Introduction to Oil & Gas

1. Introduction to Oil & Gas UWPEA Spring 2013

2. Why Oil and Gas?

3. Where do you fit in?

4. Industry Overview Wellhead Refining Retail Wholesale Transportation Upstream Midstream Downstream

5. A Crude Oil Assay • Crude oil must be refined to produce finished products • Several hundred unique grades of crude are produced today, with varying characteristics • Density • Viscosity • Waste content (ie: sulfur, nitrogen, water, etc.) • When refined, the characteristics of an individual grade of crude will determine the relative yields of finished products

6. A Crude Oil Assay:Bryan Mound Sweet Crude

7. Breakdown of Crude Oil

8. Density • Density is important as it gives an indication of the hydrocarbon molecules contained in the oil • Dense crudes (ie: Arab Heavy) tend to contain larger hydrocarbon molecules and therefore be less valuable than lighter crudes (ie: WTI) • Density will vary with temperature and pressure • Crude oil density is usually measured in ˚API or Specific Gravity using a Hydrometer

9. Density Measurements • Specific Gravity = Oil Density/Water Density • ˚API = 141.5/Specific Gravity – 131.5

10. Sulfur Content • Sulfur reduces the energy content of crude oil (by displacing hydrocarbons), and causes corrosion damage to transportation and refinery equipment • Low-sulfur crude is called “sweet”, while high-sulfur crude is “sour” • Sulfur binds more easily to larger hydrocarbons, causing many crudes to be referred to as “light-sweet” or “heavy-sour”

11. Sulfur Content (cont.) • Refineries are often required to remove sulfur from finished product in a “Hydrotreater” unit • One type of sulfur compound found in crude oil are mercaptans, which are further neutralized in a “Sweetener” unit due to their distinct rotten-egg smell • Mercaptans are added to odorless natural gas as a safety measure

12. Crude Oil Density and Sulfur

13. US Refinery Crude Oil Input Quality

14. Viscosity • Defines how easily a crude oil resists flowing • Highly viscous crude tends to contain larger hydrocarbons • Viscosity changes with temperature, and is usually measured at 40˚C and 100˚C • Viscosity in a reservoir is measured in poise (P) • Outside the reservoir, kinematic viscosity is measured in centistokes (cS or cSt) where 1 stoke = 1cm2/second • Pour point is 5˚F above the temperature at which the oil shows no surface movement after being inclined for 5 seconds

15. Vapor Pressure • How readily the crude will evaporate • Absolute vapor pressure exerted at 37.8˚C • Measured as Reid Vapor Pressure (RVP) in pounds per square inch (psi) • High RVP crudes will produce larger quantities of light, valuable products • RVP of gasoline is limited by environmental regulations

16. Other Characteristics • Characterization (K) factors • Acids • Nitrogen content • Carbon content • Asphaltenes • Salt • Metals and other elements • Basic sediment and water (BS&W)

17. Types of Oil Liquids • Conventional • Condensates • NGLs • Unconventional • Oil Sands • Tight Oil • Deepwater

18. North America Oil Liquid Types

19. References • Downey, M. (2009). Oil 101. (1 ed.). Wooden Table Press LLC. • Exxon Mobil. (2013). The outlook for energy: A view to 2040. Retrieved from http://www.exxonmobil.com/Corporate/energy_outlook.aspx • EIA. (2012). Crude oils have different quality characteristics. Retrieved from http://www.eia.gov/todayinenergy/detail.cfm?id=7110 • EIA. (2013). U.S. Refinery Crude Oil Input Qualities Retrieved from http://www.eia.gov/dnav/pet/pet_pnp_crq_dcu_nus_m.htm