Professional Documents
Culture Documents
By LYOIDAH KICONCO
GEOLOGIST to AfricanCentreforMediaExcellence(ACME) 10TH APRIL2012
PRESENTATIONOUTLINE
1. Definitions 2 FormationofPetroleum 2. 3. PetroleumSystemElements 4 The 4. Th petroleum t l V Value l Chain Ch i 5. InstitutionalandRegulatoryFramework 6. Expectationsfrom f the h Media d 7. Challenges 8. Conclusions
PETROLEUM
Thisisahydrocarbon y (H&C), ( ),g generated bynaturalmechanismsandmanifests o of o Solid, So d,liquid qu dor o gastoyield y e d inform fuels.
9April,2012
PETROLEUMGEOLOGY
SEDIMENTARYBASIN
Siteswherep petroleumisformedby ychemicalreactions fromsedimentarybiogenicprecursormaterial,whereitis redistributedbymigrationviapermeablepathways,and whereitisdumpedandstoredinthereservoirrocksor dissipatedanddestroyedbychemicalreactions Anygeographicalfeatureexhibitingsubsidenceand consequentinfillingbysedimentation sedimentation.Asthesedimentsare buried,theyaresubjectedtoincreasingpressureandbegin theprocessoflithifaction.
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Petroleum P l crude d oil iland dnatural lgas arefound f din i certain i layersofrockthatareusuallyburieddeepbeneaththesurfaceof theearth.Inorderforarocklayertoqualifyasagoodsourceof hydrocarbons,itmustmeetseveralcriteria.
REQUIREMENTSFORHYDROCARBONFORMATIONAND ACCUMULATION SedimentaryBasin Temperatures BurialDepth>3km OrganicMatter Pressures andtime Source S rock k Reservoirrock Cap C rock/seal k/ l
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REQUIREMENTSFORHYDROCARBONFORMATIONAND ACCUMULATION
S di Sediment ti input t
Organic matter
Sedimentary basin
+O2
- O2
Preserved organic matter changes into a source rock k with ith increased i d sediment di t input, compaction and burial.
9April,2012
PETROLEUMSYSTEMELEMENTS
Geographic Extent of Petroleum System Extent of Play Extent of Prospect/Field O
Stratigraphic Extent of Petroleum System
1. Petroleum
Source rocks
O
2. Reservoir
rocks
Essential Elements of Petroleum System
Seal Rock Reservoir Rock Source Rock Underburden Rock Basement Rock Top Oil Window Top Gas Window
Overburden Rock
PETROLEUMSYSTEMELEMENTS
Source Rocks Sedimentary y rock containing g organic g material, , which under heat, time and pressure was transformed to liquid or gaseous hydrocarbons. Source rock is usually shale or limestone. Reservoir rock Any rock that has sufficient porosity and permeability to permit the storage and accumulation of crude oil or natural gas under adequate trap conditions, and to yield the h d hydrocarbons b at t satisfactory ti f t flow fl rate t upon production. d ti Sandstones, limestones and dolomites are the most common. Also so in fractured actu ed igneous g eous a and d metamorphic eta o p c rocks. oc s
PETROLEUMSYSTEMELEMENTS
Good reservoir rocks must have porosity and p permeability y z Porosity z A measure of the openings in a rock, openings i i in which hi h petroleum l can exist i z Porosity is the ratio or the pore volume of the bulk rock material
z Permeability y
Aporeisasmallopenspace
Property of a porous medium to transmit fluids when a pressure gradient is imposed. i the i.e h poresof fthe h rock kmustbe b connected d togethersothathydrocarbonscanmovefromone poretoanother
Connectedporesgivearock permeability
PETROLEUMSYSTEMELEMENTS
Petroleum Traps Any y barrier to upward p movement of oil or g gas, , allowing g either or both to accumulate. It includes a reservoir rock and an overlying updip impermeable cap cap. A trap is basically a geometry of a reservoir rock rock. Classified into two basic types: yp structural traps p and stratigraphic traps. Structural traps are traps that are formed because of a deformation in the rock layer that contains the hydrocarbons such as fault traps and anticlines anticlines.
PETROLEUMSYSTEMELEMENTS
Ananticlineisanupwardfoldinthelayersofrock, muchlikeanarchinabuilding.Petroleummigrates intothehighestpartofthefold, fold anditsescapeis preventedbyanoverlyingbedofimpermeable rock Afaulttrapoccurswhentheformationsoneither sideofthefaulthavebeenmovedintoaposition thatpreventsfurthermigrationofpetroleum. g p traps p aretraps p thatresultwhenthe Stratigraphic reservoirbedissealedbyotherbedsorbya changeinporosityorpermeabilitywithinthe reservoirbeditself. itself E.g. E g atiltedorinclinedlayerof petroleumbearingrockiscutoffortruncatedby anessentiallyhorizontal,impermeablerocklayer.
PETROLEUMSYSTEMELEMENTS
Seal Animperviousorimpermeablebedcappingthereservoir. Migration Movementofgeneratedhydrocarbonsfromthesourcerocktothe reservoirrockinatrapthroughconduitssuchaspermeablebeds, fractures,andfaults. Timing Relationshipbetweenthetimeoftrapformationandtimeof h d hydrocarbon b generation. ti Goodtimingisforthereservoir,trapandsealtobealreadyinplace beforethesourcerockgenerateshydrocarbonsandmigrationstarts. Thisissometimescalledthecriticalmoment
SECURINGLICENSE/LEASE
z Afterselectingalikelyarea,therighttodrillmustbesecured
before b f drilling d illi canbegin. b i z Thisusuallyinvolvesleasingthepetroleumrightsofthedesired fromtheowner(GovernmentforUganda Ugandascase). z Conditionsforacquiringthelicence arespecifiedinthe petroleumlegislationandagreements(PSAs).Thesemayinclude: z Signaturebonus z Royalty z Production P d ti sharing h i z Tax z E.t.c Etc
DRILLING
z z
Once an area has O h b been selected l t d and d th the right i ht t to d drill ill th thereon has been obtained, actual drilling may begin. The most common method of drilling in use today is rotary d illi drilling. R Rotary t d drilling illi operates t on th the principle i i l of fb boring i a hole by continuous turning of a bit. The bit, is attached to the drill stem, composed of hollow l lengths th of f pipe i leading l di to t the th surface. f As A the th hole h l gets t deeper, more lengths of pipe can be added at the top. The drilling fluid, also known in the industry as mud, it is actually t ll a prepared d chemical h i l compound. d Th The drilling d illi mud di is circulated continuously down the drill pipe, through the bit, into the hole and upwards between the hole and the pipe to a surface pit pit, where it is purified and recycled recycled. The flow of mud removes the cuttings from the hole without removal of the bit, lubricates and cools the bit in the hole, and prevents a blow out which could result if the bit punctured a high pressure formation.
DRILLING
The Th cuttings, tti which hi h are carried i d up by b the th drilling d illi mud, d are usually continuously tested by the petroleum geologist in order to determine the p presence of oil. The final part of the hole is what the operating company hopes will be the production hole hole. But before long long, the formation of interest (the pay zone, the oil sand, or the formation that is supposed to contain hydrocarbons) is penetrated t t d by b the th hole. h l It is i now time ti for f a big bi decision. d i i The Th question is, "Does this well contain enough oil or gas to make it worthwhile to run the final p production string g of casing g and complete the well?"
OILPRODUCTION
Once an accumulation O l ti of f oil il has h been b found f di in a porous and permeable reservoir, a series of wells are drilled in a predetermined pattern to effectively drain this "oil oil pool" pool . Well spacing is usually determined by the distance gy will move commercial q quantities the reservoir energy of oil to individual wells. The rate of production is highest at the start when all of f the th energy from f the th dissolved di l d gas or water t drive d i is i still available. As this energy is used up, production rates drop until it becomes uneconomical to operate although significant amounts of oil still remain in the reservoir. y recovery y methods such as steam injection j Secondary or water flooding where Water or steam are injected into the reservoir in certain wells in order to renew a 9April,2012 part of the original reservoir energy
SALEOFOIL
Oncetheoilisoutofthegroundand i the into h holding h ldi tanks, k it i mustbe b sold. ld Inmostcaseseachholderofaworking interesthastherighttotakehis portionofproductioninkind, therefore, h f make k his h ownarrangements foritssale. Sometimes,however,alltheholders ofaworkinginterestofawellenter intothesamearrangementwiththe samebuyeroftheoilproduction. 9April,2012
MIDSTREAM
DOWNSTREAM
Pre-bid
Field Development
Production
Decommisioning
Search for petroleum accumulations Methods include gravity, magnetic, geological mapping, seismic and drilling Ends when reservoir(s) have either been found or not
Establishing contents (oil and/or gas) Establishing ability/ease to flow Establishing the extent of distribution
APPRAISAL
30 230'
3015'
3030'
3045'
31
3115'
- 1 60
3130' 230'
- 170
- 190
B'
LEGEND
Rift valey sediments: soils and marines Pleistocene volcanic rocks Ecca series shales (Karro) Mityana Series Singo series: conglomerates, sandstone & subordinate shale Bunyoro series & Kyoga series: Shales, arkoses & quartzites Kibalian System(presumed): Amphibolites. Madi series: shists, quartzites marbles and gneisses Karagwe-Ankolean system Buganda-Toro system Mirian gneisses: flaggy gneisses, affected by the mirian tectonism in W. Nile Granites Undifferentiated Gneisses Banded gneiss of Aruan tectonic age in West Nile
S "
MOYO
S "
NIMULE
215'
S " S "
ARUA U
0
- 13 0
- 140
- 12
ARU
- 110
S "
- 18
GULU
- 120
- 21
145'
-120
Cataclastites
&
- 14 0
&
S "
HOIMA
-15 0
-150
-130
-120
-1 30
- 1 20
115'
&
%
S "
- 1 40
&
S "
-12
-1 40
- 210
FORT PORTAL
S "
MUBENDE
- 15 0
S "
KASESE
045'
- 15
" S
0120 - 11-1
- 16
MASAKA
- 10
S "
ISHASHA
S "
S "
BUSENYI
S "
MBARARA
RUKUNGIRI
S "
NTUNGAMU
30
3015'
- 12 0
-150
- 150
- 14
-1
40
10000
10000 20000
3030'
3045'
31
3115'
30
&
-1 60
-1
&
130'
S "
-1
- 1 60
MASINDI
- 14 0
-160
- 18
40
-1
Granites
80
-1
S "
40
&& -
- 13 0
- 120
MAHAGI
- 220
- 15 0
- 12 0
3130'
0 - 16
-212 -189 -178 -169 -162 -156 -149 -143 -136 -128 -118 -101
215'
- 1 30
- 180
00 -2
-1
50
-2 0 0
60 -1 - 1 70
- 13 0
- 13 - 14 0 0
145'
- 180
- 20 0
130'
- 130
115'
- 1 40
1 045'
- 1 20 - 130 - 1 40
Exploration Appraisal
Preparing a reservoir for production z Includes drilling wells for production z Preparing facilities for collection, processing and disposal
z
FDP components
Resource base z Production facilities z Transport options z Market and sales options z HSE and d risk i k analysis l i z Cost analysis z Economic evaluation z Project execution
z
Removal of petroleum from a subsurface reservoir to the surface z Preparing petroleum for transportation and/or refining (separation, gauging & storing)
z
oil is converted into several products. Products depend on both type of Crude and size of refinery
Downstream involves; Marketing Marketing of refined products, Transportation and distribution of the products
REGULATORYANDINSTITUTIONAL FRAMEWORK
REGULATORYFRAMEWORK
PetroleumExplorationandproductioniscurrentlygovernedby; 1. ExistingLaws ThePetroleum(ExplorationandProduction)Act,CAP150,LawsofUganda,2000 2 Policies 2. TheEnergyPolicy,2002 TheNationalOilandGasPolicy2008 3. Regulations ThePetroleumExploration(Conductofexplorationoperations)Regulations1993 4 Production 4. P d ti Sharing Sh i Agreements A t (PSA) WorkPrograms Fiscalregimes g (Rentals, ( ,stateParticipation, p ,profit p oilshare, ,Costrecovery yetc) ) 4.Environment,Wildlife,Waterstatutesandguidelines
REGULATORYANDINSTITUTIONAL FRAMEWORK
NATIONAL OIL AND GAS POLICY
Use Use the country countrys s oil and gas resources to contribute to early achievement of poverty eradication and create lasting value to society
Provideaframeworkfor:
Efficientpetroleumresourceexploitationandutilisation Useofoilandgasactivities,resourcesandrevenuesto createlastingvaluetoUgandasociety Emphasizesvalueaddition
REGULATORYANDINSTITUTIONAL FRAMEWORK
NATIONAL OIL AND GAS POLICY CONTD
REGULATORYANDINSTITUTIONAL FRAMEWORK
INSTITUTIONALFRAMEWORK
MINISTRY OF ENERGY AND MINERAL DEVELOPMENT
Minister of Energy and Mineral Development
Minister of State for Energy Minister of State for Mineral Development
Permanent Secretary
Uganda Electricity Generation Co. Ltd. Uganda Electricity Transmission Co. Ltd. Uganda Electricity Distribution Co. Ltd. Kilembe Mines Rural Electrification Agency (REA)
Resource Centre
Geophysics Div.
REGULATORYANDINSTITUTIONAL FRAMEWORK
PETROLEUM EXPLORATION AND PRODUCTION DEPARTMENT (PEPD)
COMMISSIONER U1 ASSIST. COMMISSIONER (Geology) ASSIST. COMMISSIONER (Geophysics)
U2
PRINCIPAL GEOPHYSICIST PRINCIPAL GEOPHYSICIST (Seismic & Wells) (Gravity & Magnetics)
U3
SENIOR GEOCHEMIST
U4
GEOLOGIST PALYNOLOGIST GEOLOGIST ORGANIC GEOCHEMIST (Basin Evaluation) (Well Site) (2) (2) (2)
PERSONAL SECRETARY
LABORATORY TECHNICIAN GEOPHYSICAL TECHNICIAN (2) GEOLOGICAL ASSISTANT LABORATORY ATTENDANT GEOLOGICAL ATTENDANT GEOPHYSICAL TECHNICIAN (2)
STORES ASSISTANT GR 2
STENO SECRETARY
U6
U7
COPY TYPIST
U8
SURVEYING OFFICE DRIVER/MECHANIC ATTENDANT WATCHMAN (2) ATTENDANT (9) COXSWAN (2) (2) (4) Scale Approved Posts Filled Posts Vacant Posts U1 3 3 0 U2 U3 4 5 3 3 1 2 U4 U5 18 2 16 1 2 1 U6 U7 4 3 3 3 1 U8 Total 21 60 13 45 8 15
NB Posts indicated in boxes are to be filed by staff seconded from Ministry Headquaters. GR- Grade
REGULATORYANDINSTITUTIONAL FRAMEWORK
FUNCTIONS OF PEPD Creation of value from petroleum activities by:
Initiating Policy and Legislation for the sub-sector of petroleum exploration and development Promotion of petroleum exploration Participation in contract negotiations before award of licenses Monitoring and regulating the work of oil companies licensed in the country Undertake U d t k national ti l capacity it building b ildi for f the th upstream t petroleum t l sub-sector
REGULATORYANDINSTITUTIONAL FRAMEWORK
z
CHALLENGES
Experiences from some producing d i countries t i oil and gas
NORWAY, RUSSIA TO RESTART BARENTS SEA DISPUTE TALKS The disputed Barrents Sea area covers an area of 173,000 km2 Estimated to hold vast resources estimated ti t d at t 40 billion barrels of oil equivalent Untouchable U t h bl f for exploration l ti and development for the last 30 years Fuelled F ll d b by political liti l desire d i to t control natural resources
Disputedzone
NIGERIA, CAMEROON SIGN NIGERIA AGREEMENT ENDING DECADESOLD BORDER DISPUTE Share the 1,000 mile oil rich Bakassi peninsula in the Gulf of Guinea Reserves estimated at 24 billion barrels of oil Have been at war for control of the resources for over one decade In 2002, World Court ruled at the Hague in favour of Cameroon
Lack of GPS Coordinates Some references may no longer exist since 1915 when the treaty was signed between Belgium and UK establishing the border
Sophisticated positioning equipment i t may not t allay ll f fears of f the other parties Difficulties of agreeing the boundary after discovery of oil
A boat on Lake Albert
Pictures showing the meandering River Semliki that separates Uganda from DRC
OTHERS
Rebellions in many African counties have dragged on for long because of the oil wealth
Ivory Coast Angola Guinea Central African Republic (CAR) etc.
Sabotage is extremely costly, since the industry employs very expensive equipment and facilities
Oil in most of Africa is synonymous with greed greed, theft, mismanagement, conflict, corruption, poverty and misery in all its forms. Have we learnt any lessons about what to avoid?
z z
Not manifested in the oil and gas industry in Africa Governance is like a chain
A chain is as strong as the weakest link We are all part of the chain We share responsibility
Uganda has a unique opportunity to be an example to the rest of Africa of good governance in the oil and gas industry
Experience has shown that where there has been Transparency and Accountability in the oil i d industry, the h N Nations i h have performed f d well ll i in other sectors as well.
The high Oil prices disrupted many economies Focusing on oil revenues and ignoring other sectors of the economy
C Case of f Nigeria Ni i
Therefore: Let us Have Proper p p plans. Oil should support other sectors of the economy Create a special reserve fund with stringent conditions for its utilization
Case of Norway
Oil is a non-renewable resource and we should Invest oil revenues wisely for the future
Policies, laws, regulations g and institutions need to be in place Many countries discover and some start producing oil and gas without the necessary institutional framework Chad used its mining law to negotiate petroleum agreements and has had to depend on other organizations (IMF/WORLD BANK) to manage the revenues
Windfall petroleum prices have led some Governments asking to re-negotiate their contracts with oil companies E.g. g Venezuela, , Bolivia, , Algeria, g , UK, , France, , Russia etc.
Siphoning
Breaking/puncturing pipelines to siphon crude oil
ENVIRONMENTALCHALLENGES
OVERVIEW OF ASPECTS
The Oil and Gas Industry
z z z
z z
ENVIRONMENTALCHALLENGES
Flowtesting
Oilspillcleanupoperation
LESSONSFROMPRODUCINGCOUNTRIES
Boundary y disputes p
The boundary needs to urgently be demarcated
Should attempt to solve oil and gas issues through Dialogue Handle all oil and gas issues in a transparent and accountable manner C ti Continue t to have h stable t bl politics liti and d good d security it
Exploration workers kidnapped in Pakwach in 2005 by gunmen Attack ttac o on Kichwamba c a ba Technical ec ca Co College ege happened appe ed when e
LESSONSFROMPRODUCINGCOUNTRIESCont
We Ought to Manage our Expectations
How cheap can it get?, Norway is the 3rd largest exporter yet petrol cost US$ 1.8
District boundaries a new complication Radio talk shows show historical grievances and antagonism
Source: Daily Monitor
EXPECTATIONFROMSTATESECURITYAGENCIES
Provision of security to oil and gas activities during exploration, development and production
Activity location location, duration and number of participants Activities near DRC Security ? Investment usually very high and time is costly
Geological mapping and geophysical surveys (US$ 100,000 300,000) Seismic surveys (US$ 1 8 million) Drilling one well (US$ 3 12 million)
A lot of equipment transported from Mombasa to the field, others come by air through Entebbe Participants include national and a large number of foreign workers
Participants aspirations may not always be in harmony with the aspiration of the country
National Interest
In securing and facilitating investments in oil and gas, its important to remember the overriding importance of national interest Large investments made by oil companies and the value l attached tt h d to t them th by b the th countries t i can lead l d to t compromising national interests and sometimes sovereignty
In the amidst of any excitement, these needs to be anticipated and prepared for
EXPECTATIONSFROMTHEMEDIA
Regarding the activities Status of the licensing Challenges N d of Needs f th the sector t
People p use information to create knowledge, g , but not j just in the sense of data and facts but in the form of representations that provide meaning and context for purposive action action This will ensure transparency and accountability in undertaking the activities
THEFUTURE
Thepast&present;Akeytothefuture. Thepast:Atectonicblessing
Source,Reservoir,Traps,Seals,Migration
Thepresent: Ongoingsurveys&drilling
OilCompanyinterests
TheFuture:
EconomicBoom,Ruraldevelopment,etc. OPEC What Wh ifwehit hi agiant i Elephant El h like lik Iraq I orIran? I ?
9April,2012
CONCLUSION
1. 2.
Oiland/orgasisthelifebloodofmoderneconomies Managementoftheseresourcesneedtobetaken cautiouslybecausetheyarenonrenewable Thereisneedforappropriatedisseminationof informationtoallstakeholders Theroleofmediainensuringinformationdissemination cannotbeoveremphasised Knowledgeispowerletsshareittoempowerothers. Knowledgeisthemostimportantfactorofproduction andeconomicdevelopment Weallneedtoembracethegiftmothernaturehasgiven usandg guarditj jealously y
3 3.
4.
5.
6.
LYOIDAH KICONCO
Msc, GeologyMsc, Geology gy-Petroleum Geology gy Msc, Msc , GeologyGeology-Hydrogeology Dip. Mgt of Petroleum Operations Bsc. Bsc . Geology, Geology Chemistry
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