The Oil Drilling Process
The crew sets up the rig and starts the drilling operations. First, from the starter hole, the team drills a surface hole down to a pre-set depth, which is somewhere above where they think the oil trap is located. There are five basic steps to drilling the surface hole:
Place the drill bit, collar and drill pipe in the hole.
Attach the kelly and turntable, and begin drilling.
As drilling progresses, circulate mud through the pipe and out of the bit to float the rock cuttings out of the hole.
Add new sections (joints) of drill pipes as the hole gets deeper.
Remove (trip out) the drill pipe, collar and bit when the pre-set depth (anywhere from a few hundred to a couple-thousand feet) is reached.
Once they reach the pre-set depth, they must run and cement the casing -- place casing-pipe sections into the hole to prevent it from collapsing in on itself. The casing pipe has spacers around the outside to keep it centered in the hole.
The casing crew puts the casing pipe in the hole. The cement crew pumps cement down the casing pipe using a bottom plug, a cement slurry, a top plug and drill mud. The pressure from the drill mud causes the cement slurry to move through the casing and fill the space between the outside of the casing and the hole. Finally, the cement is allowed to harden and then tested for such properties as hardness, alignment and a proper seal.
Testing for Oil
Drilling continues in stages: The crew drills, then runs and cements new casings, then drills again. When the rock cuttings from the mud reveal the oil sand from the reservoir rock, the crew may have reached the well's final depth. At this point, crew members remove the drilling apparatus from the hole and perform several tests to confirm this finding:
Well logging - lowering electrical and gas sensors into the hole to take measurements of the rock formations there
Drill-stem testing - lowering a device into the hole to measure the pressures, which will reveal whether reservoir rock has been reached
Core samples - taking samples of rock to look for characteristics of reservoir rock
Once they've reached the final depth, the crew completes the well to allow oil to flow into the casing in a controlled manner. First, they lower a perforating gun into the well to the production depth. The gun has explosive charges to create holes in the casing through which oil can flow. After the casing has been perforated, they run a small-diameter pipe (tubing) into the hole as a conduit for oil and gas to flow up through the well. A device called a packer is run down the outside of the tubing. When the packer is set at the production level, it's expanded to form a seal around the outside of the tubing. Finally, they connect a multi-valved structure called a Christmas tree to the top of the tubing and cement it to the top of the casing. The Christmas tree allows them to control the flow of oil from the well. After the well is completed, the crew must start the flow of oil into the well. For limestone reservoir rock, acid is pumped down the well and out the perforations. The acid dissolves channels in the limestone that lead oil into the well. For sandstone reservoir rock, a specially blended fluid containing proppants (sand, walnut shells, aluminum pellets) is pumped down the well and out the perforations. The pressure from this fluid makes small fractures in the sandstone that allow oil to flow into the well, while the proppants hold these fractures open. Once the oil is flowing, the oil rig is removed from the site and production equipment is set up to extract the oil from the well.
Credit & Reference: How Stuff Works