The first step in the oil and gas business is finding the deposit. But virtually in all countries, mineral rights are vested in the state and oil industry operations can only be carried out under licenses or contracts granted by the state.
Getting the licenses to explore or produce hydrocarbons is the first stage of any project. These agreements often stipulate amounts of seismic surveying or numbers of wells to be drilled, as well as training of nationals and local souring of goods and services.
In the Middle East some of the oil fields are bordering/overlapping different concessions. In this case special agreement is signed..
The decision on whether or not to explore in an area also depends on the probability of finding hydrocarbons; economic aspects such as transportation, manpower and drilling rig costs; and the nature and cost of the necessary exploration and possible development programmers. Assessment of these factors indicates whether an exploration program is justified.
Advances in exploration technology are helping to identify and analyze smaller and more complex fields. A range of techniques is available to home in on potential oil and gas-bearing structures—revealing more and more about progressively smaller areas
Appraisal is the process of finding out what is really there, and requires drilling usually a number of wells - no-one has yet found a way of confirming that there is oil or gas without drilling down to it.
From the seismic data, computers analyze the material and highly skilled technicians interpret the results to ascertain the likelihood and location of possible hydrocarbons far beneath the surface.
Just finding the oil and gas is not enough; evaluation of each potential resource must take place prior to development. The oil or gas has to be of a certain type, quality and quantity that makes extraction economically worthwhile.
Reservoir characterization is achieved by the construction of complex, quantified geological models, using sophisticated probabilistic modeling programs run on powerful supercomputers. Multi-component reservoir simulation programs are then used to assess alternative field development schemes and recovery methods.
Once promising amounts of oil and/or gas have been discovered, the next step is to begin to formulate a development and production plan. This involves an integrated effort between geologists and petrophysicists, engineers—reservoir, production, design, and drilling—and production operations staff.
Development studies on a possible new field are undertaken to assess not only technical feasibility and economic attractiveness of bringing the oil and gas to the market but also the environmental impact of possible activities.
These studies also address the necessary physical infrastructure - such as pipelines, storage facilities, tanker terminals or oil/gas processing plants, and accommodation, along with the economics of the proposed investment.
Most production rights are owned in partnerships, often including the national government. Often an oil company operates production on behalf of joint ventures in which it has a share. In other ventures it is a shareholder in fields managed by its partners.
Once an oil or gas field has reached the end of its economic life it has to be decommissioned. For onshore operations, the land is returned to its original state, or to whatever use is defined by host governments.
For offshore fields, there are more complex issues. A number of international laws and regulations apply, and guidelines and standards have been published by the International Maritime Organization. However, in some circumstances, a case-by-case approach may be adopted.
We must add that today a well can “live” much longer, that’s is being achieved through advanced recovery techniques – such as E.O.R, or by concentrating oil through several wells into one central well etc.
