Oil and Gas Production - An Introduction

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Sumit Dutta
06/04/2013

Effective and efficient oil and gas production is the lifeblood of this industry.

Following the exploration phase comes the production phase. This can only happen once a well has been completed. This involves drilling the well and fitting casing pipes and tubing to transport the hydrocarbons within the well. To ensure the flow of hydrocarbons is regulated; valves are used to control the rate and flow of the reserve. In some situations there is not enough pressure to tap the well so artificial lift systems and pumps are also used to help extraction.

Once a well has been tapped, the production phase begins in earnest. This belongs with Primary Recovery where hydrocarbons are forced from the sub surface pores and openings to the main reservoir and then transported to the surface to be processed. Processing encompasses filtering out the mix of water, gas and oil into separate components. The water is removed and the oil and gas is then treated, purified and analysed.

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Enhanced Oil Recovery methods is used to when natural pressurise and gas lifts and pumps have extracted as much as they can but there are still more hydrocarbons in the reservoir – sometimes as much as 95 of the entire well. This usually involves oil and gas technology like water flooding, gas injection, chemical flooding, and thermal recovery and helps significantly increase production levels.

Production Costs vary depending on region and technology used. Below are average oil and gas production costs within the US and other key regions:

Costs for Producing Crude Oil and Natural Gas, 2007–2009

	Lifting Costs	Finding Costs	Total Upstream Costs
United States – Average	$12.18	$21.58	$33.76
On-shore	$12.73	$18.65	$31.38
Off-shore	$10.09	$41.51	$51.60

All Other Countries – Average	$9.95	$15.13	$25.08
Canada	$12.69	$12.07	$24.76
Africa	$10.31	$35.01	$45.32
Middle East	$9.89	$6.99	$16.88
Central & South America	$6.21	$20.43	$26.64

15,618 cubic feet of natural gas equivalent to one barrel | Source: US EIA Energy Information Association

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