Article: Oil and Gas

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Article: Oil and Gas

Author: Olusola David, Ayibiowu

Edition : 013

Year :  September, 2017

Published Online : By Creative Arts Solution Foundation

Introduction

In the world today, research reveals that nearly all the existing power sources are generators in our community which use a heat cycle, This are like coals, oil, and gas, fired utilities, our automobiles, trucks, and trains, and even our nuclear fission utility power plants.

To understand the challenges the oil and natural gas industry faces in exploration and production, it helps to understand how oil and gas accumulations – often called “reservoirs” – develop in the first place:
Oil and natural gas are formed when decaying plants and micro-organisms are trapped in layers of sediment and – over the course of millions of years – become buried deep within the earth, where underground heat and pressure turn them into useful hydrocarbons, such as oil and natural gas.
The layers of rock in which hydrocarbons are formed are called source rocks. High pressures underground tend to squeeze hydrocarbons out of source rocks into what are called reservoir rocks. These are rocks, such as sandstone, which feature pores large enough to permit fluids like oil, natural gas, and water to pass through them. Since oil and natural gas are less dense than water, they will float upward toward the surface. If nothing stops this migration, the oil and natural gas may reach daylight through what is called a surface seep.
More often, however, hydrocarbons’ path upward is blocked by a layer of impermeable rock, such as shale, or by some other geologic formation. These trap the oil and natural gas, either in an underground pocket or in a layer of reservoir rock, so that it may be recovered only by drilling a well.
The Nigeria positioned for international oil, gas dominance despite challenges

guardian.ng Aug 22, 2017 7:43 AM

A recent PricewaterhouseCoopers (PwC) report suggests that by end-2019 Nigeria could assume the status of the largest producer of refined petroleum products in Africa. The projection sees Nigerian exports exceed 300,000 bpd by 2019 – up 350 per cent from 2016 production of 65,000 bpd.

By embracing a digital revolution in its oil and gas facilities, Nigeria could propel itself from the shadows of persistent underperformance to become a global energy powerhouse. This will be a catalyst for industrialisation and growth in many other economic sectors too.

Digitalisation in the energy sector involves the better use of data to manage and control multiple operations. It drives efficiencies in energy management and automation systems. Importantly, workers in a digital industrial environment enjoy a massive increase in skills and productivity.

Digital development is not confined to new oil and gas facilities. Existing oil and gas infrastructure, from pipeline to refinery, can easily be upgraded to digital automation. This means that Nigeria’s ageing oil refineries in Port Harcourt, Warri, and Kaduna can be optimised with digitalisation.

These facilities were built as early as 1978 but could be made far more efficient and productive, thereby significantly reducing Nigeria’s dependency on imported petroleum products. The benefits of this investment would be measured in billions of dollars.

Effective integration of digital technologies could reduce capital expenditure in the oil and gas sector by up to 20 per cent, cut upstream operating costs by up to five per cent and downstream costs by up to 2.5 per cent.

Nigeria’s best approach will be a combination of local skills and knowledge, and the expertise and experience of a proven international partner able to deliver digital technologies and automation, together with traditional instrumentation and controls, across the entire energy value chain. This further supports backward integration of skills and technical competence in Nigeria’s limited skilled workforce.

A recent PricewaterhouseCoopers (PwC) report suggests that by end-2019 Nigeria could assume the status of the largest producer of refined petroleum products in Africa. The projection sees Nigerian exports exceed 300,000 bpd by 2019 – up 350 per cent from 2016 production of 65,000 bpd.

In this scenario, Nigeria becomes an international trading hub similar to Australia, Russia, Europe, and the U.S. Gulf Coast, while the entire West Africa region becomes energy self-sufficient by 2019, thus eliminating the need to source refined oil products from the U.S. and Europe.

Despite dwindling crude oil sales to the West, West African demand for Nigeria’s crude oil is set to rise dramatically. The region annually consumes 22 billion litres of petrol, and Nigeria’s domestic market accounts for 17 billion of those litres, yet the country still imports around 80 per cent of this energy.

With 37.2 billion barrels of proven oil reserves, Nigeria could easily meet this demand locally through modernisation and continued exploration. The country’s refining capabilities are currently underperforming and notoriously inefficient, due to lack of maintenance and underinvestment in technology.

Nigeria also struggles with ongoing vandalism of its oil and gas infrastructure. Pipeline insecurity has a devastating effect on oil production, with a staggering financial impact. Technology is a significant part of the solution to this challenge, as it enables real-time monitoring of infrastructure and quicker incident responses.

Port Harcourt refinery, for example, has capacity for 150,000 bpd of oil production but has been running at just 10 per cent capacity for the past three years. This is mainly due to its reliance on 1980s technology now regarded as obsolete in the global oil and gas sector.

The consequence is lack of preventative and reactive maintenance, inaccurate forecasts and allocations, and soaring energy costs. To boost productivity and returns, Nigeria’s energy operators should rapidly adopt and integrate digital technology that improves efficiencies and up skills staff.

Instead of being a threat to the workforce, digital technology redefines the role of the worker, and it has the potential to bridge the blue and white-collar worker, to create what is termed the ‘grey-collar’ worker. Humans and machines are therefore not competing for jobs, but working together to create a new type of talent, which is a vital component to sustained sector growth and maturity.

In the near future, Nigeria’s oil and gas operations will have real-time access to data at the click of a button, from any location on earth. This essentially connects a team of global experts collaborating in real-time to drive improvements in exploration and extraction, health & safety, pipeline security, distribution, refining and transportation of the finished products.

And with a potential $300billion added to the African economy by 2026 through the adoption of digitalisation, Africa’s largest economy will receive a significant portion of that figure to advance its burgeoning oil and gas market.

This in turn addresses the triple threat of unemployment, inequality and poverty – paving the way for a society where business success leads to socio-economic advancement, such as new business development and job creation, and essential new infrastructure projects that include schools, hospitals, transportation networks and housing.

To make this a reality, the Federal Government of Nigeria should include a robust digitalisation policy and supporting legislation in connection to its Economic and Recovery Growth Plan 2017-2020 (ERGP), which sets out the medium-term structural reforms to restore economic growth, invest in people and build a globally competitive economy.

One of its key priorities is to ensure power and petroleum product efficiency, which can only be achieved through a digital transition in the oil and gas sector.

Oil and gas operators in Nigeria should be early adopters of technology, their employees should be proactively trained in the application of the new technology, and the industry should be supported by an original equipment manufacturer (OEM) with proven global experience across the entire upstream, mid-stream and downstream value chain.

Tifase is the Chief Executive Officer, Siemens Nigeria, and a key player in the country’s push for investment and growth in the oil and gas sector

Just to mention afew, Advanced Drilling Techniques

Oil and natural gas wells have traditionally been drilled vertically, at depths ranging from a few thousand feet to as deep as five miles. Today, advances in drilling technology allow oil and natural gas companies to reach more reserves while reducing environmental impact by:
reducing the surface “footprint” of drilling operations, drilling smaller holes and generating less waste creating less noise, avoiding sensitive ecosystems, and completing operations more quickly.
Here are some technologies used:
Horizontal Drilling - Horizontal drilling starts with a vertical well that turns horizontal within the reservoir rock in order to expose more open hole to the oil. These horizontal “legs” can be over a mile long; the longer the exposure length, the more oil and natural gas is drained and the faster it can flow. More oil and natural gas can be produced with fewer wells and less surface disturbance. However, the technology only can be employed in certain locations.
Multilateral Drilling - Sometimes oil and natural gas reserves are located in separate layers underground. Multilateral drilling allows producers to branch out from the main well to tap reserves at different depths. This dramatically increases production from a single well and reduces the number of wells drilled on the surface
Extended Reach Drilling - Extended Reach Drilling - Extended reach drills allow producers to reach deposits that are great distances away from the drilling rig. This can help producers tap oil and natural gas deposits under surface areas where a vertical well cannot be drilled, such as under developed or environmentally sensitive areas. Wells can now reach out over 5 miles from the surface location. Offshore, the use of extended reach drilling allows producers to reach accumulations far from offshore platforms, minimizing the number of platforms needed to produce all the oil and gas. Onshore, dozens of wells can be drilled from a single location, reducing surface impacts.
Complex Path Drilling - Complex well paths can have multiple twists and turns to try to hit multiple accumulations from a single well location. Using this technology can be more cost effective and produce less waste and surface impacts than drilling multiple wells.

In summary,

We don't have to worry about running out of oil or natural gas any time soon.At our current rate of use, we have oil and natural gas reserves to last 60-90 years. And while the total amount of oil and natural gas isn't increasing, our ability to find and extract oil and natural gas from new sources expands almost every day! We now produce natural gas from buried coal seams, oil and natural gas from deep deposits located miles beneath the surface of the earth, and in the deep ocean, hundreds of miles offshore and in water depths greater than 10,000 feet.

References:

guardian.ng Aug 22, 2017 7:43 AM

www.api.org