Oil extraction industry research report

Introduction to the oil extraction industry


1. What is oil?


Petroleum, also known as crude oil, is a brown-black flammable viscous liquid extracted from deep underground. It is mainly a mixture of various alkanes, naphthenes, and aromatic hydrocarbons. It is a mixture formed by organisms in ancient oceans or lakes after a long evolution. Like coal, it belongs to fossil fuels. Petroleum is mainly used as fuel oil and gasoline. Fuel oil and gasoline form one of the most important primary sources in the world at present. Petroleum is also a raw material for many chemical industry products such as solutions, fertilizers, pesticides, and plastics.


2. The generation of oil


The generation of oil takes at least 2 million years, and the oldest oil deposits discovered today can be as old as 500 million years. During the long history of the earth's continuous evolution, there are some "special" periods, such as the Paleozoic and Mesozoic Era, when a large number of plants and animals died, and the organic material that made up their bodies continued to decompose, mixing with substances such as sediment or carbonated sediments to form sedimentary layers. As sediments continue to accumulate and thicken, the temperature and pressure rise, and as this process continues, the sedimentary layers become sedimentary rocks, which in turn form sedimentary basins, which provide the basic geological environment for the generation of oil.


With various geological processes, sediments in sedimentary basins continue to accumulate. When the temperature and pressure reach a certain level, the organic matter of animals and plants in the sediments is converted into carbon and oxygen molecules, and eventually oil and natural gas are formed.


3. Accumulation of oil


Instead of accumulating in the source rocks, or sedimentary rocks, that are originally formed in a sedimentary basin, as water accumulates in a reservoir, oil is squeezed through the pores of the rock into cracks and pores in the rock with a lower pressure distribution until it remains in a completely enclosed reservoir rock. Reservoir rocks are rocks where oil accumulates. Reservoir rocks form the geological environment in which oil is stored, the trap structures, which are geological structures that prevent oil from being further transported. This accumulation of oil is like water being absorbed by a piece of cotton. It is because of the reservoir rock and trap structure that oil can settle quietly underground, waiting for the arrival of excavators.


4. Classification of oil


Petroleum is an important fossil energy source, which can be divided into the following categories according to its physical properties and chemical composition:


1) crude oil


Crude oil refers to unprocessed petroleum extracted from underground oil reservoirs and is also a raw material for refining various petroleum products. The physical properties and chemical compositions of crude oil vary from region to region and oil field, and generally include three types of light crude oil, medium crude oil and heavy crude oil.


2) Natural gas condensate


Natural gas condensate is a liquid hydrocarbon substance separated from natural gas. Its physical properties and chemical composition are similar to those of crude oil, but its content of alkane components is higher and the content of sulfur, nitrogen, oxygen and other impurities is lower.


3) Oil shale


Oil shale is a kind of sedimentary rock with high oil content, and its main components are organic matter and clay minerals. The pyrolysis products of oil shale contain a lot of light hydrocarbons, which can be used as a substitute for oil.


4) Oil sands


Oil sand is a kind of sedimentary rock with high oil content, its main components are quartz sand grains and oily organic matter. The pyrolysis products of oil sand contain a lot of heavy hydrocarbons, but its mining and processing costs are high.


5) Heavy oil residue


Heavy oil residues refer to the high-boiling residues remaining in the petroleum processing process. Their physical properties and chemical compositions are more unstable than those of crude oil, and they contain a large amount of impurities and heavy metal elements. They require deep processing to obtain high-quality petroleum products.


There are various methods for classifying petroleum, and different types of petroleum are also different in terms of processing and utilization, requiring selection and application according to actual conditions.


Methods of oil extraction


1. Natural storming method


Natural jetting is the original method of extraction, and it is also the simplest and most primitive method. In this way, you just need to find out the condition of the oil reservoir and wait for the oil to come out of the ground naturally. When the oil comes out of the ground, people use straws to collect it into barrels. Over time, this method is no longer used.


2. Manual extraction method


The manual extraction method uses a variety of drilling equipment and tools to cross an oil reservoir and extract oil to the surface. This method requires drilling, usually as follows:


1) Drilling: Drilling exploratory boreholes using drill pipes and bits.


2) Introduction of casing: insert the casing into the wellbore to protect the wellbore.


3) Set up a driller on the oil layer: by driving the drill pipe to inject liquid into the wellbore, the oil will be pumped out through the wellbore.


4) Extracting oil with a high-pressure steam pump: A high-pressure steam pump is used to help the oil descend to the ground along the drilling pipeline, and then the oil is collected into the container.


3. Partial pressure method


Partial pressure is the method of using well pressure to push oil out of the ground. Generally, gas or liquid is injected into the well, causing the pressure to increase and the oil is squeezed out of the oil formation and flowing to the casing. This is a more common method and is often used in shallower oil fields.


4. Polymer injection method


Polymer injection is a method of artificially increasing the fluidity of oil by injecting polymers or other chemicals into the wellhead to make it easier to stimulate oil outflow. This method is suitable for large oil fields with high oil quality requirements.


5. Water flooding


Water flooding uses the physical properties of water to push oil out of the ground. This method is suitable for large oil flows and poor quality.


Second, the process of oil extraction


The process of oil extraction involves exploration, exploration, extraction, and separation, as depicted in the following figure:


1. Exploration/Exploration: Exploration determines oil quality, reserves, distribution, and other information.


2. Extraction: After exploration and determination of oil reserves, use technical means such as measurement and monitoring to construct production wells in the reservoir, and then use technical means such as polymer injection, water flooding, and steam injection to improve oil mobility and facilitate extraction.


3. Extraction: Oil is extracted to the surface by means of natural pumping, manual extraction, and partial pressure methods.


4. Separation: The oil, gas, and water collected are separated and treated for transportation and use in various industrial and civilian applications.


IV. Upstream and downstream analysis of oil extraction


V. China's oil production and consumption market


World oil distribution map in 2023


Worldwide, oil is mainly concentrated in the Middle East. Here is the global oil distribution map:


2. China's oil distribution map in 2023


China's oil is mainly distributed in the northern regions of China, including Northeast China, North China, and Xinjiang. The following is a detailed distribution map of China's oil:


2. China's oil production and foreign dependence


China's oil production is increasing year by year, but it cannot keep up with the growth of China's demand, so China's crude oil dependence on foreign countries is increasing.


China's major oil exploration enterprises


In 2023, China's oil extraction market is basically occupied by "three barrels of oil", and other oil companies account for a very small proportion. China National Petroleum Corporation accounts for 60%, Sinopec Group accounts for 19%, and CNOOC accounts for 17%.


VII. Outlook for China's oil exploration industry


With the growing global energy demand and the continuous optimization of the energy structure, the oil industry will face a series of development trends in the future.


1. The future oil industry will face the challenges and opportunities of technological development


With the continuous advancement of science and technology, the application of new technologies in the process of oil exploration and production will gradually increase. For example, new technologies such as oil field digitization, big data analytics and artificial intelligence will greatly improve the efficiency of exploration and production and reduce resource waste. In addition, the continuous development of non-traditional energy technologies will also have a certain impact on the oil industry. The popularity of new energy sources such as solar and wind energy will gradually reduce the demand for oil.


2. Environmental protection will become an important consideration for the future development of the oil industry


Traditional oil exploration and production activities have caused serious pollution to the environment, so the oil industry will be forced to take more environmentally friendly measures. For example, the use of new green technologies and clean energy to replace traditional oil extraction methods will reduce the impact on the environment. In addition, oil companies will actively participate in global environmental protection actions, committed to reducing carbon emissions and combating climate change.


3. Market changes will have an impact on the future development of the oil industry


With the continuous development of new energy and the strengthening of awareness of environmental protection, the demand for oil will gradually decrease. Therefore, oil companies need to adjust their industrial structure and product structure, develop new business areas, and find new profit growth points. For example, petrochemical, natural gas and other related industries can be developed, and product added value and competitiveness can be improved through continuous innovation and technological progress.


4. Climate change will have a significant impact on the future development of the oil industry


With global warming, governments around the world will adopt more stringent emission reduction policies and energy transition measures. Oil companies need to actively address these challenges and reduce carbon emissions by improving energy efficiency, increasing the proportion of clean energy, and promoting low-carbon technologies. At the same time, oil companies can also actively participate in the carbon trading market and reduce economic pressure by implementing carbon emission rights trading.