Petroleum resources and

production
Definitions related to Resources and production
hydrocarbons on the NCS

Energy through Global resources and

combustion production

Accumulations of
hydrocarbons

Classification of resources
 Hydrocarbons
• A naturally occurring organic compound comprising
hydrogen and carbon. Hydrocarbons can be as simple as
methane [CH4], but also highly complex molecules, and
can occur as gases, liquids or solids.

• The molecules can have the shape of chains, branching

chains, rings or other structures.

• Petroleum is a complex mixture of hydrocarbons.

 Some properties of simple
hydrocarbons
• Methane (1C) and ethane (2C) are gaseous at ambient temperatures and
cannot be readily liquefied by pressure alone.

• Propane (3C) is however easily liquefied, and exists in “propane bottles”

mostly as a liquid.

• Butane (4C) is so easily liquefied that it provides a safe, volatile fuel for small
pocket lighters.

• Pentane (5C) is a clear liquid at room temperature, commonly used in

chemistry and industry as a powerful nearly odorless solvent of waxes and
high molecular weight organic compounds, including greases.

• Hexane (6C) is also a widely used solvent, as well as a significant fraction of

common gasoline.

• The (6C) through (10C) are the top components of gasoline, naphtha, jet fuel
and specialized industrial solvent mixtures.
 Petroleum
• A complex mixture of naturally occurring hydrocarbon
compounds found in rock.

• Petroleum can range from solid to gas, but the term is

generally used to refer to liquid crude oil. Impurities such as
sulphur, oxygen and nitrogen are common in petroleum.

• There is considerable variation in colour, gravity, odour,

sulphur content and viscosity in petroleum from different
areas.
 Crude oil
• Crude oil: Liquid petroleum from the reservoir. Most
of the water and dissolved natural gas have been
removed.
 Heavy crude oil or extra heavy
crude oil – mainly onshore
• Heavy crude oil or extra heavy crude oil is any type of crude oil which
does not flow easily. It is referred to as "heavy" because its density or
specific gravity is higher than that of light crude oil.

• Production, transportation, and refining of heavy crude oil present

special challenges compared to light crude oil. The largest reserves of
heavy oil in the world are located in Venezuela, the same amount as the
conventional oil reserves of Saudi Arabia, but 30 or more countries are
known to have reserves.

• Heavy crude oil is closely related to oil sands, the main difference being
that oil sands generally do not flow at all. Canada has large reserves of
oil sands.

• Physical properties that distinguish heavy crudes from lighter ones

include higher viscosity and specific gravity, as well as heavier molecular
composition.
Extra heavy oil production
from oil sands • Oil sands, extra heavy oil, bituminous
sands, or tar sands, are a type of
unconventional petroleum deposit.

• Oil sands are a combination of clay,

sand, water, and bitumen, a heavy
black viscous oil.

• Oil sands can be mined and

processed to extract the oil-rich
bitumen, which is then refined into oil.

• The bitumen in oil sands cannot be

pumped from the ground in its natural
state; instead oil sand deposits are
mined, usually using strip mining or
open pit techniques, or the oil is
extracted by underground heating
with additional upgrading.
 Shale oil
• Oil shale, also known as kerogen shale, is an organic-rich fine grained
sedimentary rock containing kerogen (a solid mixture of organic chemical
compounds) from which liquid hydrocarbons called shale oil can be produced.

• Shale oil is a substitute for conventional crude oil; however, extracting shale oil
from oil shale is more costly than the production of conventional crude oil both
financially and in terms of its environmental.

• Heating oil shale to a sufficiently high temperature causes a chemical process

and yield a vapor. Upon cooling the vapor the liquid shale oil is separated out.

• Shale oil has become an increasingly important source of energy around the
world, including the US.
 Natural gas
• A naturally occurring mixture of hydrocarbon gases that is highly
compressible and expansible.

• Methane [CH4] is the main constituent of most natural gas (constituting

as much as 85% of some natural gases), with lesser amounts of ethane
[C2H6], propane [C3H8], butane [C4H10] and pentane [C5H12].

• Impurities can also be present in large proportions, including carbon

dioxide, helium, nitrogen and hydrogen sulphide.
 Unconventional gas
mainly onshore
• In the broadest sense, “unconventional” natural gas is gas that is more
difficult or less economical to extract, usually because the technology to
reach it has not been developed fully, or is too expensive. There are
several categories of unconventional natural gas.

• A form of “unconventional” natural gas is referred to as tight gas. This is

gas that is stuck in a very tight formation underground, trapped in
unusually impermeable, hard rock, or in a sandstone or limestone
formation that is unusually impermeable and non-porous (tight sand).

• Shale gas is another form of “unconventional” natural gas. Shale gas is

natural gas produced from shale. Shale gas has become an
increasingly important source of natural gas in the United States over
the past decade

• The interest for gas shale has increased and there are potential gas
shale in Canada, Europe, Asia, and Australia.
 Conventional and
nonconventional gas
Production costs for oil
source: IHS CERA
 Wet-rich-lean-dry gas
• Wet gas: Natural gas containing significant heavy hydrocarbons.
Propane, butane and other liquid hydrocarbons can be liquefied. Wet
gas is also called rich gas.

• Dry gas: Natural gas that contains a few or no liquefiable liquid

hydrocarbons. Dry gas is also called Lean gas.
 Liquefied Natural Gas - LNG
• Natural gas, mainly methane and
ethane, which has been liquefied at
cryogenic temperatures. This
process occurs at an extremely low
temperature (-161oC) and a pressure
near the atmospheric pressure.

• When a gas pipeline is not available

to transport gas to a marketplace, the
gas can be converted to LNG and
transported in LNG carrier.

• The LNG are re-gasified at the

marked and put into the gas supply
system.
 Compressed Natural Gas - CNG

• CNG (compressed natural gas) is

natural gas pressurized and
stored in cylindrical or spherical
tanks at pressures up to 250 bar.

• Typically it has the same

composition as the local "pipeline"
gas, with some of the water
removed.

• Different type of material and

structural arrangement can be
used in design if the storage
arrangement.
 Natural gas liquids - NGL
• Components of natural gas that are liquid at surface in field facilities or in
gas-processing plants.

• Natural gas liquids can be classified according to their vapour

pressures*:
– A) Condensate: similar to light oil
– B) Natural gasoline (naphtha): a natural gas liquid with a vapour pressure
intermediate between condensate and liquefied petroleum gas.
– C) Gas mainly composed of propane and butane, which has been liquefied
at low temperatures and moderate pressures.

• Natural gas liquids include propane, butane, pentane, hexane and

heptane, but not methane and ethane, since these hydrocarbons need
refrigeration to be liquefied.

*Vapour pressure is the pressure of a vapour in equilibrium with its non-vapour phases. All solids and liquids have a tendency to
evaporate to a gaseous form, and all gases have a tendency to condensate back. At any given temperature, for a particular
substance, there is a partial pressure at which the gas of that substance is in dynamic equilibrium with its liquid or solid forms. This is
the vapour pressure of that substance at that temperature.
 Natural gas condensate
• Natural gas condensate consists of hydrocarbons which are in the
gaseous state under reservoir conditions and which become liquid when
temperature or pressure is reduced.

• Condensate is mainly composed of propane, butane, pentane and

heavier hydrocarbon fractions.

• The condensate is not only generated in the reservoir, it is also formed

when liquid drops out, or condenses, from a gas stream in pipelines or
surface facilities.

• The natural gas condensate is also referred to as simply condensate, or

gas condensate, or sometimes natural gasoline because it contains
hydrocarbons within the gasoline boiling range.
 Liquefied petroleum gas - LPG
• Gas mainly composed of propane and butane, which has been liquefied at low
temperatures and moderate pressures.

• Varieties of LPG bought and sold include mixes that are primarily propane, mixes
that are primarily butane, and mixes including propane, propylene, n-butane,
butylene and iso-butane.

• Liquefied petroleum gas is also called bottle gas. At atmospheric pressure, it is easily
converted into gas and can be used industrially or domestically.

• The term is commonly abbreviated as LPG.

 Hydrocarbon “Products”

C1 C2 C3 C4 C5 C6 C7 C8 C9 C10+

Oil stable

Oil unstable

stable Condensate

unstable Condensate

LPG

NGL

Rich gas

Sales gas and LNG

C1 C2 C3 C4 C5 C6 C7 C8 C9 C10+

HYDROCARBONS AND SALES PRODUCTS

From wellstream to sales products
Options
Piped gas
LNG
CNG
GTL
Methanol
Dry gas (sales gas)

Products
NGL NGL
extraction NGL fractionation

Ethane
Propane
Pipeline transport Butane
Offshore Rich gas Water Condensate
Processing
CO2, H2S
separation Offshore
loading
Products

Crude oil
Water Tanker transport refining Gasoline
Crude Oil Jet fuel
Well-stream Diesel
Oil Fuel oil
Gas/condensate Asphalt
Gas
Units used in the Oil and Gas industry
•bbl = barrel
•mbbls = thousand bbl
•mmbbls = million bbl
•boe = barrels of oil equivalents
•mmcf million cubic feet
•bcf billion cubic feet (billion = 1000 million)
•tcf trillion cubic feet (trillion = 1000 billion)
•Sm3 standard cubic metre
•mcm thousand cubic metres
•mmcm million cubic metres
•bcm billion cubic metres
 Gas and oil volumes
• 1 Sm3 gas = 1 m3 gas at 1,01325 bar and 15OC (S=standard)
• 1 Nm3 gas = 1 m3 gas at 1,01325 bar and 0OC (N=normal)
• 1 Sm3 gas = 0,95 Nm3 gas (273/288)

• 1 Sm3 gas = 35,3 scf gas

• 1 Tcf = 28,33 Gm3

• 1 bbl oil = 0,159 m3 oil

 Petroleum resources and
production
Definitions related to Resources and production
hydrocarbons on the NCS

Energy through Global resources and

combustion production

Accumulations of
hydrocarbons

Classification of resources
Oil and gas => Energy

• Basic unit for energy is joule (J)

– 1 joule = 1 Nm
– 1 joule = 0,2389 cal (1kcal=4187 J)
– 1 joule = 0,000948 Btu (1Btu=1055 J)
– 1 kJ = 103 J
– 1 MJ = 106 J
– 1 GJ = 109 J

A kilocalorie (symbol: kcal), is the amount of heat (energy) needed to increase

the temperature of one kg of water by 1 °C.
 Energy and Effect
• Basic unit for energy: joule (J)
• Basic unit for effect: watt (W)

– 1 joule = 1 watt second (Ws), {= 1 Nm}

– 1 watt = 1 joule/second {= 1 Nm/s}

– 1 hp = 0,7355 kW

– 1 Watt-hour (Wh) = 3600 J

– 1 kWh = 3,6 MJ

– 1 MWh = 3,6 GJ
– 1 GWh = 3,6 TJ
– 1 TWh = 3600 TJ
 Energy through combustion
• Hydrocarbon contains carbon and hydrogen give out a large amount of energy
under combustion
• Combustion is a chemical reaction between a hydrocarbon and oxygen
• Hydrocarbons are currently the main source of the world’s energy sources and
can be used in many processes
 Energy through combustion
• Common properties of hydrocarbons are the facts that they produce steam,
carbon dioxide and heat during combustion and that oxygen is required for
combustion to take place. The simplest hydrocarbon, methane, burns as follows:

– CH4 + 2 O2 → 2 H2O + CO2 + Energy

• Another example of this property is propane:

– C3H8 + 5 O2 → 4 H2O + 3 CO2 + Energy
– CnH2n+2 + (3n+1)/2 O2 → (n+1) H2O + n CO2 + Energy

• Burning of hydrocarbons is an example of exothermic chemical reaction.

– An exothermic reaction is a chemical reaction that releases heat. It gives net energy to its surroundings. The
energy needed to initiate the reaction is less than the energy that is subsequently released.
 Electrical Power Generation
• In electricity generating applications the turbine is used to drive a synchronous generator
which provides the electrical power output but because the turbine normally operates at
very high rotational speeds of 12,000 r.p.m or more it must be connected to the generator
through a high ratio reduction gear since the generators run at speeds of 1,000 or 1,200
r.p.m. depending on the AC frequency of the electricity grid.

 Simple Systems consisting of the gas turbine driving an electrical power generator

 Combined Cycle Systems which are designed for maximum efficiency in which the hot
exhaust gases from the gas turbine are used to raise steam to power a steam turbine with
both turbines being connected to electricity generators.
 CO2 emission

Statistics Norway
Turbines contribute with 81%
Basis for production of electric power

Basis for production of electric power - 2009

100
90

80

70

60
Percent

50

40

30

20

10

0
North America Latin America Western Central and Africa Middle East East Asia
Europe Eastern Europe and South Asia

Oil, gas, coal,biomass Hydro power Nuclear power Re-newables (sun, wind)
Basis for production of electric power
in US in 2009 and 2013

Emmision: Kg/GJ
Coal Gas Factor
CO2 95 56 1,7
NOX 292 93 3,1
 Heating value per kg
Liquid Gas
• 1 kg gasoline =43,53 MJ
• 1 kg methane =55,56 MJ
• 1 kg petroleum =43,34 MJ
• 1 kg diesel =42,71 MJ • 1 kg ethane =51,92 MJ
• 1 kg diesel (light marine) =42,29 MJ • 1 kg propane =50,39 MJ
• 1 kg fuel oil 3 =41,03 MJ • 1 kg isobutane =49,40 MJ
• 1 kg fuel oil 4 =40,61 MJ • 1 kg butane =49,53 MJ
• 1 kg fuel oil 5 =40,20 MJ
• 1 kg isopentane =48,94 MJ
• 1 kg fuel oil 6 =39,78 MJ
• 1 kg pentane =49,05 MJ
 Heating value per Sm3
Liquid Gas
• 1 Sm3 gasoline =31784 MJ • 1 Sm3 methane =37,61 MJ
• 1 Sm3 petroleum =33805 MJ • 1 Sm3 ethane =65,88 MJ
• 1 Sm3 diesel/gas oil =35449 MJ • 1 Sm3 propane =93,75 MJ
• 1 Sm3 diesel/light marine =35947 MJ • 1 Sm3 isobutane =121,2 MJ
• 1 Sm3 fuel oil 3 =38158 MJ • 1 Sm3 butane =121,5 MJ
• 1 Sm3 fuel oil 4 =38580 MJ • 1 Sm3 isopentane =149,1 MJ
• 1 Sm3 fuel oil 5 =38590 MJ • 1 Sm3 pentane =149,3 MJ
• 1 Sm3 fuel oil 6 =38590 MJ • 1 Sm3 sales gas =40 MJ

Note that the heating value of 1 Sm3 fuel oil is roughly the same as
the heating value of 1000 Sm3 sales gas
 Oil equivalents
• For certain purposes it is of interest to look at the totality of oil and gas
resources, and then measure oil and gas resources in a common unit.

• The common unit should reflect the value of the resources. Since value is
linked to energy it is reasonable to look at energy equivalents.

• The main products from the up-stream oil/gas activities are crude oil
(heavy hydrocarbon components) and sales gas (mainly methane)

• The heating value of 1 Sm3 liquids (diesel/light fuel oil) is approximately

equal to the heating value of 1000 Sm3 methane.

• Hence: 1 Sm3 oil equivalents = 1 Sm3 oil = 1 Sm3 condensate =

1000 Sm3 gas
 Oil (energy) equivalents
• 1000 Sm3 gas = 1 Sm3 o.e.
• 1000 Sm3 gas = 40000 MJ
• 1 tonne LNG = 1,400 Sm3 o.e.
• 1 tonne ethane = 1,300 Sm3 o.e.
• 1 tonne LPG = 1,260 Sm3 o.e.
• 1 tonne diesel = 1,060 Sm3 o.e.
• 1 tonne fuel oil = 1,000 Sm3 o.e.
• 1 Sm3 oil = 1 Sm3 o.e. (0,85kg/l)

Note: Oil equivalent is an inaccurate unit used

for comparison of oil and gas volumes!
 Oil (energy) equivalents - how much is
one oil equivalent?
• 1000 Sm3 gas = 1 Sm3 o.e.
• 1 Sm3 o.e. = 40 GJ
• 1 Sm3 o.e. = 11,1 MWh
• 1 Sm3 o.e. = 9,555 Gcal
• 1 Sm3 o.e. = 37,915 MMBtu

A typical Norwegian household may have an energy consumption (electrical) of about

30000kWh per year. This corresponds to about 3000 Sm3 gas or 3,0 Sm3 oil equivalents.

A car driving 20000 km per year consumes about 1500 litres gasoline or 1,5 Sm3 oil
equivalents.

For travelling by aircraft the fuel consumption is about 30 litres gasoline per seat per hour. A
family of 4 persons travelling to the Canary Islands once a year (10 hours) the consumption is
1200 litres of gasoline or 1,2 Sm3 oil equivalents.

Emissions of CO2 are directly proportional to the consumption of fuel!

 4. Petroleum resources
and production
Definitions related to Resources and production
hydrocarbons on the NCS

Energy through Global resources and

combustion production

Accumulations of
hydrocarbons

Classification of resources
Exploration concept
• Sedimentary basin: A depression
filled with sedimentary rocks

• Petroleum system: A petroleum

system within the basis comprise
mature source rock, migration
Basin routes, reservoir rock, trap and seal
Play
• Plays: Localized collection of
Prospect reservoir opportunities with similar
combinations of source, migration
Discovery routes, reservoir, trap and seal

• Lead: Interesting reservoir

structures within a play (rough
indication of a prospect)

• Prospect: Lead which has been

fully evaluated/mapped and may be
ready for drilling

• Discovery: Discovery of
hydrocarbons after drilling a
prospect
 Common definitions of reserves
Reserves are those quantities of petroleum claimed to be commercially recoverable by
application of development projects to known accumulations under defined conditions.
Reserves must satisfy four criteria: They must be:
•discovered through one or more exploratory wells
•recoverable using existing technology
•commercially viable
•remaining in the ground

All reserve estimates involve uncertainty, depending on the amount of reliable geologic and
engineering data available and the interpretation of those data.

The relative degree of uncertainty can be expressed by dividing reserves into two principal
classifications – proved and unproved. Unproved reserves can further be divided into two
subcategories – probable and possible to indicate the relative degree of uncertainty about
their existence.

Consequently we have three classes of reserves:

•Proved reserves – referred to as 1P
•Probable reserves – referred to as 2P
•Possible reserves – referred to as 3P
 Common definitions of resources
Contingent resources 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 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 a chance of development.
 4. Petroleum resources
and production
Definitions related to Resources and production
hydrocarbons on the NCS

Energy through Global resources and

combustion production

Accumulations of
hydrocarbons

Classification of resources
 The SPE Petroleum Resource Classification Framework
showing the range of uncertainty in the estimate along the horizontal axis and the level of
maturity of the project in reaching commerciality along the vertical axis

RESOURCES

RESOURCES
 Resources and reserves - NPD
• Resources is a collective term that covers technically recoverable quantities
of petroleum. The resources are classified according to maturity

• Contingent resources refers to discovered quantities of petroleum for which

no development decision has yet been made.

• Undiscovered resources are petroleum volumes which are expected to be

present in defined play models, confirmed and unconfirmed, but which have
not yet been proven through drilling

• Reserves include remaining recoverable petroleum resources in deposits

that the licensees have decided to develop, and for which the authorities
have approved the PDO or granted a PDO exemption. Reserves also
include petroleum resources in deposits that the licensees have decided to
develop, but for which the plan has not been processed by the authorities in
the form of a PDO approval or a PDO exemption.
NPD's resource classification

F = originally recoverable quantities

A = additional quantities by improve recovery
 Examples: Oil discovery in the Barents Sea
• 06.09.2013 OMV (Norge) AS, operator of
production licence 537, is in the process of
completing drilling of wildcat well 7324/8-1.
The well proved oil.
• The discovery was made about 170 kilometres
northeast of 7220/8-1 Johan Castberg and about
310 kilometres north of Hammerfest.
• The objective of the well was to prove petroleum
in Middle and Early Jurassic reservoir rocks
(upper Realgrunnen subgroup). The well
encountered a 50-60-metre oil column in the
Realgrunnen subgroup with reservoir properties
as expected.
• Preliminary calculations estimate the size of the
discovery at between 10-26 million standard cubic
metres (Sm3) of recoverable oil. The results
confirm oil in the play from the Early and Middle
Jurassic Age. The well was not formation-tested,
but extensive data acquisition and sampling were
carried out. Further delineation of the discovery
will be considered.
• This is the first exploration well drilled in
production licence 537, which was awarded in the
20th licencing round in 2009.
• The well was drilled to a vertical depth of 905
metres below the sea surface and terminated in
the Snadd formation from the Late Triassic.
Water depth is 373 metres. The well will now be
permanently plugged and abandoned.
• Well 7324/8-1 was drilled by the Leiv Eriksson
drilling facility, which will proceed on to drill
wildcat well 7324/7-1 on another prospect in the
same production licence.
 4. Petroleum resources
and production
Definitions related to Resources and production
hydrocarbons on the NCS

Energy through Global resources and

combustion production

Accumulations of
hydrocarbons

Classification of resources
Petroleum resources NCS per 31.12.2017
(Source: Norwegian Petroleum Directorate)
Exploration
The Norwegian parliament
has opened most of the
North Sea, the Norwegian
Sea and the Barents Sea
South for petroleum
activities.

The Norwegian Petroleum

Directorate has estimated
the undiscovered
resources on the
Norwegian shelf at
approximately four billion
standard cubic metres
(Sm3) of recoverable oil
equivalents.

This corresponds to around

47 per cent of all the
remaining resources on the
shelf.
Historical and expected production in Norway
1970-2022
Production history and forecast distributed
per resource category, 2010-2030
Uncertainties in estimates
of reserves and production
Produced and remaining reserves in different fields
 Lifetimes of selected fields
(Source: Norwegian Petroleum Directorate)

• A field’s expected lifespan changes over time. This is because throughout the production period, increased
insight and knowledge is gained by the operator – which, in turn, provides the basis for implementing
additional projects that were not profitable at the time of development.

• In addition the development and use of new technology have made it possible to implement projects that
were formerly not profitable.
 Production trends for some fields

• The figure shows that actual production from these fields has proved to differ
greatly from the estimates made when the original development plans were
submitted.

• Based on the original plans, these fields should now have been closed
down. Due to efficient operations and increased recovery these fields will,
however, remain on stream for many years to come.

• At Ekofisk, the operator hopes to continue production until 2050.

• Most of the field on NCS have produced more than planned in the PDO!
 4. Petroleum resources
and production
Definitions related to Resources and production
hydrocarbons on the NCS

Energy through Global resources and

combustion production

Accumulations of
hydrocarbons

Classification of resources
Distribution of proved oil reserves
1997, 2007, 2017
Production and consumption (oil)
Distribution of proved natural gas reserves
in 1997, 2007 and 2017
Production and consumption (gas)
10 Questions
1. What is condensate?
2. What is natural gas?
3. What is unconventional gas?
4. What is NGL?
5. What is LPG?
6. What is LNG?
7. What are the basic units for energy and effect and how
are they related?
8. What is dry gas and what is wet gas?
9. What is a discovery and what is a field?
10. How many barrels of oil equivalents are 1000Sm3 gas?