Crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name petroleum covers both naturally occurring unprocessed crude oil and petroleum products that consist of refined crude oil. A fossil fuel, petroleum is formed when large quantities of dead organisms, mostly zooplankton and algae, are buried underneath sedimentary rock and subjected to both prolonged heat and pressure.

Oil Recovery (Drilling).

 After geologists of an oil company have located the general area in which petroleum is thought to occur, a well is drilled. Selecting the site for drilling requires detailed knowledge of the geologic features under the earth's surface. We can see from Figure 8-7 that of the three wells shown, all of which are reasonably close to the oil pool, only well B would actually produce oil. Drilling is also done to determine the extent of the reserves. Once the oil has been located, additional drilling might be done over an area around the first producing well to assess the geographic extent of the oil pool and its depth. This information allows geologists to estimate the amount of oil in the pool.

When a drilling site has been selected, the first job is to rig up, or to assemble the drilling rig derrick. This is routinely taken as a sign of activity of the entire oil exploration industry, and is periodically reported among the economic indicators. Figure 8-8 shows the changes in the number of active rigs in the period 1970-1990. A comparison with Figure 20-3 will show the logical existence of a positive correlation with the price of oil.

The next step is to begin the actual drilling; in the industry jargon, the well is spudded in. The drill bit, which grinds through the rock to cut the hole, is attached to sections of pipe called the drill stem. The portion of this stem sticking out of the ground is the kelly. The kelly is turned by an engine to provide the rotary motion needed for the drill bit to doits job. As the drill bit moves further into the earth's crust, the kelly gradually sinks in. At some point, the crew must stop drilling to add a new section of pipe to the drill stem and reattach the kelly. A top-notch crew can add a 30-foot section of pipe in 45 seconds. The drill bit is lubricated by mud. The hole is lined with casing, a steel pipe lining that prevents the upper portions of the well from caving in on top of the bit. Eventually, the drill bit will be worn to the point that it no longer cuts rock effectively. At that point, there is no alternative but to replace it, a job that requires pulling the pipe, meaning removing the kelly and all of the sections of pipe comprising the drill stem. On a very deep well, this chore can involve pulling up 10,000 feet or more of pipe, in thirty-foot sections. The drilling mud is examined for traces of oil, to determine when the reservoir has been penetrated. Once oil has been found, the drill pipe is pulled out, leaving the casing to protect against cave-ins. The first oil well in the United States, drilled by Edwin Drake in Titusville, PA, was only 69 feet deep. Today it is common to drill oil wells several thousands of feet deep, in some cases to an extreme of 25,000 feet (almost 5 miles!). The deeper the well, the more expensive it becomes, because of the labor involved in the drilling operation, the need to replace worn-out drill bits, and the cost of the pipe put down the drill hole. If oil is found, there are two general classes of recovery methods for bringing it to the surface. Conventional or primary recovery, usually recovers about 30% of the oil from a reservoir. There are two kinds of primary recovery. Flush production requires no work.