If you are thinking of investing in the oil and gas industry, this article aims to give you some background information before making an investment decision. It looks at the process of drilling for oil and explain how offshore drilling and directional drilling work.
What are the potential problems when drilling for oil?
Oil and gas occur in the pores of porous sedimentary rocks, thousands of metres below the earth’s surface. Such rocks are subject to enormous pressures from the weight of the overlying rock.
When drilled in to, this pressure forces out the oil, similar to squeezing out a sponge which means, for example, that extreme caution is needed when drilling a wildcat well.
If the drill hits oil then the immense pressure could lead to the oil spewing out of the hole creating a blowout. In the early days of oil exploration blowouts were common. Often, they would ignite, forming raging fires which were frequently fatal.
The most famous blowout happened in 1901, at Spindletop in Texas. It lasted nine days before it could be controlled, during which time it spewed out 450,000 barrels of oil. To avoid this, modern drilling operations use a series of valves and other measures to control the flow.
When drilling into rock, it is necessary to bring the crushed rock to the surface. This is achieved by pumping water, mud and chemical additives (drilling mud) into the hole which returns through a hollow central shaft in the drill flushing out the rock.
The rock is filtered from the stream allowing the drilling mud to be reused. The pressure of the drilling mud also helps avoid a blowout.
Periodically, the drill is removed, and the resulting hole cased with metal and concrete. Once the concrete sets, drilling is resumed.
Progress is monitored using logging tools that are lowered into the mud-filled hole and record electrical, acoustic and radioactive properties of the rock.
Once oil has been located, additional tools are used to carry out a drill stem test that can assess the potential quality and flow rate of the well.
Offshore drilling
Offshore drilling is carried out from a floating oil rig into an ocean bed that can be thousands of metres below the surface. The rig is attached to the ocean bed by a large steel pipe, known as the marine riser.
Directional drilling
Oil well drilling is not necessarily vertical. Horizontal drilling techniques were developed in the 1930s and are quite common.
Horizontal drilling has many potential benefits, for example: enabling drilling where vertical drilling would be impossible and connecting multiple production sites. However, it has also been used to ‘appropriate’ oil from neighbouring oil fields.
Directional drilling in combination with hydraulic fracturing is the technology used to extract oil and gas from shale deposits. This process has revolutionised the US oil industry.
Oil and gas industry
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