03.08.2009

Marine life, from the simplest plankton and single-celled life forms to the more complex crustaceans and fish species, contains carbon molecules. As these animals die and decay over millions of years, carbon molecules, through processes of heat and pressure, degrade into hydrocarbon compounds. Sufficient volumes of accumulations may form oil and gas reservoirs over time. Increasing heat and pressure help to encourage decomposition of carbon compounds from the remains of marine life. Larger organic molecules crack to form lower weight compounds leading to the separation between the volatile products (hydrogen and simpler chain carbons such as methane) and liquid products. The transformation of this organic material, called kerogen, into oil and gas hydrocarbons leads to the progressive increase of the hydrogen/carbon ratio. Generally, the lower the temperature and shallower the depth, the heavier the hydrocarbon component formed. Though temperature is the critical factor, the amount of time that the organic material is exposed to heat and pressure is also an important factor in the production of hydrocarbons. These factors determine the relative amounts of natural gas versus oil that is found in a particular reservoir. The figure below shows the relationship between depth, temperature, and probable petroleum production. In a simple sense, gas, oil, and solid hydrocarbons such as coal are merely different stages in the creation of hydrocarbons from organic matter. Any sediment capable of becoming a source rock for oil may also produce gas. In this case, gas produced will be associated gas, occurring in the same reservoir and coexisting with crude oil. However, not all sediment capable of producing gas will also produce oil, leading to the huge reserves of nonassociated gas, or gas without oil, which is found in many parts of the world. Much like a kitchen sponge appears to be solid, but once it is squeezed, liquid drains out, rocks may appear solid, but contain liquids inside the void spaces between rock grains. A bucket of beach sand is another analogy. If a glass of water is poured onto the sand, the water appears to disappear into the sand. It actually fills the empty pore spaces between the individual sand grains. As more water is added, it continues to fill the entire pore space until there is no more empty space, forcing the water to overflow from the bucket. Oil and gas fill the pores of rocks in the same way as the water in the bucket. Imagine if two solid layers like the faces of a steel vise squeeze the bucket of sand. If the bucket is tightly packed with sand, the grain structure of the sand in the bucket prevents the bucket from deforming. If a hole is drilled through the steel faces of the vise, any liquid in the pores of the rock will squirt out. A well drilled into an oil or gas reservoir acts the same way. If the oil and gas reservoir pressure is higher than the pressure in the well, the hydrocarbon is forced to come out of the well.

(1) UN Resolution 1974 which states that “It is necessary to ensure effective cooperation between countries through the establishment of adequate international standards for the conservation and harmonious exploitation of natural resources common to two or more States in the context of the normal relations existing between them”; (2) UN Charter of Economic Rights & Duties of States 1974 which states that “In the exploitation of natural resources shared by two or more countries, each State must cooperate on the basis of a system of information and prior consultations in order to achieve the optimum use of such resources without causing damage to the legitimate interest of others”;(3) 1982 UN Convention on the Law of the Sea which states that “Pending agreement as provided under paragraph 1, the States concerned, in a spirit of understanding and cooperation shall make every effort to enter into provisional arrangements of a practical nature and, during this transitional period, not to jeopardize or hamper the reaching of the final agreement. Such arrangements shall be without prejudice to the final delimitation.”

The construction of two or more wellbores into one or more reservoirs for the purpose of managing and optimizing fluid movement within the reservoir(s). These lateral wellbores are connected back to a common main bore that extends to the surface. Various levels of completion systems can be installed in a multilateral well to enable it to produce from several zones simultaneously

“Israel and the Palestinian side agree to cooperate concerning the production of oil and gas in the cases of joint geological structures.”

The Louisiana discovery known as the Haynesville Shale, for the dense rock formation that contains the gas which could holds some 200 trillion cubic feet of natural gas. That is the equivalent of 33 billion barrels of oil or 18 years worth of current US oil production. Some industry executives think the field could even be several times that size.

All offshore operators currently active in exploration and production on the UKCS are party to a voluntary oil pollution compensation scheme known as OPOL. Since the early 1970’s there has been a very substantial increase in the exploration for, and production of, oil from sources beneath the seabed off North-West Europe. At the same time a greater awareness of the possibility of damage to the environment from such activities has developed throughout the world, and accordingly those engaged in offshore exploration and production are taking the greatest precautions to ensure that the risk of oil pollution is reduced to a minimum, and that the highest safety standards are observed. Nevertheless the possibility exists that an accident could occur, and the oil industry therefore developed an Agreement to ensure that, in the event of a spillage or escape of oil, claims for pollution damage are met and the cost of remedial measures reimbursed

Nanotechnology, the control of matter on the atomic and molecular scale, might someday boost the average global recovery factor of oil and gas by 10 percentage points. Some nanotechnology researchers have said that the commercial use of downhole nanosensors which might begin in 5-10 years (2015-2020) have the potential to assess rock and fluid properties from inside the pore spaces of reservoirs

An important reminder that the Marshallian scissors have two components – supply and demand. And no, oil is not different. The US 2009 economic stimulus package includes $56 billion in grants and tax breaks for clean energy projects over the next ten years and a budget of $15 billion a year to fund renewable energy projects. In addition, the US energy bill envisions an emissions cap and trade system that will finally price carbon in the US. The effects of all this will be so profound that some people believe it may herald the arrival of peak oil demand rather than peak oil supply