The phases of developing an oil field project

Oil fields – they’re big, they’re expensive and they’re a vital part of the global economy. Developing an oil field is no small task, which is why it’s broken down into manageable stages. While the specific type of oil field differs according to its physical location in the world, each field goes through the same stages, and there are specific personnel responsible for each stage. These personnel have highly specialised skillsets, which makes finding the right person for the job challenging. Depending on the location of the oil field, each stage will differ for time to completion, cost and difficulty. The goal is always speed and efficiency, with every second wasted a dollar lost. So, let’s dive into all of the stages of an oil field.

Phase 1. Exploration and appraisal

Illustration of a the exploration and appraisal stage of an oil field

This stage involves exploring potential sites for drilling, conducting the drilling once a suitable site is found and taking measurements. Geologists, Geophysicists and reservoir engineers make use of advanced methods and technologies to explore potential sites and scout for oil reservoirs under the earth and in the ocean. These include:

Geological analysis
Seismic analysis
Gravity and magnetic surveys
Remote sensing and satellite imagery
Data integration
Geochemical analysis
Exploration wells
Computer modelling

In the measurement phase, extensive analysis is conducted on the potential reservoir candidates. This includes scrutinising their geological properties, gathering comprehensive data sets, monitoring equipment performance, analysing fluid compositions and assessing the surrounding environment. Personnel who contribute to these measurements include reservoir engineers, production technicians, geologists, petroleum engineers, environmental specialists, safety engineers and data analysts. Their combined expertise ensures that potential drilling sites are accurately evaluated to give stakeholders all the information they need to make a decision.

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Phase 2. Feasibility studies and conceptual design

During this phase, the oil field’s feasibility is assessed, the potential yield and costs are estimated, and detailed documents are created to guide investment decisions for stakeholders. Feasibility studies involves estimating the potential yield of an oil field, figuring out the cost of production and conducting a conceptual analysis. Geophysicists and petroleum engineers work to determine the potential yield, whereas the cost of production is estimated by the petroleum engineers and production engineers.

Illustration of the frontend engineering stage of an oil field

Phase 3. Frontend engineering

Conceptual design involves FEED (frontend engineering and design), encompassing technical specifications, processes, equipment, materials and cost estimates. FEED tasks include creating high-quality process and engineering documents that outline project requirements for engineering, procurement, and construction stages. These documents also aid in making investment decisions for further project development, providing an estimated project cost accuracy of around 15%.

Illustration of a the detailed design and procurement stage of an oil field

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Phase 4. Detailed design and procurement

The foundation for the entire project is laid during this stage, which is overseen by the project manager. Detailed engineering plans are drafted by an engineering team and the essential resources needed to build the oil rig are determined and planned by the procurement team.

The detailed engineering designs include specific technical specifications, layouts and configurations. Procuring the required materials, equipment, and services in this stage is essential for the upcoming construction phase.

This entails choosing vendors based on their cost-effectiveness, quality assurance and dependability. Formal contracts are written up to outline the roles, responsibilities and deliverables of all the involved parties. The logistics team ensures that transportation is on time and the deliveries go well. Quality checks are conducted to confirm the delivered materials and equipment are up to standard.

Throughout this phase, risk assessment and management strategies are in place to prevent potential disruptions in the supply chain. Costs are monitored during this stage to make sure they stay within the allocated budget, and an eye is kept on the timeline to make sure everything is running smoothly. Detailed documents are maintained, recording the procurement process.

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Illustration of a the construction and inspection stage of an oil field

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Phase 5. Construction and inspection

The construction and inspection stage involves actually building the designs from the previous stages. Here, skilled labourers, guided by engineers and overseen by project managers, translate the engineering blueprints into tangible structures and operational systems. Earthwork operations are conducted to create stable well pads, providing a solid base for drilling equipment and ensuring safety.

After this, wellheads are installed, where workers connect wells to the surface infrastructure to regulate the flow of resources. Storage tanks are also built, varying in size and design to accommodate the field's production capacity, and serving as repositories for the extracted oil and gas. Welders, masons, and machine operators collaborate alongside civil and mechanical engineers.

Sticking to established quality standards is pivotal, with inspectors constantly verifying that construction aligns with design specifications and industry regulations. Safety supervisors ensure safety compliance, prioritising the well-being of workers and the environment by identifying and mitigating potential risks.

Project managers keep an eye on the overall progress, while document controllers record construction advancements for evaluation. Rigorous testing and commissioning are carried out by technicians to assess the performance and dependability of systems and equipment. Compliance officers ensure compliance with regulatory and environmental regulations, and an inspector performs a comprehensive review at the end of the phase before moving on to installation and commissioning.

Illustration of a the installation and commissioning stage of an oil field

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Phase 6. Installation and commissioning

During the installation and commissioning stage, the primary focus is on setting up the essential machinery and equipment necessary for the extraction and production of oil and gas. Project engineers oversee the phase and mechanical engineers manage installation, where key components are carefully put in place, including drilling rigs, which are positioned to penetrate the Earth's surface and reach underground oil and gas reservoirs, and pumping systems, which transport oil and gas to the surface for further processing.

Important processing equipment, such as separators and heaters, are also setup to process the raw materials, and storage tanks placed to hold the extracted oil and gas until they are ready for transport. Pipelines are also installed to build the distribution network to refineries and distribution points. Following installation is the commissioning phase. Technicians conduct functional testing on the machinery and each component to ensure they will function properly. Special attention is given to pipelines, tanks and other vital structures to prevent potential leaks or failures. Simulation engineers run simulations to replicate potential scenarios and plan contingencies.

Illustration of a the production and maintenance stage of an oil field

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Phase 7. Production and maintenance

The production and maintenance stage is pivotal, and when the oil and gas is finally produced and measures are put in place to sustain their production over time. During production, the oil field’s designed systems, structures and processes are put to practical use.

This involves the regular operation of equipment, systems, or facilities to extract and process oil. The focus is on maximising efficiency and output while sticking to quality and safety standards. Production operators oversee the day-to-day running of the equipment and systems involved in extraction and processing, while process engineers are responsible for fine-tuning and optimising operational processes.

Maintenance engineers keep an eye on the health of equipment and machinery, and execute regular maintenance activities, conduct scheduled inspections, carry out repairs and replace components when necessary to prevent wear and tear, malfunctions and breakdowns. Key performance metrics are monitored throughout the stage, with data analysts and engineers analysing data to assess performance, identify trends, and find areas for improvement.

Illustration of a the decommissioning and abandonment stage of an oil field

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Phase 8. Decommissioning and abandonment

The decommissioning and abandonment stage marks the final chapter in an oil field’s lifecycle, involving the dismantling, closure and proper handling of the oil field’s equipment, assets and facilities. Personnel, including engineers, technicians, and environmental experts, facilitate disposal and recycling to mitigate waste and potential hazards, staying in line with environmental regulations.

Abandonment involves closing down the field and ensuring that it poses no future risks. Proper site restoration, such as land remediation and removal of any residual contaminants, is undertaken to ensure the site is as compatible as possible with the surrounding environment.

Throughout the stage, clear protocols are followed to negate any potential risks and challenges and ensure health and safety and the protection of the environment. Proper documentation is maintained throughout to meet legal obligations and to serve as a record of the decommissioning process.