Oilscouts.org – Defining The Petroleum Industry

The oil and petroleum industry has long been a boon to society, positively providing and sustaining the continually growing need for heat and power supply. On the other hand, the demand for more mineral sources is increasing, along with their prices. Thus today you will find that various oil companies are enthusiastically scouting the land for potential mineral deposits. Here are a few tips on how you should go about the technicalities and legalities of leasing your land for the study and exploration of oil company scouts.

First and foremost, expect to have a seismic survey performed on your land. If the result points to a possibility of oil deposits, the interested oil company will approach you and ask to lease your land for mineral rights.

Seek professional advice and guidance. In whatever type of business transaction, never go without a reputable and well-seasoned lawyer. He will be able to assist you in extra negotiations regarding your rights on the land, including considerations on possible irreparable damages on your land.

With a lawyer at hand, you may now feel confident in the negotiation of royalty agreement in your favor. If you think that your land does not really have mineral deposits underneath, then smartly choose to take a larger initial payment with a smaller oil revenue percentage. On the other hand, if you feel strongly that your land does have mineral deposits somewhere underneath, do opt for a smaller payment upfront but higher royalty payments in the future.

A smart lawyer should advise that you specify in your contract the depth of land to be leased. This is to broaden your leasing horizons; in the future another oil company may approach you for further oil exploration and you can lease the land beyond the depth you have already leased.

The oil industry is reaching its peak, enthusing investors and businessmen to indulge in the oil business. The prices of oil and other power-generating minerals continue to soar high in the international market. This continuous price hike is prompting ambitious businessmen to switch sides and join the oil industry masters instead of being controlled by and dominated by them. If you’re one for being master and not slave of this oil predicament, then you might as well think about starting up your very own oil and gas company. Here are a couple of things you must consider. Read on.

Know your funding options. Before anything else, starting up an oil and gas company requires quite a huge sum of capital. Expect your financial resources and reserves to be devastated if you truly wish to enter the oil business arena. Personal life savings and financial aid from friends and family offer the least hassle form of financing as opposed to the more complex funding strategies such as private investments. On the other hand, these may not be sufficient in jump starting oil business since entrance into the oil industry generally require a huge sum of money. Therefore be financially prepared and morally prepared to take the gamble and whatever consequences that will come along with it. You should wisely consider turning to private investments and loaning agencies for sufficient funding.

Seek professional and legal assistance. As with any business endeavor, hiring a trustworthy and reputable lawyer is most practical and convenient especially when dealing with such huge amounts of capital to be spent. A legal consultant should be able to assist you all the way, from determining your funding options to closing transactions.

Simply secure these two main requirements— sufficient starting capital and a well-seasoned lawyer—and you’re on a sure path to starting your very own oil company.

The oil industry is fast becoming a most in-demand international business today. Sustenance and maintenance of the power supply are a general concern of all nation leaders across the globe. This constant dilemma and fear of diminishing oil reserves is thus firing up many ambitious businessmen to start up their own oil companies.

Now before a person can start an oil company, he should first seek out land that has rich oil and mineral reserves. Be warned that this lucrative mineral hunt will require a great deal of money to start with. The aspiring oil hunter will have to have sufficient facilities, equipment and manpower—all of which will require a huge starting capital. But before getting into the details of running an oil company once established, he should first lease potentially mineral-rich properties for exploration. He should have the legal assistance of a financial adviser or a lawyer for a lease contract that will work for the best interests of both parties—the owner and the lessee. He should have sufficient money to spend for this risky expedition, as well as strong guts to face the gamble.

On the part of the property owner who is leasing out his land for oil exploration, he gains potentially great benefits if and when oil and mineral deposits are found on his land. He will enjoy royalty payment from the company once the mineral deposits are liquidated. Even before that, he will also receive an initial payment for the lease. He has two choices in his contract: Either he agrees to receive a huge initial payment in a lump sum but with less oil revenue percentage in the future; or he may choose to take a smaller payment upfront but with larger royalty in the future. He should choose the latter if he thinks oil reserves do exist in his property.

When one speaks of crude oil, or petroleum, one may imagine this particular image in mind: a drilling platform or vast dry land with a big black fountain of oil. And from that crude oil, comes different products ranging from the clear petroleum that is used to fuel cars, or to black tires, to plastics, and even crayons. From the crudeness of the oil that gushes out of the earth, oil mining companies refine the oil so that it could be used for different purposes.

To understand the fining process, one must first grasp the multitude of the different hydrocarbons (compounds of carbon and hydrogen which contain a lot of energy) present in crude oil. The most basic of these hydrocarbons is methane, CH4. And the number of carbons in a compound could increase. The compounds may be either straight or branched compounds (such as paraffin: propane, isobutane, hexane) or in a cyclic ring (naphthenes, benzene).

All these hydrocarbons have different boiling points. Therefore it is possible to separate these compounds by the process of distillation – at different temperatures a hydrocarbon of a certain type and length boils and evaporates, and then is condensed separately. Hence, this process wherein the hydrocarbons in the mixture of crude oil are segregated by their boiling points, called fractional distillation, is where it all begins.

Petroleum gas, or known commonly as the compounds methane, ethane, propane and butane have a boiling point less than 40 degrees Celsius (104˚ F). Naptha or ligroin boils at around 60˚to 100˚ C (140˚ to 212˚ F); and these intermediates are further refined into gasoline (a mix of alkanes and cycloalkanes with a boiling range of 40˚ to 205˚C/104˚ to 401˚ F). Kerosene (175˚ to 325˚ C/350˚ to 617˚ F), diesel distillate (250˚ to 350˚ C/482˚ to 662˚ F), lubricating oil (300˚ to 370˚ C/572˚ to 700˚ F) and industrial oil (370˚ to 600˚ C/700˚ to 112˚ F) feature increasing boiling temperature ranges. Finally, residuals such as tar, asphalt, coke and waxes melt at temperatures higher than 600˚ C/1112˚ F.

Fractional distillation starts with heating the crude oil mixture to temperatures around 600˚ C. Most of the substances boil and evaporate. The vapours pass through the fractional distillation column which contains different trays or plates arranged in different levels that correspond to the different boiling points of the hydrocarbons. When a vapour reaches a certain plate which corresponds its boiling temperature, it cools and condenses (those with low boiling points will condense high up in the column where it is cooler and those with high boiling points turn liquid at the lower part of the column). The trays collect the different liquid fractions for further processing and refinement.

In the previous article fractional distillation has been discussed. It again utilizes the different boiling points of the components of crude oil, enabling their separation through distillation. These fractions are then collected for further processing and refinement. One must take note that fractional distillation is an efficient but an imperfect process – the isolated compounds may contain not only one pure substance, or could contain a substance with various other impurities combined; hence they require further treatment. Also, one could process the other products and convert them into other hydrocarbons depending on need (converting diesel to gasoline). Chemical processing achieves all these other goals.

In chemical processing, a refinery could combine small hydrocarbons and transform them into a longer or larger hydrocarbon chain, also known as unification. The major step is catalytic reforming wherein a platinum or platinum-rhenium mixture speeds up the aggregation of smaller hydrocarbons into larger ones (for example, naphtha into aromatics). Hydrogen gas belongs to the significant products that are produced by this process.

A long hydrocarbon chain subsequently could be broken down into smaller hydrocarbon components, termed cracking. Cracking may be done thermally (for example, by steam: this breaks down ethane, butane and naphtha converting them into ethylene and benzene), or by speeding the breakdown through catalysis as well (using aluminum hydrosilicate, bauxite, or alumina-silica).

And in a certain fraction the hydrocarbons could be reformed to become another type of hydrocarbon, and this processed is called alteration. One of the processes is alkylation (technically an formation of another bond in double-bonded hydrocarbons making them a triple bond) – the mix of butylene and propylene in the presence of hydrofluoric or sulphuric acid yields alkynes that are hydrocarbons with high octane ratings, and hence blended into gasoline mixtures.

Impurities, such as water, metals, inorganic salts and compounds of sulphur and nitrogen, are removed via treatment using an absorption column (for water), sulphuric acid column (unsaturated hydrocarbons) and hydrogen sulphide scrubbers among others.

Treated fractions could be then fractionally distilled to yield separate compounds. All these chemical processes are done in refineries, as well as fractional distillation, to deliver the needed petroleum products.

Have you ever wondered what the octane rating in your gasoline is for?

To understand the concept of the octane rating, one must go back to the premise that most cars nowadays run using a four-stroke gasoline engine. One of the fuel combustion in engines is compression – and there is a certain degree of compression that can be achieved with for gasoline before it spontaneously ignites. What must ignite the gasoline is the spark from the spark plug. If the gasoline spontaneously burns once it is compressed (and not yet ignited by the spark plug) – knocking of the engine occurs, and this consequence damages the car engine.

The octane rating of a gasoline dictates the degree of compression of the fuel product before it spontaneously ignites. The term octane rating is derived from the fact that the eight-carbon compound octane tolerates compression well, compared to heptane, the seven-carbon fuel which spontaneously ignites upon compression. The regular 87 octane rating gasoline handles only minimal compression and is either a 87% octane and 13% heptane blend or another mixture of hydrocarbons which achieve the same octane performance rating of 87 as with the 87%/13% octane-heptane blend.

And in some cars, to improve the horsepower, they improve the compression ratio of the engine (the amount of compression before the spark ignition) and these engines require higher octane rating fuels – hence the term “high performance engine”.

During the First World War, the addition of the compound tetraethyl lead to gasoline greatly improved its octane rating. However the lead clogs the catalytic converter of an engine, destroys it in minutes and as a result a noxious amount of lead is released from the engine along with other toxic substances that should have been neutralized by the catalytic converter. Because lead in the environment is a health threat, they banned the use of tetraethyl lead, raising gasoline prices.

Now there is unleaded gasoline with good octane ratings, as well as gasoline blended with high octane rating compounds derived from chemical processing.