Crude Oil Basics... A Refresher

By NKOSINATHI CELE and BRETT WINBERG

THE FORMATION OF OIL
Many hundred million years ago the processes… which created the underground oil and gas fields, began. Oil and natural gas come from a variety of mainly sea based living organisms (like plankton), as well as some plant material, which was trapped in sands on the bottom of early seas or inland lakes.

There are many theories about the formation process. Nevertheless, we do know that over time, this buried material was transformed into the substance we know today as… crude oil. That is why oil is termed fossil fuel… the sands and rocks in which the oil is situated are porous and the oil could move through tiny holes and cracks and form pools where there were large enough spaces in the rock layers. The oil became trapped here and as the earth was going through its formation processes… these formations were subject to much pressure and heat.

These underground pools of oil are found all over the world today, with major deposits being in the Middle East and North America. There are also sea deposits near Britain, Mexico and the Gulf as well as along the African West Coast. Each area of crude is unique in itself… different base make ups and different qualities from around the world. Formations of the earth let us know what types of crude and or gas will be found in certain areas of the world.

EXPLORATION - THE SEARCH FOR OIL
The first step in the oil business is to find where the oil is deposited underground. Estimates are that there are 1,000 billion barrels of oil reserves known today and another 500 to 1000 billion still to be discovered. (A barrel of oil is just over 159 liters).

The most common method used to find oil today is seismology. This is a technique, which makes use of sound and the way sound "bounces" off different types of rocks, much the same way as an echo. Geologists identify likely areas to prospect, making use of their knowledge of the rocks and soil in the area. With the seismic techniques and using modern computers they can create three-dimensional pictures of what the underlying rock formations are like and where there is likely to be oil.

OIL FIELD DEVELOPMENT
Once a likely area has been found an exploration well is drilled to see if there really is oil and/or gas. If oil is struck, further holes are drilled to establish the size of the oil pool. If it makes commercial sense to continue, further wells are drilled into various places in the oil pool. Oil wells are usually between one and five kilometers deep, but sometimes go down as far as eight kilometers. (as far as 18,000 feet in some cases) In the early days of the oil industry, there were often "gushers" as the drill broke through into the area where the oil or gas was trapped, usually under high pressure. This caused serious pollution and safety problems however, today’s technologies have now been developed to hold back the oil flow and to prevent these blowout occurrences.

Once the wells are in place, the pressure under which the oil has been trapped helps force the oil out of the well. In order to exploit the oil reserves fully, gas or water is pumped into the oil pool. The gas creates pressure, which forces the oil out. When water is used, the oil floats on top of the water and comes to the surface.

There are a large number of different oil rigs, from simple on-shore towers to enormous deep-sea structures taller than a skyscraper and anchored to the seabed. The type of rig used will depend on the place and conditions where the oil has been found.

Oil from the wells is treated with chemicals and heat to remove water and solids. The oil is then pumped into storage tanks at a gathering station. From there it is pumped to either a refinery or to a harbor where it is loaded onto the enormous oil tankers for shipment to a refinery elsewhere.

TYPES OF CRUDE OIL
Oil in its natural state consists of a mixture of chemicals. It is called "hydrocarbons" because it is a mixture of hydrogen and carbon (with some nitrogen, sulphur and oxygen). Because the mixtures vary we get an array of crude oils ranging in color from almost clear to black and in mass (measured by specific gravity) from light to heavy. Most crude oil purchased has a mixture of light and heavy oils.

The four most common types of crude oil are Brent (Europe), Dubai or Arab (Middle East/Africa), Tapis (Far East) and WTI (Americas). They vary in their mix of weight and cost; however it is also based upon location, which often determines which oil is purchased. Dubai is heavier than Brent. This weight factor means that Dubai costs slightly less because most of the value in the oil comes from the lighter part (or Fractions) of the oil, as this is what fuel is made from.

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