Introduction to oil and gas industry

INTRODUCTION TO THE OIL AND GAS INDUSTRY
Sbonelo Ngcongo
MSc in Petroleum Geosciences, University of Houston (USA)
October 2022

Address: 601 The Lineal, 24 Fredman Drive, Sandown, Sandton
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Source: BGS
❖ There are estimated 1.68 trillion
barrels of Crude Oil proven reserves
in the world as of 2021.
❖ Venezuela has been listed as the
leader on the list of largest Crude Oil
proven reserves in the world with 301
billion barrels.
❖ Saudi Arabia has the second-largest
amount of Crude Oil proven reserves
with 267 billion barrels.
❖ Canada has the third-largest Crude
Oil proven reserves with 170 billion
barrels.
❖ Libya has 49 billion barrels of
proven Crude Oil reserves, the most
of any country in Africa and more than
United States with 48.2 billion
barrels.
❖ It is one thing to have Crude Oil
proven reserves in abundance and
another thing to extract the Crude Oil
from the Earth’s sub-surface to
surface.
WHICH COUNTRIES HAVE THE WORLD LARGEST PROVEN CRUDE OIL
RESERVES ?

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Source: BP Statistical Review of World Energy 2022
WHICH COUNTRY PRODUCED MOST CRUDE OIL?
❖ In 2021, the top Crude Oil producers in the world were USA
(16.6M barrels per day), Saudi Arabia (11M barrels per day) and
Russia (11M barrels per day)
❑ Roughly 43% of the Oil World Production came from these
three countries.
❖ Canada trailed in fourth with 5.4M barrels produced per day.

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Source: BP Statistical Review of World Energy 2022
WHICH COUNTRY PRODUCED MOST CRUDE OIL?
❖ In 2021, Nigeria stood as the biggest Crude Oil
Producer in the African continent with the output
estimated at 1.6M barrels per day.
❑ Nigerian made the top 15 Crude Oil producers,
accounting for 1.8% of global production in
2021.
❖ However, in September 2022, according to
Bloomberg’s survey of monthly OPEC output.
❑ Angola’s average Crude Oil production has
increased to 1.175M barrels per day in August
2022 more than Nigerian’s 1.13M barrels per
day for the same period.
❑ Nigeria therefore lost its position as Africa’s
largest Crude Oil Producer to Angola in August
2022.
❑ Libya produced an average of 1.08M barrels
per day in August 2022, according to
Bloomberg’s survey Libya could soon overtake
Nigeria if it continues with the current trajectory.

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Fast Facts: Saudi Crude vs Venezuelan Crude
❑ Saudi Crude is much cheaper to extract and it is easy to refine.
o So, It is plentiful on the world market.
❑ Venezuelan Crude is much more expensive to extract and refine.
o So, isn’t a big factor in the market.

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GLOBAL CRUDE OIL SUPPLY VS DEMAND

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❖ The Oil and Gas Industry is one of largest sector in
the world in terms of dollar value.
❖ Crude Oil is the king of commodities, making the Oil
and Gas Industry an economic powerhouse.
❖ Oil and Gas companies remain among the most
powerful entities in the world.
❖ The industry employs hundred of thousands of
workers worldwide.
❑ And generates billions of dollars globally each
year.
❖ The industry is crucial to the global economic
framework, impacting everything from:
❑ Transportation
❑ Heating
❑ Electricity Generation
❑ Industrial production and manufacturing.

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❖ The Oil and Gas industry is broken down into three
segments: upstream, midstream, and downstream.
❑ The Upstream sector activities includes identifying
Crude Oil and Natural Gas deposits, and extraction of
these resources from Earth’s sub-surface to surface.
❑ The Midstream sector transports the produced Crude
Oil and Natural Gas from Upstream activities to
Downstream activities. The Midstream activities also
include processing and storing of Crude Oil and
Natural Gas.
❑ The Downstream sector receives Crude Oil and
Natural Gas and refines them into usable products. In
a Crude Oil refinery, Crude Oil is separated to its
components such as petrol, diesel, jet fuel or aviation
fuel, ship fuel, lubricants, LPG, Asphalt and other
petroleum products.
❖ The Upstream activities are most crucial because
without discovery of Crude Oil and Natural Gas, all
the rest would not exist.

OIL AND GAS COMPANIES
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❖ Many largest Oil and Gas Companies are involved in
all industry segments (integrated).
❑ They are engaged in the exploration, production,
processing and distribution of Crude Oil and
Natural Gas, and petroleum products ready for sale.
❖ These companies includes:
❑ Shell
❑ BP
❑ Total
❑ Exxon Mobil
❑ Chevron.
❑ PETROBRAS
❑ Eni
❖ And many other Integrated Oil Companies (”IOCs”),

OILFIELD SERVICE COMPANIES
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❖ Oil fields service companies provide specialized
expertise or equipment to the Oil and Gas companies.
❖ These companies contract their service to Oil and
Gas Companies to extract Crude Oil and Natural Gas
from Earth’s subsurface.
❑ Oil fields service companies conduct related
construction and maintenance activities on well sites
(Onshore and Offshore).
❖ These companies includes:
❑ Halliburton
❑ Schlumberger
❑ Baker Hughes
❑ Saipem
❑ TechnipFMC

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NATIONAL OIL COMPANIES
❖ National oil companies (NOCs) are oil and gas
companies fully or majority owned by national
governments where they are located.
❖ Many of the biggest state own oil companies operate in
the Middle East.
❖ Other state-owned oil giants are in Russia, China, as
well as Latin America and Africa.
❖ NOCs account for about 55% of global oil production
and according to World Bank they control up to 90%
of the global oil and gas reserves.

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NATIONAL OIL COMPANIES
❖ Most NOCs share some core characteristics:
❑ They are usually tied to the national purpose and serve
political and economic goals other than maximizing the
company profit.
❑ In many cases their objectives include:
o Wealth re-distribution
o Job creation
o General economic development
o Energy security

ONSHORE VS OFFSHORE DRILLING
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❖ The Oil and Gas industry business activities take place Onshore and Offshore.
❑ The word ” Shore” means “Land”
❑ Onshore means on the land. Therefore, in the Oil and Gas Industry any exploration and production
activities of Crude Oil and Natural Gas done on land is said to be Onshore.
❑ Offshore means off the land (which means on water). Therefore, any exploration and production of Crude
Oil and Natural Gas activities done on water is said to be Offshore.
Offshore Drill Rig
Onshore Drill Rig

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Offshore Oil & Gas Production Platform
Onshore Oil Production Wells (Pump Jacks)
ONSHORE VS OFFSHORE

OFFSHORE OPERATION
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❖ Floating Liquefied Natural
Gas (FLNG) Production
Platform transferring LNG
cargo to LNG carrier for
shipment
❖ Prelude and Concerto Gas
Fields – 200m off the coast
of Australia

OFFSHORE OPERATION
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❖ A Floating Production Storage
and Offloading (FPSO)
transferring Crude Oil to
shuttle tanker for shipment to
refineries

WHAT IS CRUDE OIL?
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❖ Crude Oil or “Petroleum” is a yellow to black
colored liquid (“Black Gold”) that is formed under
natural conditions.
❖ Like Coal, Crude Oil (and Natural Gas) are fossil
fuels, which means they were formed from the
remains of dead animals and plants that once lived
million years ago in a marine (water) environment
and buried under intense heat and a lot of pressure
in the absence of oxygen.
❖ Crude Oil (and Natural Gas) are finite and non-
renewable resources (once they are used, that’s it!)
❖ There are many different substances that have
essential everyday uses hidden in Crude Oil.
❑ Gasoline (Petrol), diesel, jet fuel, ship fuel, Methane
and LPG for cooking and heating, bitumen for road
surfacing and many other substances that play
important roles in our everyday lives are found in
Crude Oil.
Petrol
Crude Oil
Diesel Jet Fuel

WHAT IS CRUDE OIL?
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Mixture of hydrocarbons
❖ Crude Oil is a mixture of several thousand molecules
called “hydrocarbons” with different chain lengths
(number of carbon atoms), molecular weights and
boiling points.
❑ Hydrocarbons are molecules that are made from
carbon and hydrogen atoms ONLY.
❖ The simplest and shortest hydrocarbon molecule in
Crude Oil is methane (CH4).
❑ Methane is made up of one carbon atom and four
hydrogen atoms
o Methane gas is often found dissolved in Crude Oil
and can be present on its own as a gas cap above
Crude Oil reservoir.
o Methane gas is a principal component of Natural Gas,
and is often used for electricity generation, heating,
cooking in gas stoves and fuel for some vehicles.
Methane used for cooking

WHAT IS CRUDE OIL?
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❖ Other simplest hydrocarbons found in Crude Oil are:
❑ The mixture of Propane and Butane is LPG (Liquefied Petroleum Gas).
o LPG is also often used as fuel for gas heaters, cooking, grilling and in LPG powered vehicles.
o LPG could also be sourced from Natural Gas processing plant or LNG plant.
LPG Cylinders
LPG powered vehicle

WHAT IS CRUDE OIL?
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❖ The hydrocarbons group in Crude Oil described above are called alkanes.
❑ The key feature of Alkanes is that they are saturated molecules.
o Which means that every carbon atom has four single covalent bonds.
❖ Crude Oil is mostly made up of alkanes.
❑ Alkanes have the general formula of CnH2n+2
o This means if we know the number of carbon atoms (n) in an alkane, we can find the number of
hydrogen atoms present in any alkane.
o For example, we can find a molecular formular of Octane, an alkane with 8 number of carbon
atoms.
o The molecular formular for Octane is C8H18

WHAT IS CRUDE OIL?
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❖ Crude Oil also contain some minor quantities of
Sulphur, Oxygen, Nitrogen, Salts and some Metals
such as Nickel, Iron, Vanadium, Copper and
Arsenic.
❖ Crude Oils from different part of the world are not
the same. They contain different mixtures of
hydrocarbons and other compounds. That is why
they vary from light-colored liquids to dark thick
Crude Oils.

COMPOSITION OF CRUDE OIL BY WEIGHT
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❖ On average, Crude Oils are made of the following elements by weight:
❑ Carbon – 84 to 87 %
❑ Hydrogen – 10 to 14 %
❑ Sulphur – 0.05 to 6.0 % (hydrogen sulphide, sulphides)
❑ Nitrogen – 0.1 to 2.0 %
❑ Oxygen – 0.05 to 1.5%
❑ Metals – < 1.5 % (nickel, iron, vanadium, copper, arsenic)
Composition of Natural Gas by weight (more on next
presentations)

CLASSIFICATION OF CRUDE OIL
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❖ The Oil and Gas Industry generally classifies Crude Oil by:
❑ Its Sulphur content (Sweetness).
❑ Its API Gravity (Density).
❖ Depending on the amount of Sulphur, Crude Oil is referred as Sweet or Sour.
❑ Low Sulphur content (< 0.5 % weight) is called Sweet Crude.
❑ High Sulphur content (> 0.5 % weight) is called Sour Crude.
❑ Sweet Crude is desired because it causes less damage to refineries piping thus results in lower maintenance costs over
time.
❖ Sulphur is considered as an undesirable impurity because when burnt it generate Sulphur Oxides, which is a poisonous gas.
❖ Midstream companies and refiners that transport, store and process Sour Crude know that they need extra treating
capabilities to take out Sulphur and sweeten final products.
❑ Generally, a Crude Oil with high Sulphur content have a lower value than the one with low Sulphur content.

API vs Specific Gravity
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❖ Specific Gravity or Relative Gravity is a
dimensionless quantity - defined as the ratio of the
density of a substance to the density of water at
the specified temperature and pressure.
𝑆𝑝𝑒𝑐𝑖𝑓𝑖𝑐 𝐺𝑟𝑎𝑣𝑖𝑡𝑦 =
𝐷𝑒𝑛𝑠𝑖𝑡𝑦 𝑜𝑓 𝑎 𝑠𝑢𝑏𝑠𝑡𝑎𝑛𝑐𝑒
𝐷𝑒𝑛𝑠𝑖𝑡𝑦 𝑜𝑓 𝑤𝑎𝑡𝑒𝑟
❑ If the specific gravity of a substance is greater
than 1. A substance sinks in water.
❑ If the specific gravity of a substance is less than
1. A substance floats in water.
❖ API Gravity which stands for the American
Petroleum Institute Gravity, is a commonly used
index of the density of Crude Oil or Petroleum
Liquids and compare to water.
❑ If the API Gravity of a petroleum liquid is greater
than 10. It is lighter and floats in water.
❑ If the API Gravity less than 10. A petroleum liquid
is heavy and sinks in water.

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❖ API Gravity and Sulphur content are the major factor for determining:
❑ Crude Oil Pricing.
❑ How demand there is for a specific Crude Oil.
❖ High API Gravity (or low density) is called Light Crude.
❖ Low API Gravity (or high density) is called Heavy Crude.
❖ Crude Oil typically have API between 15 to 45 degrees.
❖ Light Crude is typically in the range of 35 to 45 API.
❖ Generally, Lighter and Sweeter Crudes (low Sulphur Content) command a higher price because they contain shorter
chains hydrocarbons, that can be easily refined and produce petrol and diesel, which are in high demand by commercial
entities and consumers.
❖ However, for some refiners who have designed their refineries to process Sour Crudes (high Sulphur content), they prefer
Sour because it is much cheaper than Sweet Crude.
❑ A Sour Crude refinery can remove Sulphur compounds and generate high value products that meet all the standard sales
specifications.

DIFFERENT CRUDE OIL QUALITIES
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❖ Crude Oil comes in very different qualities.
❑ Gravity API reflects the composition of Crude Oil: proportion of lighter versus heavier hydrocarbons components.
❖ Sulphur compounds usually occur in all fractions of Crude Oil, but generally, the heavier the fraction the higher the Sulphur content.

API VS SULPHUR CONTENT OF SELECTED CRUDE OILS
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❖ There are over hundred different Crude Oil types traded
on the market these days.
❖ These Crude Oils are typical labeled by the regions they
come from.
❖ The three most well-known regional benchmark Crude
Oils are WTI, Brent and OPEC.
❑ WTI stands for West Texas Intermediate. This Crude
Oil is sourced from USA Oil Fields. Its typically on the
Lighter and Sweeter end of the spectrum at an API
Gravity of 39.6 and Sulphur content of 0.24%. WTI is the
pricing benchmark in the USA.
❑ Brent Crude Oil drilled out the from North Sea between
UK and Norway. This Crude Oil is also Light and Sweet
with an API Gravity of 38.3 and Sulphur content of
0.37%. Brent Crude is the pricing standard for Crude Oil
in the UK.
❑ OPEC. The Crude Oil from these regions is typically on
the Heavy and Sour end of the spectrum.
Cheap
Expensive

OTHER WELL-KNOWN BLEND: NIGERIA’S BONNY LIGHT CRUDE OIL
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❖ Bonny Light Crude Oil is a higher grade of Nigerian’s Crude Oil produced in the
Niger Delta Basin and named after the City of Bonny.
❖ Bonny Light is an important benchmark Crude Oil for all Western African Crude
Oil Production.
❖ Bonny Light is light-sweet Crude with the API of 32.9 and Sulphur content that
varies from 0.14% to 0.16%.
❖ The low Sulphur content of Bonny Light Crude Oil makes it a highly desired
grade for its low corrosive effects to refinery infrastructure and low environmental
impact of its byproducts.
❖ Bonny Light is regarded as more valuable than the other Crude Oils with low API
as more high-value products are produced in the refinement.
❖ Bonny Light has particularly good petrol yields, which has made it popular for
US and European refineries.

OTHER WELL-KNOWN TAPIS BLEND: MALAYSIAN CRUDE OIL
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❖ Tapis Crude Oil is produced offshore in the South China Sea, East of Peninsular
near the Malaysian peninsular.
❖ Tapis Blend is a high quality, extra light Crude Oil of API gravity of 45.7 ℃ with an
extremely low Sulphur content of about 0.034%.
❖ Thus, this making Tapis Crude highly desirable for refining into high quality
petrol, diesel, jet fuel and other fuels.
❖ Its value also come from the fact that WTI and Brent Crudes are difficult and
expensive to export to Asia.
❖ The price of the Tapis in Singapore is often considerable higher than the price of
the benchmarks such as WTI and Brent.

CRUDE OIL TYPES AROUND THE WORLD
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❖ API Gravity and
Sulphur content
major affect the
Crude Oil Price.
❖ Crude Oils that are
light and sweet are
usually priced higher
than sour Crude
Oils.
❖ The geographic
location of Crude Oil
is also important
because it affects the
transportation cost to
the refinery.

CRUDE OIL REFINERY
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❖ Crude Oil Refineries transform the Crude
Oil into petroleum products for use as fuels
for transportation, heating, paving roads,
generation electricity and as feedstocks for
petrochemical industry.
❖ A typically Crude Oil Refinery costs billions
of dollars to build and millions of dollars to
maintain.
❖ A Refinery runs 24 hours a day, 365 days a
year and requires large number of
employees to run.
❖ A Refinery is generally located near major
markets of petroleum products.

CRUDE OIL REFINERY
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❖ Crude Oil Refineries have the main goal to convert as
much of the barrel of Crude Oil into transportation
fuels.
❑ 1 barrel = 42 gallons ~ 159 liters.
❖ About 47% of a typical barrel of Crude Oil is used to
produce gasoline (petrol) and about 23% is refined to
diesel.
❑ The product output of the refinery varies depending on:
o Quality of the Crude Oil to be refined.
o Refining processes the refinery has.
o Market demand for specific petroleum products.

CRUDE OIL REFINERY
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❖ All Crude Oil Refineries performs the
following three basic steps to yield
usable petroleum products:
❑ Fractional Distillation (separation)
o Fractional means separated parts
o Distillation means separated using
boiling points
❑ Cracking (conversion)
❑ Reforming (rearranging)

FRACTIONAL DISTILLATION OF CRUDE OIL
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.
❖ In order for hydrocarbons molecules in Crude
Oil to be usable, we need to separate them.
❖ To do that, we apply a technique called
Fractional Distillation.
❖ Fractional distillation takes place in tall vertical
columns/towers that are steadily cooler towards
the top and hotter at the bottom (i.e. temperature
gradient ~ 40 ℃ to 350 ℃).
❖ The vertical towers have diameter ranges from
0.5 to 6 meters and 6 to 60 meters height.
❖ The towers are installed with series of stainless -
steel trays that collect separated hydrocarbons
from Crude Oil.
❖ Atmospheric fractional distillation provides most
of the feed for other process units in the refinery.
❖ For most refineries, the bottoms from the
atmospheric column are sent to the vacuum tower
for further separation.
Fractional Distillation Columns

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❖ In fractional distillation process, Crude Oil
is separated into its component parts or
hydrocarbon fractions.
❖ Fractions contain hydrocarbons with
similar number of carbon atoms and
similar molecular masses.
❑ A fraction is a group of hydrocarbons all
with boiling points within a specific
temperature range.

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❑ For example:
o Petrol contains a mixture of hydrocarbons
with 5 to 10 carbon atoms.
o Jet fuel contains contains a mixture of
hydrocarbons with 11 to 14 carbon atoms.
o Diesel contains a mixture of hydrocarbons
with 14 to 20 carbon atoms.
❖ Petrol fraction is the most consumed
petroleum product in the world.
❖ United States and China are the leading
consuming countries worldwide of petrol for
running their advanced economies.
Crude Oil is separated into Fractions (Fuels)

PROPERTIES OF HYDROCARBONS
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❖ Fractions show a change in properties. These properties include:
❑ Boiling point - temperature that turns a liquid into gas.
❑ Flammability - measure of how easily a substance burns.
❑ Viscosity - measure of how thick a liquid is.
❑ Chain length - number of carbon atoms in each molecule.
❖ The changes in properties are as follows:
❑ The longer the chain length the higher the boiling point.
❑ The longer the chain length the higher the viscosity.
❑ The shorter the chain length the high the flammability.

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Atmospheric fractional distillation is carried out as
follows:
❖ The Crude Oil is heated in a furnace to almost
400℃ or above at the atmospheric pressure, after
water, sulfur, nitrogen compounds and other
impurities are removed.
❑ Most hydrocarbon fractions in Crude Oil will boil and
evaporate at this temperature (Evaporation).
❖ The heated gas/liquid mixture of Crude Oil is fed
into a lower section of the fractional distillation
column.
❖ Substances that remain in their liquid state sink to
the bottom of the column and are pumped out and to
be broken down elsewhere in the refinery. This
sticky black substance is called a residual oil.
❖ Hydrocarbons fractions in vapor state rise up the
column passing through holes in distillation trays.
Petrol 70℃
Refinery Gas 25℃
Diesel 260℃
Kerosene 180℃
Naphtha 100℃
Residue oil 350℃
Fuel oil
Lubricating oil 300℃
Liquefied petroleum gas (LPG) for cooking
and heating
Used to make chemicals/feedstock
in petrochemical industry
Jet fuel, paraffin for heating
and lighting
Fuel for trucks, buses,
and cars
Lubricating oils for cars,
waxes, polishes
Fuel for ships,
factories
Bitumen for roads and roofing
Fuel for cars
Fractional Distillation
Column
Crude Oil
Furnace

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❖ Vapor fractions get cool and condense on the
nearest tray as they get below their boiling points
(Condensation).
❑ These trays collect liquid fractions that are drawn out
of the column and piped out.
❖ The lighter fractions such as LPG/Propane of Crude
Oil with the lowest boiling points are collected at
the top of the column.
❖ The final petroleum products from Crude Oil are
then stored on-site until they are distributed to petrol
stations, airports and other markets.
❖ Sulphur is recovered and sold for industrial use.
❖ Nitrogen is converted to ammonia for sale to the
fertilizer industry.
Fractional Distillation
Column

PETROLEUM PRODUCTS
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.
❖ Some hydrocarbon fractions from
Crude Oil such as Naphtha are
used used as feedstock in
petrochemical industry.
❖ A feedstock is a chemical that is
used to make other chemicals.
❖ Naphtha derived from refining of
Crude Oil is used to make
Ethylene (Ethene), a raw material
for production of plastics and
industrial chemicals.

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SUMMARY OF FRACTIONAL DISTILLATION OF CRUDE OIL
Fraction Distilled from Crude
Oil
Boiling Point Range (℃) Carbon chain length Uses
Refinery Gas < 25 1-4
Methane & LPG for cooking
and heating, camping fuel,
feedstock for petrochemicals
Petrol 40 - 100 5-10 Fuel for cars
Naphtha 90 - 150 8-12
Feedstock for Petrochemical
Industry, cracked to make more
petrel and alkenes
Kerosene 150 - 240 11-14
Jet fuel, paraffin for lighting and
heating
Diesel oils 220 - 300 14-20
Fuels for diesel engines: trucks,
buses, trains and some cars
Lubricating Oil 300 - 400 20-50
Lubricating oils for cars, waxes,
polishes and grease
Fuel Oil > 370 20-70 Fuel for ships, factories
Residue Oil > 400 >70
Used for bitumen for road
surfacing and roofing

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CRACKING OF LONG CHAIN HYDROCARBON MOLECULES
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.
❖ Cracking is a thermal Decomposition Reaction that
breakdown longer chain hydrocarbon molecules into shorter
ones.
❖ Longer chain hydrocarbon molecules have high boiling
points and are hard to ignite, thus less useful as fuel.
❖ Shorter chain hydrocarbon molecules are more flammable
and release energy faster than longer chains, thus more
useful as fuel.
❖ This means there is a high demand for shorter chains
products such as petrol, diesel and jet fuel by consumers as
compared to longer chains such as bitumen.
❖ In a refinery, there are several different cracking processes
that use high temperatures (~ 800℃) and and catalysts (e.g.
zeolite) to accomplish the cracking task.
❑ Covalent bonds of Alkanes are very strong that is why high
temperature is needed.
Simple Example of Cracking

REFORMING OF HYDROCARBON MOLECULES
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.
❖ Reforming process takes straight-chain hydrocarbons in the
C6 to C8 rearranges them into molecules containing
benzene rings.
❖ The catalyst used is usually platinum at the temperature of
(~ 500℃ ) and pressure of 20 atm.
❖ Aromatic hydrocarbons have higher octane number than
straight chain-hydrocarbons.
❑ The octane number of a hydrocarbon is a measure of its
resistance to auto-ignition (which causes knocking in a
car engine).
❖ Catalytic reforming converts the low octane straight chain
hydrocarbons into high octane aromatic hydrocarbons.
❑ Used to increase an octane rating of gasoline/petrol.

TRANSPORTATION OF CRUDE OIL
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❖ Once the Crude Oil has been produced from the Earth’s subsurface through wells, It must be transported from
the wells to the temporal designated storage or depot and refinery.
❖ The movement of Crude Oil is made easy using number of different mode of transportation such as:
❑ Pipelines (above ground, underground pipelines and underwater pipelines)
❑ Marine Tankers (majority of the world’s Crude Oil is transported by Marine Tankers)
❑ Railroad tank cars
❑ Tanker Trucks
❖ The transportation of Crude Oil is part of the midstream sector.
❖ After refining, petroleum products such petrol and diesel are also transported to the distribution terminals by
pipelines, tankers, rail cars and tanker trucks.
❖ Crude Oil is transported twice throughout the supply chain, as raw and refined.
❑ From wells/Oil Fields to the refineries (midstream)
❑ From Crude Oil refineries to the markets (downstream, sale and marketing)

TRANSPORTATION OF CRUDE OIL
2196 Tel: +27 (0) 60 466 0406
49
❖ In majority cases, pipelines and marine tankers are preferred means of Crude Oil (and petroleum products)
transportation.
❑ Pipelines can transport a very large amount of Crude Oil to very long distances.
❑ Pipelines are the most economic, efficient method for transportation of Crude Oil and petroleum products.
❑ Marine Tankers carries liquid cargoes in bulk and are responsible for transporting most of the world’s energy.
needs.
❑ Marine tankers transport Crude Oil from producing areas such as the Middle East and Africa in consumer areas
such as Europe, China, Japan and the United States.
❑ Generally, large tankers carry Crude Oil and small tankers carry refined petroleum products such as Petrol and
Diesel and Liquefied Petroleum Gas (LPG).
❖ Many petroleum products travel from the refineries to markets by tank trucks and railroad cars.
❑ Tank trucks deliver Petrol and Diesel to petrol stations, airports and other markets.

2196 Tel: +27 (0) 60 466 0406
50

2196 Tel: +27 (0) 60 466 0406
51

2196 Tel: +27 (0) 60 466 0406
52
TANK FARM ( PORT HARCOUT, RIVER STATE, NIGERIA)

THANK YOU
Address: 601 The Lineal, 24 Fredman Drive, Sandown, Sandton 2196 Tel: +27 (0) 60
466 0406 53

Introduction to oil and gas industry

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