Tasks as diverse as flying an airplane, manufacturing a wind turbine and reading this article on the Internet have something in common: They all require energy. Needless to say, energy makes our high standard of living a reality.
The majority of the world's energy comes from the hydrocarbons coal, natural gas and oil. According to the International Energy Agency, these three fossil fuels constitute approximately 80% of the world's primary fuel mix. This percentage is expected to remain largely unchanged through 2030, despite efforts nowadays to exploit renewable energy sources. Together, oil and natural gas make up nearly 60% of the world's total primary fuel mix. Demand for these resources is expected to grow well into the coming decades.
An Ongoing Quest
Given its continuous need for oil and gas, the world relies on engineers and geoscientists using the latest technologies to find deposits of hydrocarbon resources and extract them from deep underground. Petroleum professionals look for oil and gas in settings ranging from deserts to jungles and from mountain ranges to oceans. When deposits are found and are believed to be commercially viable, it is necessary to develop and apply cost-effective techniques to extract the oil and gas with minimal disruption to the environment. Again, petroleum professionals are called upon to make this happen.
E&P in a Nutshell
Even in the simplest, best-case scenarios, finding a commercially viable or economic oil or gas deposit demands a considerable amount of conjecture, time and money. It begins when petroleum engineers, along with geologists and geophysicists, try to find accumulations of oil and gas in underground rock formations. This early phase of the exploration process typically combines geological data with seismic technologies to render an image of the underground terrain. When signs of promising accumulations are identified, an exploratory well may be drilled to determine whether an oil or gas field actually exists in a given location.
If an exploratory well yields a discovery and is thus successful, one or more appraisal wells are drilled to determine the size of the field. This appraisal phase also helps engineers to determine whether a field is economic and how best to develop it. If the appraisal well encounters an accumulation of oil or gas that contains enough hydrocarbons to cover the costs of building the necessary infrastructure and production equipment, development begins.
During the process of field development, petroleum engineers work with other professionals to plan how the hydrocarbons will be recovered. Then, the actual development work begins as rigs drill wells; equipment is constructed and placed on location; and the necessary support mechanisms, like pipelines, platforms and roads are put in place. Following the development of the field infrastructure, the production phase begins. During the production phase, engineers and geoscientists work to optimize recovery from a well. The extracted oil or gas is sold and generates revenue for the investors in a project. The number of companies investing capital in a project varies -- larger projects typically have multiple investors so that the cost is not prohibitive for any one company.
Of course, life in the E&P sector rarely runs that smoothly. In reality, the petroleum engineer encounters many unknowns -- and potentially many obstacles -- in the quest to produce an economic well. Exploratory wells are frequently unsuccessful. Often during the appraisal phase, discoveries are found to be uneconomic. Working with geologists in the production phase, petroleum engineers try to figure out why a well might not be producing as much oil or gas as expected -- this could be related to the formation or the equipment in the well. In cases where a discovery is found to be economic, it may take years to actually start extracting oil or gas from an underground reservoir - and thus begin making money from the investment. The investment itself, even if it merely confirms that a discovery is uneconomic, is often in the millions of dollars. The decisions petroleum engineers make help to determine whether a project will be profitable. They can have profound consequences -- good or bad -- for an energy company.
