Upstream oil and gas production and operations identify deposits, drill wells, and recover raw materials from underground. It includes the search, exploration, drilling, and extraction phases. They are also often called exploration and production (E&P) companies. Exploration and production are the early stages of energy production, which includes searching and extracting oil and gas.
Upstream is all about WELLS. Where to locate them, how deep and how far to drill them and how to design, construct, operate and manage wells to deliver the greatest possible return on investment.
This sector includes related services such as:
· Rig operations
· Feasibility studies
· Machinery rental
· Extraction of chemical supply
The resource owners and operators of E&Ps work with a variety of contractors, such as engineering procurement and construction (EPC) contractors, as well as with join-venture partners and oil field service companies.
Uses traditional vertical or slightly deviated well to extract and produce oil & gas
1. Horizontal Drilling
Horizontal wells reduce the size of the drill pad footprint and enable production along the length of a reservoir
2. Hydraulic Fracturing or Fracking
3. Subsea Engineering
Four stages of E&P
1. Search & Exploration
· Involves the search for hydrocarbons, the primary components of petroleum and natural gas.
· Land surveys are performed to help identify the areas that are the most promising before drilling.
· Geologists study rock formations and layers of sediment within the soil to identify if oil or natural gas is present. The process can involve seismology
· Once it has been determined that there appear to be reserves beneath the ground, the test drilling process can begin
2. Well Construction
· After identifying potentially viable fields, a well is drilled to test the findings and determine whether there are enough reserves to be commercially viable for sale.
· Making a hole by drilling or grinding through the rock beneath the surface. A steel pipe is inserted into the hole so that the drill can be inserted in the pipe
· Core samples are taken and studied by geologists, engineers, and paleontologists to determine if there is the proper quality of natural gas or petroleum in the underground reserve to produce and sell commercially
· Production of oil wells begins.
· Engineers estimate how many wells will be needed and the best method of extraction. The estimated cost of the number of wells is determined.
· The construction of the platform begins, which could be on land or offshore.
· The necessary environmental protections are also implemented at this stage.
· Companies can drill horizontally tapping into vertical wells to search for natural gas pockets, which can produce far more natural gas than a typical vertical well.
· Oil and gas deposits are extracted from the wells. Sometimes, natural gas can be processed at the same site as the well.