What is Crude oil Role of Crude oil in global economy Exploration of Crude Oil. Drilling of petroleum and natural gas Reservoir Drive Mechanisms Evaluation of Gasoline Evaluation of diesel

1. Crude Oil Analysis

2. What is Crude oil?
 Crude oil is a liquid fuel source located underground.
 It has between 50 and 97 percent of oil, hydrocarbons. Between 6 to
10 percent of nitrogen, oxygen, and sulfur
 Oil is called a fossil fuel because of its origins. It was created
400 million years ago when the remains of algae and plankton fell to
the bottom of the ocean. It combined with mud and then was covered
by layers of sediment.
 The intense pressure heated them over millions of years. It first
became a waxy substance called kerogen. It became liquid oil after
more pressure and heat. That's why it's a nonrenewable resource.

3. This is What it looks like….
 It is extracted through drilling.

4. Role of Crude oil in global economy.
 Higher oil prices increase prices of other fuels, such as
gasoline, butane or propane, and natural gas. It's responsible for 55
percent of the price of gasoline. Distribution and taxes influence the
remaining 45 percent. That drives up the cost of electric power
generation and manufacturing.
 That creates higher food prices. It impacts 43 percent of industrial
products, 21 percent of residential and commercial use, and 3 percent
of electric power. As a result, higher oil prices increase the cost of
everything you buy, creating inflation.

5. How oil price rise impacts economy?
 India's significant oil imports (70% of its total consumption) are a big drag on its
finances.
 Take a look at import costs during recent years.
India's oil import bill had
softened after the crash.

6.  With rising oil prices, the import bill is getting fatter.
 Changes in oil prices have a spillover effect on consumer inflation in the country.
 Consumers are facing the brunt because taxes now account for more than 50% of the price of
petrol.
Increasing cost of imports in million of
dollars due to increased consumption.

7. What are oil price determinants?
 There are many factors influential in determining the cost of crude oil at
global level.
 Primary two factors are as follows:-
1. Supply and Demand.
2. Market Sentiment.
 The concept of supply and demand is fairly straightforward. As demand
increases the price should go up. As demand decreases the price should go
down. But not in case of crude oil.

8.  The price of oil is set in the
oil futures market.
 An oil futures contract is a binding
agreement that gives one the right
to purchase oil by the barrel at a
predefined price on a predefined
date in the future.
 The other key factor in determining
oil prices is market sentiment. The
mere belief that oil demand will
increase dramatically at some point
in the future can result in a dramatic
increase in oil prices in the present.

9. Present scenario of Petroleum Industries in India.
 India has witnessed a spectacular growth in the refining
sector over the years. In 1947, there was only one refinery
located in Digboi with a capacity of 0.25 million tonnes
per annum.
 Today, there are 14 refineries in the country, 13 in the
public sector and one in the joint sector, with an installed
capacity of 60.4 million tonnes per annum.
 Out of the 13 PSU refineries, 6 are owned by Indian Oil
Corporation Limited (IOCL), while the other 7 are owned
by Hindustan Petroleum Corporation Limited (HPCL).
 Madras Refineries Limited (MRL) owns two while one
each is owned by Bharat Petroleum Corporation Limited
(BPCL), Cochin Refineries Limited (CRL) and
Bongaigaon Refinery & Petrochemicals Limited (BRPL).

10. Exploration of Crude Oil.
 Three conditions must be present for an oil or gas field to exist.
1) A source rock, such as shale, that is rich in organic material.
2) Reservoir rock, such as, porous and permeable limestone, dolomite or
sandstone.
3) A trapping mechanism, such as, anticline, faulted strata or any of the
different kinds of traps.

11. Drilling of petroleum and natural gas.
• Drilling oil and gas well is a complicated and expensive operation
which needs versatile knowledge of engineering and geosciences.
Selection of drill site is an important criterion which is highly based on
geological evidence indicating the possible accumulation of
petroleum.

12.  Surface condition must be suitable for drilling purpose. After completion of
survey and selection, the site will be cleared and levelled.
 All drilling equipments and necessary components are moved to the location.
The derrick is raised over the substructure where main bore hole will be and
other equipments such as, engines, pumps, rotating and hoisting equipments are
aligned and connected. Drilling fluid is stored in the location.
 After all these arrangements, the drilling operation begins.

13. Reservoir drive mechanisms:- (a) Dissolved gas drive. (b) Gas cap drive. (c) Water drive.
1) Dissolve gas drive, which is the result of expansion of gas dissolved in oil.
2) Gas cap drive, which is done by the expansion of gas contained in the reservoir above
the oil.
3) Water drive, where the force is exerted by the upward pressure of water as it expands and
moves into the regions of lower pressure as oil is produced.
Reservior Drive Mechanisms:-

14. Evaluation of crude oil as per key fraction.
 Quality of crude being processed affect,
• Plant capacity.
• Feed stock availability and quality for downstream units.
• Product pattern.
• Overall economics.

15. Evaluation of Gasoline:-
• Major parameters for gasoline and diesel specification are given below Major
Parameters of Gasoline Specifications Major parameters for gasoline included in
Bharat or Euro norms are:-
• Lead phase out.
• Lower benzene & aromatics.
• Lower olefin content.
• Limited Oxygen content.
• Lower Sulfur content.
Other parameters of importance are RON, MON, Lead, gum, oxidation stability,
density, VLI index, FBP. In case of reformulated gasoline aromatics, olefins oxygen,
Antiknock index, vapor lock index.

16. Evaluation of diesel:-
• Major Parameters of Diesel Specifications.
Major parameters for diesel included in Bharat or Euro norms are:-
• Low sulphur.
• Low aromatics.
• High cetane number.
• Lower density
• Lower distillation end point.
Other parameters for diesel are density, viscosity, cetane number distillation range,
sulphur, carbon residues, oxidation stability, Flash point, acid value, ash and water
contents.