In January 2001 alone, the United States produced an estimated 181 million barrels of crude oil and imported 273 million barrels from other countries. This oil gets refined into gasoline, kerosene, heating oil and other products. To keep up with our consumption, oil companies must constantly look for new sources of petroleum, as well as improve the production of existing wells.

How does a company go about finding oil and pumping it from the ground? You may have seen images of black crude oil gushing out of the ground, or seen an oil well in movies and television shows like "Giant," "Oklahoma Crude," "Armageddon" and "Beverly Hillbillies." But modern oil production is quite different from the way it's portrayed in the movies.

In this edition of HowStuffWorks, we will examine how modern oil exploration and drilling works. We will discuss how oil is formed, found and extracted from the ground.

Oil Exploration
Oil is a fossil fuel that can be found in many countries around the world. In this section, we will discuss how oil is formed and how geologists find it.

Forming Oil
Oil is formed from the remains of tiny plants and animals (plankton) that died in ancient seas between 10 million and 600 million years ago. After the organisms died, they sank into the sand and mud at the bottom of the sea.

Over the years, the organisms decayed in the sedimentary layers. In these layers, there was little or no oxygen present. So microorganisms broke the remains into carbon-rich compounds that formed organic layers. The organic material mixed with the sediments, forming fine-grained shale, or source rock. As new sedimentary layers were deposited, they exerted intense pressure and heat on the source rock. The heat and pressure distilled the organic material into crude oil and natural gas. The oil flowed from the source rock and accumulated in thicker, more porous limestone or sandstone, called reservoir rock. Movements in the Earth trapped the oil and natural gas in the reservoir rocks between layers of impermeable rock, or cap rock, such as granite or marble.

These movements of the Earth include:

• Folding - Horizontal movements press inward and move the rock layers upward into a fold or anticline.
• Faulting - The layers of rock crack, and one side shifts upward or downward.
• Pinching out - A layer of impermeable rock is squeezed upward into the reservoir rock.

Finding Oil
The task of finding oil is assigned to geologists, whether employed directly by an oil company or under contract from a private firm. Their task is to find the right conditions for an oil trap -- the right source rock, reservoir rock and entrapment. Many years ago, geologists interpreted surface features, surface rock and soil types, and perhaps some small core samples obtained by shallow drilling. Modern oil geologists also examine surface rocks and terrain, with the additional help of satellite images. However, they also use a variety of other methods to find oil. They can use sensitive gravity meters to measure tiny changes in the Earth's gravitational field that could indicate flowing oil, as well as sensitive magnetometers to measure tiny changes in the Earth's magnetic field caused by flowing oil. They can detect the smell of hydrocarbons using sensitive electronic noses called sniffers. Finally, and most commonly, they use seismology, creating shock waves that pass through hidden rock layers and interpreting the waves that are reflected back to the surface.

In seismic surveys, a shock wave is created by the following:

• Compressed-air gun - shoots pulses of air into the water (for exploration over water)
• Thumper truck - slams heavy plates into the ground (for exploration over land)
• Explosives - drilled into the ground (for exploration over land) or thrown overboard (for exploration over water), and detonated

The shock waves travel beneath the surface of the Earth and are reflected back by the various rock layers. The reflections travel at different speeds depending upon the type or density of rock layers through which they must pass. The reflections of the shock waves are detected by sensitive microphones or vibration detectors -- hydrophones over water, seismometers over land. The readings are interpreted by seismologists for signs of oil and gas traps.

Although modern oil-exploration methods are better than previous ones, they still may have only a 10-percent success rate for finding new oil fields. Once a prospective oil strike is found, the location is marked by GPS coordinates on land or by marker buoys on water.

Preparing to Drill
Once the site has been selected, it must be surveyed to determine its boundaries, and environmental impact studies may be done. Lease agreements, titles and right-of way accesses for the land must be obtained and evaluated legally. For off-shore sites, legal jurisdiction must be determined.

Once the legal issues have been settled, the crew goes about preparing the land:

1. The land is cleared and leveled, and access roads may be built.
2. Because water is used in drilling, there must be a source of water nearby. If there is no natural source, they drill a water well.
3. They dig a reserve pit, which is used to dispose of rock cuttings and drilling mud during the drilling process, and line it with plastic to protect the environment. If the site is an ecologically sensitive area, such as a marsh or wilderness, then the cuttings and mud must be disposed offsite -- trucked away instead of placed in a pit.

Once the land has been prepared, several holes must be dug to make way for the rig and the main hole. A rectangular pit, called a cellar, is dug around the location of the actual drilling hole. The cellar provides a work space around the hole, for the workers and drilling accessories. The crew then begins drilling the main hole, often with a small drill truck rather than the main rig. The first part of the hole is larger and shallower than the main portion, and is lined with a large-diameter conductor pipe. Additional holes are dug off to the side to temporarily store equipment -- when these holes are finished, the rig equipment can be brought in and set up.

Setting Up the Rig
Depending upon the remoteness of the drill site and its access, equipment may be transported to the site by truck, helicopter or barge. Some rigs are built on ships or barges for work on inland water where there is no foundation to support a rig (as in marshes or lakes). Once the equipment is at the site, the rig is set up. Here are the major systems of a land oil rig:

• Power system
  • large diesel engines - burn diesel-fuel oil to provide the main source of power
  • electrical generators - powered by the diesel engines to provide electrical power

   

• Mechanical system - driven by electric motors
  • hoisting system - used for lifting heavy loads; consists of a mechanical winch (drawworks) with a large steel cable spool, a block-and-tackle pulley and a receiving storage reel for the cable
  • turntable - part of the drilling apparatus

   

• Rotating equipment - used for rotary drilling
  • swivel - large handle that holds the weight of the drill string; allows the string to rotate and makes a pressure-tight seal on the hole
  • kelly - four- or six-sided pipe that transfers rotary motion to the turntable and drill string
  • turntable or rotary table - drives the rotating motion using power from electric motors
  • drill string - consists of drill pipe (connected sections of about 30 ft / 10 m) and drill collars (larger diameter, heavier pipe that fits around the drill pipe and places weight on the drill bit)
  • drill bit(s) - end of the drill that actually cuts up the rock; comes in many shapes and materials (tungsten carbide steel, diamond) that are specialized for various drilling tasks and rock formations

   

• Casing - large-diameter concrete pipe that lines the drill hole, prevents the hole from collapsing, and allows drilling mud to circulate

   

  Photo courtesy Institute of Petroleum Mud circulation in the hole

   

• Circulation system - pumps drilling mud (mixture of water, clay, weighting material and chemicals, used to lift rock cuttings from the drill bit to the surface) under pressure through the kelly, rotary table, drill pipes and drill collars
  • pump - sucks mud from the mud pits and pumps it to the drilling apparatus
  • pipes and hoses - connects pump to drilling apparatus
  • mud-return line - returns mud from hole
  • shale shaker - shaker/sieve that separates rock cuttings from the mud
  • shale slide - conveys cuttings to the reserve pit
  • reserve pit - collects rock cuttings separated from the mud
  • mud pits - where drilling mud is mixed and recycled
  • mud-mixing hopper - where new mud is mixed and then sent to the mud pits

• Derrick - support structure that holds the drilling apparatus; tall enough to allow new sections of drill pipe to be added to the drilling apparatus as drilling progresses

   

• Blowout preventer - high-pressure valves (located under the land rig or on the sea floor) that seal the high-pressure drill lines and relieve pressure when necessary to prevent a blowout (uncontrolled gush of gas or oil to the surface, often associated with fire)

Drilling
 

The crew sets up the rig and starts the drilling operations. First, from the starter hole, they drill 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:

1. Place the drill bit, collar and drill pipe in the hole.
2. Attach the kelly and turntable and begin drilling.
3. As drilling progresses, circulate mud through the pipe and out of the bit to float the rock cuttings out of the hole.
4. Add new sections (joints) of drill pipes as the hole gets deeper.
5. 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.

Drilling continues in stages: They drill, then run and cement new casings, then drill again. When the rock cuttings from the mud reveal the oil sand from the reservoir rock, they may have reached the final depth. At this point, they 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 have 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 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 is 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.

Once the well is completed, they 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.

Extracting the Oil
After the rig is removed, a pump is placed on the well head.

In the pump system, an electric motor drives a gear box that moves a lever. The lever pushes and pulls a polishing rod up and down. The polishing rod is attached to a sucker rod, which is attached to a pump. This system forces the pump up and down, creating a suction that draws oil up through the well.

In some cases, the oil may be too heavy to flow. A second hole is then drilled into the reservoir and steam is injected under pressure. The heat from the steam thins the oil in the reservoir, and the pressure helps push it up the well. This process is called enhanced oil recovery.

With all of this oil-drilling technology in use, and new methods in development, the question remains: Will we have enough oil to meet our needs? Current estimates suggest that we have enough oil for about 63 to 95 years to come, based on current and future finds and present demands.