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
Oil Reserves
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.
Contingent Resources
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.
Prospective Resources
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.
Unconventional Resources
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.
Estimation Techniques
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 Method
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.
Reserves Growth
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.
Unproved Reserves
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.
Probable Reserves
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).
Possible Reserves
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.