamond compact (PDC) bits have come into use in
the last 15 years or so and have dramatically increased penetration rates.
PDCs are very durable man-made diamond cutters set into a body to
produce a very aggressive cutting action.
As mentioned in the previous section, a relatively recent evolution is the
use of downhole motors (and also turbines) attached to the drill string
to turn the bit. The power to rotate is supplied by the circulatory drilling
mud and it requires a greater pumping effort from the surface than in
conventional rotary drilling. The drill pipe itself is also rotated slowly

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Rolling cutter drill bit

(tri-cone)

Tri-cone drill bit

(end view)

Diamond core bit

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57

and independently from the bit to prevent sticking. Generally mud motors
rotate at 150250 rpm, while turbines can rotate at 2000 rpm and are used
when penetrating hard rock.

Hole sizes
The diameter of the drill bits used, and thus the hole itself, becomes
successively smaller as the well is deepened. There are no hard and fast rules
relating hole depth to bit sizes because much depends on the stability of the
formations being drilled and the target depth of the well.
Nevertheless, it is usual to run through a series of sizes beginning with
the spud in or surface bit of 36 inches in diameter for offshore wells and 26
inches diameter for land wells. Drilling then progresses through diameters
of 26 inches, 17 inches, 12 inches, 8 inches, down to 6 inches.
In most wells the hole is cased (lined) with steel pipe to prevent caveins and to retain circulation of drilling fluid. The casing is inserted prior
to every bit diameter change and the casing sizes correspond to the bit
sizes just mentioned: 40 inches or 30 inches for surface (conductor) casing,
20 inches, 13 3/8 inches, 9 5/8 inches down to 7 inches, the latter sometimes
called a liner or production tubing if the well is a development well.
In slim hole drilling, diameters usually begin at 10 or 8 inches and end at
between 5 and 3 7/8 inches. Early slim hole work was limited to probing
relatively shallow targets, but advancing technology and the use of special
high-strength drill string able to withstand the high torque forces involved
in rotary drilling now enables the bit to reach depth of 3000 metres
and more.

Casing
Casing is made up of lengths of steel pipe screwed together, much like
drill pipe, which lines the well and acts as a pressure vessel establishing
barriers between different producing formations and the surroundings.
The surface, or conductor, casing is anchored to the wellhead and each
successively smaller casing size is hung from the preceding one as the

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hole is deepened. Usually casing is cemented into place against the well
sides by pumping cement under pressure down the centre of the pipe and
back up the outside. When set, the cement casing shoe left at the bottom of
the well is drilled out, and drilling into new, deeper formation continues.
A specialised form of casing can be manufactured with a diameter profile
in the form of two D shapes. This is then pushed down over a wedge
placed in the bottom of the hole to drive the two D sections apart making
an inverted Y shape. This is used for drilling two lateral (directional) wells
from the same location.

Drilling fluid
Drilling fluid is often referred to as drilling mud a term relating to
earlier times when water used to help drill the well became mixed with
drill cuttings from downhole to produce a muddy liquid. At first the fluid
was discarded, but then explorers found the drilling was easier when
using this natural mud. The discovery sparked experiments into variations
of drilling fluid. Today muds can be divided into several categories.
Water-based muds (fresh water and salt water) can be simple clay-water
mixes, clay-water plus chemical additives, or numerous other combinations.
The most commonly used clays are bentonite or montmorillonite, both of
which are sodium aluminium silicates that expand to about 10 times their
original volume when mixed with water.
For some operations (such as high inclination wells where there can be
torque problems on the drill string as well as a danger of hole collapse)
and in some geological formations (such as water-reactive shales), waterin-clay is not appropriate because it can destroy permeability and prevent
accurate evaluation of a reservoir formation.
Sometimes specialised chemical mud, such as potassium chloride and
polymer solutions, is used to counter these difficulties.
Another category is oil-based mud. This can be an oil-in-water or water-in-oil
emulsion. The oil used today is diesel, synthetic or pseudo (ester).

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There are stringent conditions attached to the use of drilling mud,

including strict regulations on the disposal of used materials. In the marine
environment the spent mud is sometimes stored in containers and sent to
shore for disposal, or it may be re-injected into a higher formation or into
a dedicated hole already drilled for that purpose.
In some circumstances compressed air, or foamed air, or an inert gas like
nitrogen is used as the drilling fluid to prevent damage to a water-sensitive
formation or when there is a risk of losing mud into a porous formation.
Drilling fluid has five important uses.
It can be weighted to prevent high pressure formation fluids downhole
from entering the well. Usually the weighting material used is barite,
a dense, heavy sulphate of barium. However, care must be taken with
the mud weight. If it is too high the drilling fluid may break down
the formation and escape into it. If it is too low there is a danger of
the well being under-pressured and this could potentially result in a
blowout. Having said that, there are some circumstances when using
air or nitrogen as the circulating fluid, that the well is deliberately
drilled underbalanced. This allows formation fluids to escape up the
well to the surface where the flow is continuously monitored to detect
hydrocarbons. However extreme vigilance and great control is needed
to prevent a sudden inrush that might cause a blowout.
It cools and lubricates the bit and the drill pipe.
It acts as a carrier to flush drill cuttings up out of the hole, thus keeping
the bit clear and allowing geologists to examine the formation being
penetrated.
It coats the hole with a thin layer and acts as a semi-permeable membrane
which prevents loss of mud into all but the most porous formations
being drilled.
It prevents caving of loose formations.

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In recent times an additional use for drilling fluid is to transmit data up

and down the well during a drilling operation. The messages are sent as
coded pressure pulses that change the settings of the mud motor or the
logging tools. Data from the tools is sent back up the hole the same way and
decoded at the surface. During exploration drilling this enables geologists
and engineers to get data quickly to enable continuous monitoring and
adjustment of the program. During development drilling it can be used
to provide an accurate fix on the location of the bit at all times and make
corrections as necessary.

Logging
The purpose of logging a well is to compile a comprehensive record while
it is being drilled and immediately after it has reached its total depth.
In this sense cuttings and core samples can be included in the category as
well as the various electronic devices used to identify the formations and
their properties encountered downhole. Three types of information are
obtained through logging methods: rock type and porosity, fluid content
of the pores, and mechanical and fluid flow conditions of the well.
Mud logging includes a routine geological examination of the drill
cuttings as they are flushed from the hole, plus a comprehensive record of
the variations in drilling rates, the variations in mud pumping pressure,
the depths of formation changes and an analysis of the mud properties,
including hydrocarbon content measured by a gas detector. Any oil in the
cuttings causes them to fluoresce under ultraviolet light.
Coring is usually restricted to a reservoir zone or to a section of interest
encountered during drilling. Core is collected in a core barrel, which is a
cylindrical tube about 20 metres long mounted just above the special coring
bit. Once brought to the surface, core is examined on site by a geologist and
then sent to a laboratory where porosity, permeability, hydrocarbon saturation,
water saturation and detailed lithology (rock composition) are determined.

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Taking a core sample

A variation of the technique is side wall coring. This is normally done

after electric logging to take a sample from zones not evaluated by normal
coring methods, but picked up on the log charts as sections of interest.
A core gun containing up to 60 small core barrels about one inch in diameter
is lowered into the hole. The barrels contain an explosive charge and are
fired electronically from the surface.
The charge drives the barrel into the side of the hole at the required depth
and is retrieved by wire rope attachments when the gun is withdrawn.
A core obtained in this way has a number of disadvantages in that the
explosive force often destroys the texture of the formation sample and,
because it is collected from the wall after drilling, it often has pore contents
completely altered from the natural state. Nevertheless it is better than no
core at all.
Electric logging is accomplished by lowering instruments called sondes
down the well. Each type of sonde measures a different physical property of
the rocks that have been drilled, such as electrical resistivity, self potential,
natural radioactivity, sonic velocity and induced radioactivity.
Hydrocarbons in the rock are detected directly by an increase of resistivity
when compared to the same rock containing water. They are indirectly
detected by the various ways in which the responses of the sondes are
caused to deviate from normal.

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Electric logs measure the resistivity of the rock and also determine rock
type. In general, shale has a low specific resistivity, while limestone and
sandstone resistivity is relatively high. Oil and gas within a rock will
increase resistivity because they are non-conductive materials.
Nuclear logs measure gamma rays and thermal neutrons and can be
used to determine porosity (including fractures) and lithology in a
given formation. They are also the only porosity determinants which
can be used in a cased hole.
Acoustic logs measure the velocity of sound within the formation in the
same way as seismic surveys on the surface detect changes in formations.
Acoustic logging is mainly used for porosity determinations and to help
in differentiating gas-bearing zones from liquid-bearing zones.
Other logs are run specifically to assess mechanical and fluid flow
conditions down the well. They include a calliper log (which measures
well diameter), a cement bond log (which measures strength and bonding
of cement to casing), a temperature log (which detects the top of the
cement column outside the casing because heat is given out when
cement sets), and the dipmeter (which measures the formation dip
relative to the well), and a compass to determine the well orientation.

Electric logging

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In earlier days the logging operation was performed separately to drilling.

Wells were drilled to a given depth before the drill string was hauled out
and the logging tools lowered to take their readings. This is known as
wireline logging. More recently the logging operation is accomplished
while drilling. The well is drilled to the reservoir or inquiry depth and
then the logging tools are sent down to sit behind the bit and the motor.
This technique is known as formational evaluation while drilling (FEWD).
It provides immediate detailed information about the well and the
formations it is passing through.
Thus the business end of the drill string starts with the bit and its drive
system (the motor, which can be 10 metres long and uses the hydraulics
of the drilling fluid to impart a rotation to the bit). The survey package
(compass and orientation tools) come next and make up another 10 metre
long section. Finally the formation evaluation tools make up the third 10
metre long package and contain gamma ray, resistivity, neutron density,
acoustic, calliper and formation pressure tools.
One of the original and still the most important uses of logging is the
correlation of equivalent strata from one well to the next, allowing accurate
subsurface plotting. This in turn helps determine the formations present
relative to other wells. It also indicates whether a well is within a particular
geological structure, whether a well has reached a known horizon, the
presence of faults and the existence of dips, folds, unconformities,
thickening and thinning of formations.

Testing
Notwithstanding all the logging techniques, the final confirmation of the
presence and character of hydrocarbons is by producing a sample from the
reservoir formation. There are two methods of obtaining such a sample,
and both depend on allowing the natural pressure of the reservoir to drive
the formation fluids to the well collection point.
A wireline formation interval test involves lowering a test chamber
on the end of a wire to the depth of the reservoir and sealing it against

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the well walls using expanding rubber packers above and below.
Pressure inside the chamber is atmospheric and a valve assembly, when
opened, allows reservoir fluids to flow naturally into the chamber.
If there is no flow, a shaped charge is detonated, piercing the formation
and opening a flow channel to the chamber.
The volume collected in these tests is small (about 1015 litres), but
it does give an indication of the formation fluids in the reservoir.
The test also records pressure of the incoming fluid and some general
extrapolations can be made about flow rates. The wireline test is particularly
useful in locating hydrocarbon/water contacts and the extent of transition
zones.
A drill stem test is more expensive and involves the lowering of a test tool
into the well on the end of drill pipe. Packers again isolate the section to
be tested and, when the valve is opened, the reservoir fluid is allowed to
flow into the drill pipe. It is then recovered when the pipe is pulled out
at the end of the test. Alternatively the hydrocarbons may be allowed to
flow to surface in a full production test where they are controlled via a series
of chokes of different sizes. Pressure and volume of fluids are measured.
Oil is collected, while gas is flared.
An open hole test is one that is done on a part of the hole that has not
been cased. In a cased hole the test is conducted through perforations shot
through the steel walls at the level of the reservoir zone.
Often the test will be shut in after a time to allow the pressure in the
reservoir to build up again after the initial flow. Then it is reopened for a
second and even a third measurement. Continuity of pressure during a test
run and rapidity of pressure build-up between tests give some indication
of the permeability of a reservoir and its potential performance in full
production mode.
Occasionally, when the discovery is small or marginal, companies will run
a long-term production test, stopping and starting the well flow over a
period of months to better determine the economics and overall viability
of a full development program.

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Acidising and fraccing

There are times when logs and testing techniques indicate that oil and/or
gas is present in a reservoir, but the formation is not permeable enough to
readily allow hydrocarbon flow.
If the reservoir is a limestone or a dolomite, an acid solution can be
pumped down the well and forced into the formation. The acid etches into
the carbonate rocks of the reservoir around the well, opening up channels
and unlocking the hydrocarbons.
If the reservoir is a sandstone with low permeability, the formation can be
forced open by pumping a specially blended fluid (chemicals that dont
adversely react with the formation, even air and inerts like nitrogen)
under great pressure downhole and into the formation until it literally
cracks it open. The pumping pressure exceeds the formation strength. This
technique is known as fracture stimulation or fraccing. Proppants mixed
in with the fluid (such as sand, aluminium pellets, even walnut shells in
the early days) are also forced into the formation and they keep the new
fractures open so that a path remains for hydrocarbons to flow to the well.

Abandonment or completion
If a well is dry, or if hydrocarbons found are non-commercial, the well
is plugged and abandoned (P & A). This process calls for isolating various
formations with cement, taking particular care to block the reservoir zones
and any high pressure zones that may have been encountered.
Sometimes wells are suspended by setting cement plugs as a temporary seal.
At a later date the well may be re-entered for evaluation and the cement
plugs are simply drilled out using standard drilling techniques.
If the well has tested commercial hydrocarbons, it is usually completed as
a producing well or suspended so that completion can be carried out at a
later date. A completed well has production tubing installed and the well
casing is perforated in the reservoir zone. A system of valves (known as a
Christmas tree) is placed at the wellhead on the surface for later hook-up to
the production system.

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Typical Christmas tree

Offshore a successful well is often plugged and abandoned because it is

not optimally placed for future development. Development drilling will be
done later from one or two platforms at other locations on the field, selected
for ensuring an even drainage of the reservoir. The exception is for small
fields offshore where subsea completions may be installed on each successful
well, or where single-well platforms are used. In those cases the original
exploration wells may be used as production wells.

Remedial work
Few wells are textbook operations in practice and any number of problems
can be encountered during drilling or testing.

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67

Some of these include the drill pipe sticking in the hole, twisting off a
section of drill pipe in the hole, the loss of equipment such as logging or
test tools down the hole, washouts and loss of mud circulation into the
formation and, most serious of all, formation fluids overcoming drilling
mud pressure causing blowout and possible fire, explosion and equipment
damage at the surface.
When there is a stuck pipe or equipment is dropped or sheared off downhole,
the operator has three alternatives. They can fish for the obstruction with
specially designed grappling, cutting, grinding and magnetic tools.
Another option is to drill around the obstruction by deviating from a
point a little above it (sidetracking). However, if a sidetrack is also likely to
be difficult, the operator may decide on the third (albeit very expensive)
alternative drill a completely new well from the surface.
Loss of circulation and washouts in soft formation can also be difficult to
contain and often the well program must be changed so that casing is run
through the troublesome section earlier than originally planned. Recently
a way around this dilemma has been provided by the development of
expanding casing which is made of very pure steel. Once in position over
a bad patch in the well, a cone is pushed down through it to open out the
diameter. This avoids the need to set the next casing size and thereby lose
diameter for the next part of the hole.
An increase in the density of mud weight, and blowout equipment in
working order, can usually overcome any sudden pressure inflows in a
well. In such events too, a lot depends on the experience of the drilling
personnel. A crew trained in well control and blowout prevention can
circulate a kick of high pressure out of the system using the valves and
chokes in the well.
Another form of remedial operation is the well workover. This can either be
a program of widening, cleaning or re-perforating an old abandoned well,
or a producing well that has already had a long life and needs rejuvenating.
The workover is usually carried out with a small drilling rig on land and
on a production platform, or one of the four types of offshore rigs suitable
for an offshore location.

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Chapter 4.
EVALUATION & PRODUCTION
Evaluation of a discovery is still, strictly speaking, an exploration function
and involves detailed appraisal work.

Reserves estimates
Once exploration drilling has discovered an oil and gas accumulation,
appraisal drilling is needed to determine whether or not it is large enough
to be commercially viable. As the drilling results come in, the geological/
reservoir engineering team makes an evaluation of the discovery and an
estimate of the reserves. Naturally enough, the more well data collected,
the more confidence can be placed in the estimate.

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69

Appraisal
Appraisal wells are sited to determine the physical parameters or dimensions
of the field. For instance, if the discovery well has successfully penetrated
the crest of a structure, the appraisal wells will probably be drilled down
the flank to establish the lateral extension in four directions by finding the
oil/water contact. If the discovery well has penetrated a structural flank
and already established an oil/water contact, then there is scope to drill an
appraisal well closer to the crest (or up-dip) to try and find a gas/oil contact
point. This can indicate the true height of the highest and lowest point
of oil in the structure (the hydrocarbon interval or pay zone). Sometimes
oil may not have a gas cap and this can be determined by drilling on the
top (crest) of the structure. A purely gas reservoir will be indicated if the
appraisal finds a gas/water contact.
Appraisal work includes input from seismic mapping, downhole log data
and well tests. The results are used to determine the oil/gas, oil/water
and/or gas/water contacts and to indicate the horizontal and vertical
dimensions of the trap. This in turn, enables an estimation to be made
of the potential volume of oil and/or gas in place (in situ). However, the
calculations are rarely straightforward. Complications arise through errors
or uncertainties in seismic interpretation, faulting, lithological changes
and erosional features. A general rule is: the thicker the pay zone, the more
continuous it is likely to be. But this is by no means absolute.
Three other factors of major importance are net pay, porosity and
hydrocarbon saturation.
Net pay thickness in the reservoir or reservoirs is the interval filled with
hydrocarbons, and is generally derived from core or cuttings and logs or
interpretations from test results.
Porosity is the capacity of a given volume of the reservoir to hold
fluids. An estimate is made from the well logs and core analysis.
Hydrocarbon saturation is also derived from well logs and is the fraction
of the porosity that is hydrocarbon filled. The degree of confidence in the
estimate varies with the type of lithology, the type and quality of the logs
and the availability of data from previous wells in the area.

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Once the physical shape of the accumulation and volume of hydrocarbons

in situ are known, it is possible to estimate the reserves (the proportion of
hydrocarbons expected to be commercially recovered from the reservoir).
Due to the nature of the fluids, uncertainties in knowledge of the reservoir
parameters and the limited number of wells that will be drilled, recovery is
always much less than 100 per cent. For an oil field, recovery will generally
be 1040 per cent, but it can in exceptional circumstances reach 7080 per
cent. Gas recovery is normally 5080 per cent of the hydrocarbons in situ.

Recovery estimates
The so-called recovery factor, which denotes the percentage of hydrocarbons
in situ that will be recoverable, depends on three main items nature of
the fluid, reservoir drive mechanism and productivity.
The nature of the oil or gas in a reservoir is described by chemical analysis
of its components. For oil, measurements of the API gravity value, the
pour point (the temperature at which oil changes from liquid to solid), the
bubble point (the point, during decreasing pressure, at which gas begins to
come out of solution with the oil), the viscosity and the gas/oil ratio (GOR)
are also relevant.
The drive mechanism of the reservoir is the availability of natural means of
supporting the pressure in the reservoir. There are three common types:
A water drive occurs when water in the reservoir formation is directly
in contact with the oil (or gas). As oil (or gas) is produced, pressure in
the reservoir is reduced causing an influx of the water, which in turn
sweeps through the pores of the rock and pushes the oil (or gas) out as
it advances.
A solution gas drive occurs where pressure support is provided solely
by the oil. The drop in pressure caused by production releases gas
from solution in the oil. As the gas expands, it displaces an increasing
quantity of oil from the pores.

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71

 A gas cap drive occurs when there is a large gas cap in direct
communication with an oil zone. As the pressure is reduced, the gas
cap expands and sweeps oil ahead of it.
Often the drive mechanism is a combination of these and other mechanisms.
Water drive is the most favourable and solution gas is the least favourable.
In all cases, pressure, and therefore production, declines with time.
Productivity is often the least predictable parameter. It is mainly a function
of the reservoir permeability and fluid viscosity. It can be determined in
part from cores and interpretation of test results.

Reserves classification
Common terms used when describing petroleum reserves in a field are
proved, probable and possible. They reflect the confidence that is felt about
the reserves calculated. Proved reserves reflect a very high degree of
confidence (90 per cent certainty and labelled P1 reserves). At the other
end of the scale possible reserves have a very low degree of confidence
attached to them (10 per cent certainty or P3 reserves). Probable reserves
represent the mid-range of confidence (50 per cent certainty, or P2).
Companies sometimes also use a slightly confusing notation 1P, 2P and
3P when reporting reserve figures. Taken respectively these simply
mean proved reserves only, proved plus probable reserves, and the sum of
proved plus probable plus possible reserves.

Market potential
Modern field evaluation techniques also include preliminary marketing
investigations. For oil discoveries, the field operator will run a detailed
assay to determine the exact nature of the crude, including a breakdown
of its components and the type of petroleum products that may be
obtained when it is refined. This step is also a check for any impurities
in the crude that need to be dealt with to comply with companies strict
health and safety programs, as well as to give an early start in establishing
plans for their removal during any development stage. The assays are
done on samples obtained upon discovery and during appraisal drilling.

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The assay results are circulated to potential buyers to gauge interest and
the possibilities for sale, if and when the field is brought on stream.
For gas, assays to determine the nature and percentage of the
components (including any impurities such as carbon dioxide, nitrogen
and sulphur compounds) are an important factor in establishing economic
value. However, it is usual when dealing with gas accumulations to
establish a market before development can take place. Hence an initial
market evaluation, domestically and internationally, is often carried out in
conjunction with field appraisal work.
In some instances the results of market surveys can influence the
nature of development plans and the design of the production facilities.
Once the reserves for a field are estimated and declared viable, planning
for development can begin. Sometimes the go-ahead to proceed to
development will be given immediately. At other times a more cautious,
stepped approach is taken which involves preliminary design (or feasibility
studies) followed by a front end engineering and design (FEED) stage.
The FEED stage provides definitive costs and technical data to enable a
decision on whether or not to make a final commitment to finance a full
development plan.

Development drilling
Offshore, petroleum engineers draw on their knowledge of the field gained
during the evaluation (aided by the computer-generated models based on
the acquired data) to choose an optimum number of well locations to
effectively and efficiently drain the reservoir across the whole field. Generally
these wells must be identified prior to actual development to permit proper
design of the facilities. Wells can be vertical, deviated or horizontal and may
be drilled from one or more central platform locations. Sometimes well slots
on a platform are not used immediately. Rather, those wells are drilled at
a later date when the engineers have some idea of the fields production
history. For instance, they may be directed into spots in the reservoir where
oil has been left behind, or to boost production from an area that is flagging.
Development wells can also be individual subsea completions and in this case
it is often possible to re-use exploration wells as subsea production wells.

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In the onshore sector, development drilling generally occurs in a more

step-wise fashion. Additional wells are committed to and drilled only
after the results of earlier wells are known. There is less need to commit
to a full field development at the very beginning. Wells are often vertical,
although recent perfection of the horizontal drilling technique and the
use of motorised bits has provided this option for use particularly in
thin reservoirs. In onshore work it is generally possible to use successful
exploration wells as producers.
Improved technology is blurring the former distinction between offshore and
onshore development because some offshore fields can also be developed in a
step-by-step progression using subsea completions and monopod platforms
as an initial guide to future development options. Nevertheless, whether
onshore or offshore, the number and spacing of wells will be determined by
reservoir parameters, the field size and, particularly in the case of gas, the
commercial contract requirements.
Information obtained from development drilling improves the reliability
of reserve estimates and further improvements occur as the field is
produced.

Production techniques
Field production comes under three main headings primary, secondary
(or supplementary) and tertiary (or enhanced) recovery.
In primary recovery the reservoir pressure (drive mechanism) forces oil
and gas to the well and hence to the surface under natural flow. Some
fields may have several producing horizons, each with a different pressure,
petroleum type and other variables that need separate production. This
can be accomplished with separate wells. Alternatively, a dual or multiple
completion can be established in the one well.
The latter methods are mechanically more complex and therefore more
difficult to maintain, despite the fact that they are cheaper to install than
drilling second and third wells using single completions in each zone.

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A beam pump unit (nodding donkey)

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Natural flow accounts for most of the worlds oil production but, as
previously mentioned, only a portion of the hydrocarbons are recovered
via this means.
Secondary or supplementary recovery is achieved in a number of ways.
Re-injection is a method where reservoir pressure is maintained by
returning natural reservoir fluids such as water (water flooding) or gas
to the producing zone via strategically placed wells in the field that are
dedicated to re-injection. This technique bolsters the main (primary) drive
as long as possible.
Gas lift (or artificial lift) is also a means of extending natural oil flow.
It involves increasing the amount of gas produced with the oil by
injecting gas directly into the flowing column in a well rather than into the
reservoir. Gas lift is accomplished by using special valves set up at various
depths and then controlling the amount of gas entering the flow stream.
The increase in gas/oil ratio reduces the pressure needed to drive the oil
to the surface.
Pumping is another form of artificial lift and is accomplished in three
ways a beam or rod pump (the familiar oil field nodding donkey),
a hydraulic pump or a submersible electric pump. The latter two pumps
are installed in the well bore itself.
Tertiary or enhanced recovery involves oil production only. It is achieved
by injecting fluids which are not normally present into the reservoir with
the aim of altering the properties of the oil to enable a greater proportion
to be produced. Enhanced recovery methods are generally applied after
primary and secondary techniques have been exhausted. The methods
include injection of miscible fluids like carbon dioxide and nitrogen and
injection of complex polymers or steam. Another technique is in situ
combustion, particularly for viscous oil. This involves igniting some of the
oil in the underground reservoir to heat the remaining oil and render it less
viscous and thus more able to flow to the wells.
These tertiary methods can raise ultimate petroleum recovery by 10 20
per cent under favourable conditions.

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Diagram of dual completion in producing well

Gas lift operation

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Production hardware
The production process for oil and gas is generally the same onshore as it
is offshore and any differences in technique are a matter of economics and
designing an engineering solution to best deal with the fluids involved. Space
limitations offshore may also influence the process design.
Processing includes six systems gathering, separation, treatment/
storage, water treatment, safety, and utility handling facilities.
The gathering system is a series of small diameter pipelines connecting
to each wellhead and feeding into the main processing inlet.
The separation system relies on the fact that oil, water and gas have
different densities and will settle into separate layers. Internal devices
in the separation vessels assist in speeding up the process.
The treatment, storage and disposal system for oil and gas is usually
split into two streams. Oil leaving the separation system is virtually
free from dissolved gas and is termed stabilised. However, it may still
contain water in emulsion form. Further treatment can remove this
water using various techniques, including the introduction of chemicals
or the use of electrostatic separation.
Gas leaving the separation system is saturated with water vapour
and hydrocarbon liquids, with the amount of liquid depending
on temperature and pressure. Water is removed with absorbing
substances such as glycol. Special membranes remove carbon dioxide,
and dehydration enables the capture of sulphur compounds. Nitrogen
and hydrocarbon liquids, mainly ethane, butane and propane, are then
separated using a refrigeration process until the various components
condense out of the gas stream.
The water treatment and disposal system involves further action on
the water to reduce residual oil content to acceptable environmental
levels before it is discharged. The methods may include de-aeration,
filtration or chemical treatment, with time allowed for settling out of
the two phases.

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GAS

Flare system
Pipeline

Compression
Gas
dehydration
system

Gas liquids
recovery
system

Gas lift
Compression

GAS

Reservoir

Gathering
system

Separation
system
WATER

Gas re-injection

OIL
Pipeline

Oil
treatment
system

Storage
system

Pumping
system

Oily water
separation
system

Filtration
system

De-aeration
system

WATER
SEA

Pumping
system

Tanker

Water
injection
system

Possible production systems on an offshore platform

The safety system includes installation of alarms, automatic shutdowns, back-up units on important equipment, exhaust (flare) stacks
and fire fighting equipment, plus strict administrative procedures and
frequently practised emergency containment and evacuation plans.
The utility systems include power generation and facilities for normal
services, all of which can be, and frequently are, powered by the gas or
oil being processed in the plant.

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Facilities design and layout

Onshore, the individual production wellheads on a field are connected
by gathering pipelines to a main processing plant or to individual storage
tanks if the field is small. After processing, the oil is transported either
by truck, tanker or pipeline to a refinery. Onshore facilities are placed as
convenient and in accordance with any civil planning and environmental
considerations.

STEEL
PILED

CONCRETE
GRAVITY

FLOATING

GUYED
TOWER

TENSION
LEG

Some examples of production platforms

Depending on the volume, gas associated with oil production is either

re-injected into the reservoir for pressure maintenance or processed
and sent to market via pipeline. Small amounts of the gas can be used
to generate power for the production facilities. Flaring unwanted gas
is now a rare occurrence, especially on a long-term basis, as most
authorities and companies view this as wasting a valuable asset.
There are also environmental considerations to do with greenhouse effects
and any flaring generally requires a special permit.

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BHP Billiton-operated Griffin Venture, offshore northwest Australia

FLOATING CRUDE
PRODUCT HOSE

FLARE

BRIDGE &
CONTROL
ROOM

HELIDECK
SHUTTLE
OFFTAKE TANKER
HAWSER

UNIVERSAL
JOINT ASSEMBLY

MOORED STORAGE/
PRODUCTION TANKER

RISER
CHAIN TABLE
ANCHOR CHAINS
SUBSEA
WELLHEAD
ANCHORS

FLOWLINES &
CONTROL UMBILICAL

A floating production storage and offtake facility (FPSO)

Offshore, there are various ways of tackling the production layout, space
being at a premium on a production platform or production vessel.
For medium to large fields it is common to have one or more fixed
platforms which house all the wellheads and the processing equipment,
plus accommodation for the field workers. A pipeline can then be run to
shore to permit more extensive processing and storage and/or distribution.
In some isolated oil fields, a short pipeline may be laid from a platform to
a nearby buoy mooring system which is used to load the oil directly into
offtake tankers.

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Douglas complex at BHP Billiton-operated Liverpool Bay Development, Irish Sea

Offshore platform system

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West Tuna concrete gravity based facility being towed out from Port Kembla to Bass Strait

Platforms vary in size, shape and type depending on the size of the field, the
water depth and the distance from shore. Most common is a steel structure
with piles sunk into the sea bed, but there are also concrete and/or steel
structures that are held onto the sea bed by their own weight (gravity
structures) or converted jack-up exploration rigs that stand on the sea bed.
Other systems employ floating vessels (usually ship-shaped) known as
floating production, storage and offtake facilities (FPSO). Another type is a
tension leg platform that is tethered to the sea bed by vertical cables and yet
another is the guyed tower which is supported upright by radiating cables
anchored into the sea bed, acting much like the guy ropes of a tent.
In fixed platforms, the legs have a primary function of supporting the deck
and its load of processing facilities. The leg structure also surrounds and
protects the well conductors (hence the term jacket). Some fixed platforms,
particularly the concrete gravity type, also contain oil storage tanks in their
bases or in the column legs.
If the water is shallow and land (or another platform) is nearby, small
platforms may be used with the main processing facilities located ashore
(or on a centrally-located master platform).

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In other cases, subsea production units are used. These sit on the sea
bed and feed oil and gas into fixed platforms or floating production
and storage units via flexible flow lines and buoyed marine risers.
The floating facility can range from a vessel just for storage purposes to a
disconnectable, self-propelled tanker. Processing is still done on the facility,
not on the sea bed, although subsea processing is a developing technology.
The subsea units may be open to the sea (a wet tree) or, in the past,
encapsulated in a chamber under which pressure is kept at atmospheric
levels to allow operators to enter and work under normal conditions (a dry
tree). Dry chambers permitted manual intervention beyond diver depths
and opened the door to deep water development.
Production engineering is continually pushing the frontiers of technology,
especially in offshore applications. At the same time, the best designs
include equipment and systems that are as simple as possible to improve
reliability and avoid potential flow problems. Robust system design
enhances economic performance. There is also consideration given to
geographic location. If the field is remote from infrastructure, such as West
Africa or the North West Shelf off Australia, construction vessels have
to be brought in especially and this may increase the overall cost of the
project. On the other hand, in the active Gulf of Mexico or North Sea, many
construction vessels are employed in the region and mobilisation costs to
a project are much less.
As the industry tackles deeper and deeper water, FPSOs connected to
subsea wellheads are replacing fixed platforms as the main development
technique. FPSOs allow the facilities to be placed over the field. Platforms
in shallow water often have longer tie-backs, while the reservoirs on the
edge of the continental shelf are developed subsea. Oil flow lines between
the wells and the production facilities can be up to 30 kilometres long and
must combat pressure drop-off, heat loss and an increase in oil viscosity.
For gas, the flow lines can be much longer (up to 200 kilometres) allowing
production to flow directly to a shore plant rather than an offshore facility.
In some instances artificial islands have been created for shallow water
and Arctic applications.

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Apache reel pipelay barge

There have also been recent advances in the remote control of subsea
wellheads. Undersea umbilicals carrying the hydraulic, power and
electronic communication cables can be up to 150 kilometres long. In the
Arctic, work is being done to perfect an umbilical system that runs under
the ice to connect with and control a subsea system 400 kilometres away.
Steel tubes are replacing the thermo-plastic hoses of earlier umbilical
design. Another emerging technology is the development of autonomous
control systems where the umbilicals only carry the communication cables,
and the power for operating the subsea valves is actually generated at the
wellhead. Electric trees are also being developed for long distance and
very deep water application.
An alternative technique is the use of remote controlled buoys stationed in
the ocean above the subsea system, such as the East Spar field off Western
Australia. However these buoys are best for relatively short distances from
the shore line. For over the horizon applications, satellites are needed
as relay stations to bounce the control signals. In addition, the logistics
of supplying chemicals such as the injection of glycol or methanol at the
wellhead to improve the oil flow rate from the subsea wells is more difficult
with a remotely controlled buoy system.

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Pipelines
Pipelines are an important part of all phases of production, from the
gathering systems joining wells to process facilities and in the distribution
system delivering oil and gas to refineries and markets. Pipelines vary from
simple steel tubes to state-of-the-art spiral-wound, flexible lines. They may
vary in diameter from 50 millimetres to two metres.
Laying of pipelines can be expensive, particularly offshore where
sophisticated techniques are used to ensure the line is properly placed.
The traditional approach offshore is to weld lengths of pipe together on
a lay barge and progressively lower or slide the pipeline to its designated
sea bed location. The pipe is guided and supported for a short distance
after leaving the lay barge by a ramp called a stinger mounted at the stern
of the vessel. It is possible to lay pipe in 1000 metres of water using these
conventional techniques.
For deeper water, up to 2500 metres, a J-lay method is used whereby
the pipe, still welded into a continuous length on the barge, is dropped
vertically and then laid on the sea bed in a bowed incline (like the letter J).
Lines of up to 700 millimetres diameter have been laid in very deep water
with this technique using heavy lift/lay barges.
Other methods for shallower water include welding the pipe lengths
together onshore and then pulling (or towing) the completed line into
the desired location as one whole unit. For smaller (up to 150 millimetres
diameter) lines, it is feasible to have the pipe delivered on a reel to
a specially designed reel barge which then unrolls the line along the
appointed route.
Onshore pipelines are also welded and laid in sections. Usually the onshore
lines are buried, thus the laying operation is preceded by trench cutting
and followed by burial.

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Pipe-laying operations from conventional lay barge, Semac I

Pipe-laying operations from conventional lay barge

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Many offshore lines are also buried, especially in shallow water where
currents and tides may cause scouring and movement if laid on top of the
sea bed. Sometimes, if not buried, the lines are given thick outer coatings
of concrete to weigh them down. However, there is no need for weight
coating in very deep water as the currents are less and the increased
thickness of the steel needed to withstand the higher external pressures at
depth adds sufficient weight to keep them in place.
Petroleum pipelines are also coated with several layers of protective
material and fitted with cathodic protection devices that inhibit corrosion.
Internal pipe maintenance and cleaning is conducted by sending a
scrubbing device or pig (originally named because of the squealing noise
early versions made as they traversed the line) through the pipeline at
regular time intervals. Other, more sophisticated pigs are able to inspect
the integrity of welds and the internal condition of the pipe as they
move along.
Some pipelines, particularly from offshore oil and gas fields to shore
production facilities, carry oil, gas and condensate together. This is known
as multi-phase flow. At the shore end of the line a device called a slug catcher
(a series of parallel horizontal pipes) slows down the flow and enables the
liquid (oil and condensate) slugs to be separated from the gas.

Remote operating vehicles

Beyond diver depths of 200 metres, major enabling technical advances in
subsea work are typified by the use of remote operated vehicles (ROVs).
ROVs and remote tooling systems can be operated long distances from
the mother ship or control point. This enables subsea construction work,
such as connection of pipelines and production systems, to take place in
very deep water. The ROVs are operated from the surface, usually via an
umbilical. Cameras fitted to their hulls enable the operator to guide the
vehicles into position and then send signals to the mechanical arms to
perform the given task. In recent times, digital systems and the use of megapixel chips have revolutionised the visibility of the onboard cameras.

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In addition, capabilities of these vehicles developed for the military have

been made more generally available and the offshore petroleum industry
is developing autonomous underwater vehicles (AUVs). These are
untethered, free-ranging vehicles that can be programmed to do a task,
such as a grid pattern sea bed survey or a complete pipeline survey, and
then be picked up later once the job has been completed. There is no longer
any need to tow the vehicle during a survey, thus saving time which can
be devoted to other work.

Coal Seam Methane

Coal seam methane (CSM, sometimes called coal bed methane or coal seam
gas) is natural gas formed as part of the geological process of changing
organic matter into coal. The CSM is generated either from a biological
process resulting from microbial action or from a thermal process resulting
from increased heat with the depth of burial of the coal seams.
Unlike conventional natural gas reservoirs, where the gas is trapped in
the pore spaces within rocks like sandstone and limestone, the methane
trapped in coal is adsorbed onto the surface of cleats or joints in the coal
and held in place by the pressure of water within the seam. Thus coal is
both the source and the reservoir for CSM.
The surface area of the cleats is very large, so coal can potentially contain
more methane per unit volume than many conventional gas reservoirs.
The amount of trapped gas is related to the coal type and the pressure
and temperature of burial. However most coals have lower permeabilities
than conventional gas reservoirs and the production rates are lower, often
requiring some form of stimulation such as hydraulic fracturing.
This is achieved by drilling wells into the coal seam and pumping down
large volumes of water and sand to produce new fractures and/or force
open and extend the existing cleats and joints. Generally the fracturing
extends for up to several hundred metres in all directions from the well
bore. The sand helps to keep the fractures open.

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However the gas trapped on the coal surfaces cannot be released until the
water pressure holding it there is decreased. This is done by physically pumping
water from the wells until gas comes free and begins to flow naturally up
the wells. The time taken for gas to begin flowing after starting the pumps
can vary from several weeks to several months. The water can be re-injected
into formations below the coal seams, or collected in dams at the surface
where it is allowed to evaporate. Research is also being conducted into the
potential for using the water for agriculture and other purposes.
CSM is typically found at shallower depths than conventional gas
(200 metres 1000 metres compared to 1500 metres 4000 metres plus)
and reaches the surface at very low pressure. It must be compressed before
being sent through pipelines to market. Nevertheless, the shallower depths
do enable the use of small truck-mounted rigs to drill the wells which
improves the economics of an operation.

Wells are generally drilled in groups of five one central well and four
surrounding it called a five spot. The four outer wells are designed
to drain water away from the central well which can then flow gas to
surface. Development of a CSM field progresses when the four outer wells
are themselves surrounded by newly drilled wells pumping water until the
four also become producers and so on. A CSM field can contain hundreds
of wells during its lifetime.
Not all parts of a coal seam are conducive to CSM production and explorers
concentrate on sweet spots areas that have the highest degree of natural
fractures. These can be detected using the same geophysical techniques
employed in conventional petroleum exploration. Sometimes a CSM operation
is employed in advance of underground coal mining, the extraction of the
gas lessening the risk of explosion during the mining operation.
CSM has become an important source of natural gas in the USA where it
supplies about eight per cent of the nations gas demand. In Australia, CSM
is being produced in the Sydney Basin of New South Wales and in the
Bowen and Surat Basins of Queensland. The Queensland CSM flow supplies
30 per cent of the States gas demand.

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