Faculty of Law
University of Abuja
Petroleum, in one form or another, has been used since ancient times, and is now important across society, in economy, politics and technology. The rise in importance was mostly due to the invention of the internal combustion engine and the rise in commercial aviation.
The term “petroleum” was first used in the treatise De Natura Fossilium, published in 1546 by a German mineralogist Georg Bauer, also known as Georgius Agricola. Georgia Agricola (24 March 1494 – 21 November 1555) was a German scholar and scientist known as “the father of mineralogy”, he was born at Glauchau in Saxony. His real name was George Pawer. Agricola is the Latinized version of his name, Pawer/ (Bauer) meaning farmer. Gifted with a precocious intellect, he is best known for his book De Re Metallica. It is a complete and systematic treatise on mining and extractive metallurgy, illustrated with many fine and interesting woodcuts which illustrate every conceivable process to extract ones from the ground and metal from the ore.
Earlier in time, in his book Dream Pool Essay written in 1088, the polymathic scientist and statesman Shen Kuo of the Song Dynasty coined the word (Shiyou, literally “rock oil”) for petroleum, which remained the term used in contemporary Chinese. Petroleum was also known as burning water in Japan in the 7th century.
More than 4000 years ago, according to Herodotus and Diodorus Siculus, asphalt was used in the construction of the walls and towers of Babylon; there was oil pits near Ardericca (near Babylon), and a pitch spring on Zacynthus. Great quantities of it were found on the banks of River Issus, one of the tributaries of the Euphrates. Ancient Persian tables indicate the medicinal and lighting uses of petroleum in the upper levels of the society.
In the 1850s, the process to distil kerosene from petroleum was invented by Abraham Gesner, providing a cheaper alternative to whale oil. The demand for the petroleum as a fuel for lighting in the North America and around the world quickly grew. The world’s first commercial oil well was drilled in Poland in 1853. Oil exploration developed in many parts of the world with the Russian Empire, particularly Branobel company in Azerbaijan, taking the lead in production by the end of the 19th century. Oil exploration in North America during the early 20th century later led o the U.S. becoming the leading producer by the mid 1900s. As petroleum production in the U.S. peaked during the 1960s, however, Saudi Arabia and Russia surpassed the U.S.
The first streets of Baghdad were paved with tar, derived from petroleum that became accessible from natural fields in the region. In the 19th century, oil fields were exploited in the area around modern Baku, Azerbaijan, to produce naphtha. These fields were described by the Arab geographer Abu al-Hasan Ali al-Masudi in the 10th century, and by Marco Polo in the 13th century, who described the output of those wells as hundred of shiploads. Petroleum was distilled by the Persian alchemist Muhammad ibn Zakariya Razi (Rhazes) in the 19th century, producing chemicals such as kerosene in the alembic (al-ambiq), and which was mainly used for kerosene lamps. Arab and Persian chemicals also distilled crude oil in order to produce flammable products for military purposes. Through Islamic Spain, distillation became available in Western Europe by the 12th century, it has also been present in Romania since the 12th century, being recorded as pacura.
The earliest mention of petroleum in the Americas occurs in Sir Walter Raleigh’s account of the Trinidad Pitch Lake in 1595; whilst thirty-seven years later, the account of a visist of a Franciscan, Joseph de la Roche d’Allion, to the oil springs of New York was published in Sagard’s Historie du Canada. A Russian traveler, Peter Kalm, in his work on America published in 1748 showed on a map the oil springs of Pennsylvania.
In 1710 or 1711 (sources vary) the Russian-born Swiss physician and Greek teacher Eyrini d’Eyrinis (also spelled as Eirini d’Eirinis) discovered asphaltum at Val-de-Travers, (Neuchatel). He established a bitumen mine de la Presta there in 1719 that operated until 1986.
In 1745 under queen Elizabeth of Russia the first oil well and refinery were built in Ukhta by Fiodor Priadunov. Through the process of distillation of the “rock oil” (petroleum) he received a kerosene – like substance, which was used in oil lamps by Russian churches and monasteries (though households still relied on candles).
Oil sands were minded from 1745 in Merkwiller-Pechelbronn, Alsace under the direction of Louis Pierre Ancillon de la Sablonniere, by special appointment of Louis XV. The Pechelbronn oil field was active until 1970, and was the birth place of companies like Antar and Schlumberger. The first modern refinery was built there in 1857.
Today, about 90% of vehicular fuel needs are met by oil. Petroleum also makes up 40% of total energy consumption in the United States, but is responsible for only 2% of electricity generation. Petroleum’s worth as a portable, dense energy source powering the vast majority of vehicles and as the base of many industrial chemicals makes it one of the world’s most importance commodities.
The top three oil producing countries as Saudi Arabia, Russia, and the United States. About 80% of the world’s readily accessible reserves are located in the Middle Arabia, UAE, Iraq, Qatar and Kuwait. A large portion of the world’s total oil exists as unconventional sources, such as bitumen, in Canada and Venezuela, and oil shale. While significant volumes of oil are extracted from oil sands, particularly in Canada, logistical and technical hurdles remain, and Canada’s oil sands oil were not expected to provide more than a few million barrels per day in the foreseeable future. However, recent discoveries have yielded more than was previously envisaged. About 1.7 trillion barrels of oil has been found in the region covering and interfacing Canada and the US.
(a) Abiogenic Views of Hydrocarbons
There are two main theories that deal with the abiogenic formation of hydrocarbons. The first is called the Soviet or, more recently, the Russian – Ukrainian Theory of deep abiotic petroleum origins. The second theory is called the Deep Gas Theory. It was developed by Thomas Gold from 1979 TO 1998.
According to the Soviet-Ukrainian Theory, petroleum is considered to be a primordial material which was erupted at the surface of the Earth add is therefore not a fossil fuel. The proponents assert that, this theory is based upon rigorous scientific analysis as well as upon extensive geological observation and is consistent with the laws f physics and chemistry. Its principal tenet is that the generation of hydrocarbons must conform to the general laws of chemical thermodynamics.
The Soviet Union was thought to have very limited petroleum reserves in the aftermath of the Second World War and was essentially denied access to the major oil fields of the world. To overcome this problem, a Manhattan-type project was initiated in 1947 in order to determine the origins of petroleum and how petroleum reserves are generated in order to establish the most effective strategies for petroleum exploration. This led to the development of a new, innovative theory of petroleum science within five years which was said to have had major successes in the exploration of oil reservoirs in the former Soviet Union. The principal aspects of this theory were presented at the All-Union Petroleum Geology Congress in Moscow in 1951 by N.A. Kudryavtsev. As a result this theory was at its most influential during the cold war and the vast majority of the results were published in Russian. This theory is therefore poorly known in the West. If this theory is true, then oil could not finish since it is based on primordial character and formations, thus the peak theory would not be tenable.
The opponents to this theory ask to what extent this is true as the explanation is contrary to facts. The great oil fields of the Volga-Urals region, the northern Urals and Western Siberia were discovered during the early 1940s to middle. Certainly, the arguments presented by Kenney et al do represent a rigorous interpretation of the thermodynamic data. However, the formation of higher hydrocarbon from methane in the upper mantle is said to be only one link in the chain of petroleum formation. Perhaps the clearest argument against the abiogenic theory is the oxidation state of the mantle. Whilst it is true that the mantle is the major reservoir for carbon on the Earth, it is equally ture that the upper mantle is moderately oxidizing. According to Wood et al. (1990), the mantle beneath active subduction zones is much more oxidizing than that beneath mid-ocean ridges.
The abiogenic theory also lays particular emphasis on the discovery of major oil and gas fields in crystalline basement rocks such as in the Caspian district, the western Siberian cratonic rift sedimentary basin and the northern flank of the Dnieper-Donets Basin which is considered to be incompatible with the biogenic theory. However, this view does not take into account modern theories of fluid migration in the Earth’s crust or of the permeability of crystalline rocks. According to Dr. Shehu Zuru, it is correct to say that naturally occurring oil migrates with a qualified sovereignty depending on the state of the oil.
The Deep Gas Theory of Thomas Gold evolved over time. By way f background, Professor Gold was born in Vienna in 1920 and educated at University and Director of the Cornell Center for Radiophysics and Space Research. His deep gas theory is controversial for a number of reasons, the principal one being the strong suggestion that Professor Gold, a fluent reader of Russian, took the ideas of Soviet scientists and used them as the basis for his own theory without any attribution or acknowledgement, although he did cite Russian literature in some of his works. In particular, it is claimed that Professor Gold deliberately modified the Russian-Ukrainian theory in order to conceal its provenance and thereby introduced significant errors into the theory.
Professor Gold was a distinguished scientist in his own right as shown by his election as a Fellow of the Royal Society of London. Furthermore, as an astrophysicist, Professor Gold was well aware that carbon is the fourth most abundant element in the universe and is present predominantly in the form of hydrocarbons. In the solar system, for example, Gold recognized that the greatest quantity of hydrocarbons is present in the massive outer planets and their satellites with huge amounts of methane present in the extensive atmospheres of Jupiter, Saturn, Uranus and Neptune.
Although, it seems more than probable that Professor Gold was influenced by the work of Russian and Ukrainian scientists, especially in his early works, the approach, examples and theoretical basis adopted in his publications differ in many respects from those presented by the Russian-Ukrainian school at that time. Whilst Gold was undoubtedly cavalier in citing the Russian literature, it should be remembered that only one major work had been published in English on the Russian-Ukrainian theory by a Soviet scientist prior to the 27th International Geological Congress in Moscow in 1984 and that this did not really coincide with Gold’s interests. In addition, the idea that a scientist of Gold’s caliber would deliberately modify a theory by introducing significant errors and thereby present a flawed theory in order to conceal its provenance seems implausible.
In his early efforts, Gold was mainly concerned with the role of major earthquakes in facilitating the migration of gases, and in particular methane, from the deep Earth. If an earthquake was large enough to fracture the ground up to the Earth’s surface, it was assumed that it would open up an escape route for gas and that this could generate some of the peculiar phenomena accompanying major earthquakes such as flames shooting from the ground, “earthquake lights” and sulphurous air. In particular, Gold prepared a map of the world showing the correlation between major oil and gas regions and areas of present and past seismicity from which it was apparent that many of the known hydrocarbon reservoirs, including those in Alaska, Texas, the Caribbean, Mexico, Venezuela, the Persian Gulf, the Urals, Siberia, and Southeast Asia, lie on deformation belts. This association of oil and gas fields with earthquake-prone regions suggested that deep faults may play a role in the continuous migration of methane and other gases to the Earth’s surface and therefore in the generation of these oil and gas fields. The association of helium with hydrocarbons in oil and gas fields was also taken as strong evidence for a deep source of hydrocarbons.
In Britain, there were several prominent proponents of the abiogenic theory of hydrocarbon formation in the 1950’s and 60’s. In particular, Sir Fred Hoyle, one of the leading British astronomers of his day, championed the idea of chondritic material as the source of carbon in petroleum. According to Hoyle (1955), the presence of hydrocarbons in the bodies which formed the Earth would have resulted in the interior of the Earth containing vastly more oil than ever could have been produced by: decaying fish: which he described as a “strange theory that has been in vogue for many years. Based on the assumption that the oil deposits were squeezed out of the interior of the Earth, he concluded that the amount of oil still present at great depths in the Earth vastly exceeds the comparatively tiny quantities that man has been able to recover so far and considered the possibility of ever gaining access to these vast supplies an entertaining speculation.
Sir Robert Robinson, one of Britain’s leading synthetic organic chemists at this time, also noted that the composition of petroleum does not match that expected of modified biogenic products and that the constituents of ancient crude oils fit equally well with a primordial hydrocarbon mixture to which bio=products have been added. He therefore proposed a duplex origin of petroleum in which biogenic processes were dormant in the formation of younger oil but were virtually absent in the formation of older crude oil. However, this argument takes no account of the bacterial degradation of oil over time (Head et al., 2003). Furthermore, it overlooks the fact that petroleum is not formed directly from plant material but from type II kerogens which are derived from the low temperature diagenetic alteration of planktonic organisms.
Following the lead of Russian proponents of the abiogenic theory, Sylvester described two types of heavy hydrocarbons which they cosndiered to be abiogenic. The first was uraniferous pitchblende which is found in pegmatites, granites, gneisses and was thought to be formed by the polymerization of hydrocarbon gases by particles containing from uranium. The second type was so-called igneous hydrocarbons from a nepheline syenite complex in the Kola Peninsula where heavier bitumens and all grades of oil including natural gas are found. In this case, it was believed that hydrocarbons had formed by hydrogenation of dispersed carbon or carbon dioxide during crystallization of the magma.
The abiogenic theory is, of course, bolstered by the occurrence of hydrocarbons which clearly have an abiogenic origin. For example, over 70 carbon bearing radicals and ions and organic compounds have been identified in dense interstellar gas and dust clouds which have temperatures in the range 10-1000K. The success of the abiogenic theory can be seen by the fact that more than 80 oil and gas fields in the Caspian district have been explored and developed in crystalline basement rock on the basis of this theory (Kenney, 1996). Exploration in the western Siberian cratonic rift sedimentary basin has led to the development of 90 petroleum fields of which 80 produced either or entirely from the crystalline basement.
From the above therefore, it is obvious that the major claim of the Russian-Ukrainian theory of abiogenic hydrocarbon formation is that it had major successes in the discovery of oil and gas deposits in crystalline basement rocks. However, it now appears that the great oil fields of the Volga-Urals region, the northern Urals and western Siberia were discovered not as a result of application of this theory as its proponents claim but by the use of conventional exploration methods which gave “the final word to the borehole”. Furthermore, recent studies of the petroleum resources of the Dnieper-Donets Basin in the Ukraine by the U.S. Geological Survey have been interpreted entirely within the framework of conventional petroleum geology with no mention made of an abiogenic source of hydrocarbons.
The Deep Gas Theory of Thomas Gold is based on the assumption that deep faults play the dominant role in the continuous migration of methane and other gases to the Earth’s surface and that this methane is then converted into oil and gas in the upper layers of the Earth’s crust. However, this reaction is not thermodynamically favourable under these conditions and cannot be facilitated by the presence of bacteria. This theory therefore is also considered invalid.
Definitional Concept and Proposition
· Definition of Petroleum
According to Statute, petroleum means” mineral oil (or any related hydrocarbon) or natural gas as it exists in its natural state in strata, and does not include coal or bituminous shales or other stratified deposits from which oil can be extracted by destructive distillation.
The word Petroleum has its root from the Greek word, which literally means “rock oil” or crude oil. It was derived from two Latin words Petra which means rock and Oleum which means oil. Petroleum is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights, and other organic compounds, that are found in geologic formations beneath the earth’s surface.
In the late 1800s, the term mineral oil or rock oil was first used to describe the petroleum hydrocarbons and associated products that were produced from wells that tapped underground reservoirs. The term differentiated petroleum hydrocarbons produced from underground sources from other common oil sources at the time, such as vegetable oils or whale oil. In today’s petroleum exploration and production business, the phrase “mineral oil” is most often used in legal documents to define and encompass all of the liquid hydrocarbon and gaseous products produced from underground petroleum-bearing reservoirs.
Definition of Terms
These are the quantities of crude oil estimated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. To qualify as a reserve, they must be discovered, commercially recoverable, and still remaining. Reserves as further categorized by the level of certainty associated with the estimates. This is contrasted with contingent resources, which are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development because of one or more contingencies.
The total estimated amount of oil in an oil reservoir, including both producible and non-producible oil, is called oil in place. However, because of reservoir characteristics and limitations in petroleum extraction technologies, only a fraction of this oil can be brought to the surface, and it is only this producible fraction that is considered to be reserves.
These are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality.
They are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and chance of development.
The United States Geological Survey uses the terms technically and economically recoverable resources when making its petroleum resource assessments. Technically recoverable resources represents that proportion of assessed in-place petroleum that may be recoverable using current recovery technology, without regard to cost. Economically recoverable resources are technically recoverable petroleum for which the costs of discovery, development, production, and transport, including a return to capital, can be recovered at a given market price.
These exist in petroleum accumulations that are pervasive throughout a large area. Examples include extra heavy oil, natural bitumen, and oil shale deposits. Unlike Conventional resources, in which the petroleum is recovered through wellbores and typically requires minimal processing prior to sale, unconventional resources require specialized extraction technology to produce. For example, steam and/or solvents are used to mobilize bitumen for in-situ recovery. Moreover, the extracted petroleum may require significant processing prior to sale (e.g. bitumen up-graders). The total amount of unconventional oil resources in the world considerably exceeds the amount of conventional oil reserves, but are much more difficult and expensive to develop.
These are the different methods of calculating oil reserves. These methods can be grouped into three general categories: volumetric, material balance, and production performance.
Volumetric methods attempts to determine the amount of oil-in-place by using the size of the reservoir as well as the physical properties of its rocks and fluids. Then a recovery factor is assumed, using assumptions from fields with similar characteristics. Oil-in-place is multiplied by the recovery factor to arrive at a reserve number. Current recovery factors for oil fields around the world typically range between 10 and 60 percent; some are over 80 percent. The wide variance is due largely to the diversity of fluid and reservoir characteristics for different deposits. The method is most useful early in the life of the reservoir, before significant production has occurred.
Materials Balance Method
The materials balance method for an oil field uses an equation that relates the volume of oil, water and gas that has been produced from a reservoir, and the change in reservoir pressure, to calculate the remaining oil. It assumes that as fluids from the reservoir are produced, there will be a change in the reservoir pressure that depends on the remaining volume of oil and gas. The method requires extensive pressure-volume-temperature analysis and an accurate pressure history of the field. It requires some production to occur (typically 5% to 10% of ultimate recovery), unless reliable pressure history can be used from a field with similar rock and fluid characteristics.
Production Decline Curve Method
The decline curve method uses production data to fit a decline curve and estimate future oil production. The three most common forms of decline curves are exponential, hyperbolic, and harmonic. It is assumed that the production will decline on a reasonably smooth curve, and so allowances must be made for wells shut in and production restrictions. The curve can be expressed mathematically or plotted on a graph to estimate future production. It has the advantage of (implicitly) including all reservoir characteristics. It requires a sufficient history to establish a statistically significant trend, ideally when production is not curtailed by regulatory or other artificial conditions.
The term reserve growth refers to the typical increases in estimated ultimate recovery that occur as oil fields are developed and produced. Experience shows that initial estimates of the size of newly discovered oil fields are usually too low. As years pass, successive estimates of the ultimate recovery of fields tend to increase.
These are based on geological and/or engineering data similar to that used in estimates of proved reserves, but technical, contractual, or regulatory uncertainties preclude such reserves being classified as proved. Unproved reserves may be used internally by oil companies and government agencies for future planning purposes, but are not routinely compiled. They are sub classified as probable and possible.
These are attributed to known accumulations, and claim a 5% confidence level of recovery. Industry specialists refer to them as P50 (i.e. having a 50% certainty of being produced). These reserves are also referred to in the industry as 2P (proved plus probable).
These refer to known accumulation which have a less likely chance of being recovered that probable reserves. This term is often used for reserves which are claimed to have at least a 10% certainty of being produced (P10). Reasons for classifying reserves as possible include varying interpretations of geology, reserves not producible at commercial rates, uncertainty due to reserve infill (seepage from adjacent areas) and projected reserves based on future recovery methods. They are referred to in the industry as 3P (proved plus probable plus possible).
Strategic Petroleum Reserves
Many countries maintain government-controlled oil reserves for both economic and national security reasons. According to the United States Energy
Critical Observation and Conclusion
From the foregoing, it is obvious that definitional concepts and propositions are very critical to the understanding of technical terms in Oil and Gas. Historically speaking, these terminologies as originally construed have not changed remarkably because petroleum operations have to a greater extent remained the same, perhaps the only noticeable changes are in the language of operations and applications. In recent years based on new thinking around operational conveniences, there have emerged newer structural definitions such as; Downstream, Midstream sectors of the Oil Industry and offshore and onshore Oil Industry. Although these instances could not have possibly provided a robust justification for a general conclusion on this, the point to the dynamism of the Industry and how it was able to invent and reinvent itself in-order to be able to respond adequately to contemporary imperatives for periodical review of technical terminologies and the general language structure of the Oil Industry. Having said that, it is very important to state that despites all these, content definition such as the chemical composition of Oil, physical features Oil field, oil wells, wellhead, gathering Centre, gravity drainage and operational activities like seismic survey in the forms of the short hole method and vibroseis have also remained the same. Perhaps this explains why despite it dynamism, its technical nomenclature has continued to sustain the perception that Oil and Gas Industries are complex and technical in nature. It is viewpoint of this research that, that could be true at the moment but as the Industry surges forward and continue to deliver newer technologies that make operations more and more cost effective and create operational conveniences, it would it would inadvertently impact on the language structure and descriptive terminologies.