Oil and Gas exploration

Drilling Lease gadget

The drilling lease is an essential step in the

exploration for oil and gas

Governments hold auctions where oil and gas companies bid for the rights to drill in particular regions. Seismic surveys are usually done on areas of interest for the drilling activity.

Seismic companies set off small explosions which produce sonar shock waves that bounce back to metering devices. This indicates the type of rock and earth underlying the land of interest. Trained geologists will then read the seismic maps and determine whether the formation could hold oil and gas. This gives interested parties enhanced predictability of whether or not there is a good chance of a reservoir of oil or gas in the ground.

drilling lease

Drilling lease bids are usually in the millions of dollars for the drilling lease rights. A good well can make over 50,000 dollars a day so the exploration costs are quickly recouped if a successful producing well is drilled. The cost of bringing the oil and gas to market is also a big factor for companies. How much pipeline is needed to get the product to a refinery, and or trucking or shipping costs.

The type of raw product can vary greatly. Sweet or sour gas has much different properties and development costs. H2S gas is very corrosive and the life of pipe or vessels for containment is greatly reduced compared to sweet gas. Heavy oil may require large powerful pumps to assist in the extraction of the resource.

Most wells will have a mixture of water, oil and gas. These elements need to be separated for consumer use. Water injection is also used to fully deplete an underground reservoir. Multiple wells are drilled into the same reservoir pool and then water is pumped into one or several locations to force the remaining gas or crude out. The easiest locations for drilling leases have mostly been utilized so the industry faces more challenges in finding new discoveries.

oil and gas resources

The exploration of the sea floor has been brought to new heights as the demand for oil increases with global population. Large volumes are located in increasing difficult spots of extraction. Deep sea drilling is very expensive and poses potential hazards as we have seen in the recent Gulf of Mexico oil spill disaster

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