Disruptors and Their Combustibles

5 Turning Points in Oil & Gas

The geological “kitchens” where oil and gas is cooked up are distinctive places where temperature and pressures have cooked organic matter into hydrocarbon fuels lying beneath a low permeability seal. The task for humans is to find a kitchen and to get to it: in popular imagination coming into it from through the ceiling, so to speak, though horizontal drilling allows us to enter through the front door.

There is a fascinating history to the way this is done, to the geology and technology behind oil and gas exploration. Today, we’ll look at five of the major turning points in this history over the last century.

A Markedly Better Drill Bit

In 1924 Howard Hughes Sr., founder of the Hughes Tool Company, passed away, leaving most of the equity in the company to his son, Howard Hughes Jr.

Junior soon bought out the shares of the other family members and began a period of expansion, famously bringing Hughes Tool into the aviation and motion picture industries.

But the core of the business, drilling tools, was not allowed to stagnate. And this was a good thing for oil and gas, because in 1933 it was Hughes Tool that came out with the Tricone Roller Cone Drill Bit.

This three-cone design cut through rock more efficiently than any precursor design, with a minimal wear on the cutting surfaces. The bit cones would roll along the bottom of the hole in a circle, their teeth crushing the rock and lifting the chips out of the bottom. The process of chipping the rocks and of removing those chips, with jets of high-velocity fluid coming out of nozzles located between the cones, was to be a continuous one. The way the teeth intermeshed on the cones would make the drill, in a sense, self-cleaning.

These tricones proved a vast improvement over earlier systems, including the two-cone roller bits. (And, yes, four cone bits are also sometimes used, but more is not necessarily better). This basic design from the 1930s remains in common use today.

Offshore Drilling

Though there had been earlier experiments in drilling into the seabed, the beginning of a commercially viable offshore industry, its real take-off, had to wait for 1949, and development of the first offshore mobile drilling platform, known as the Breton Rig 20. That name is derived from the Breton Sound area, in the Gulf of Mexico off eastern Louisiana.

This structure is also sometimes known as the Hayward-Barnsdall rig, because it was the design of John T. Hayward, an Englishman working with the Barnsdall Refining Co. at the time. It was designed, and is still used, for shallow waters, of up to 20 feet from the seabed

Hayward suggested mounting one barge on top of another, separating the two with an air gap of between 10 and 15 feet, then ballasting the lower barge, keeping it on the sea floor, and mounting the mast above the upper one. This “submersible” design was spectacularly successful.

Drillers weren’t satisfied, though, with the shallower and sheltered waters for which this worked. And as offshore drilling came to mean something further and deeper, progress was made by working from Harward’s start. For example, Kerr-McGee built the Rig 46 in 1956, with large cylinders at each of the corners. It could drill in water of up to 70 feet.

In 1961 the Blue Water Drilling Company discovered that it didn’t have to rest its submersible platform on the sea bed at all. It could use the platform in floating mode. The “semi-submersible” was born.

Oil Sands Production 

The oil sands, or tar sands, of Canada, are nearly unique. The like are found only in a small number of other places on the planet, [Venezuela and perhaps the Republic of the Congo]. These sands are a dry-land resource that, for a long time, did not seem very promising as a commercial matter. The crucial stuff, bitumen, had to be extracted from the sand and then it had to be rendered malleable itself.

The National Energy Board of Canada has defined bitumen, as “a highly viscous mixture of hydrocarbons … which, in its natural state, is not usually recoverable at a commercial rate through a well because it is too thick to flow.”

The work involved in the extraction of bitumen or in overcoming its viscosity are not matters of great complexity. But they are expensive, and prior to the energy crises of the 1970s it remained a matter of speculation whether this work and expense would ever be worthwhile.

Still, it was in advance of those crises, in 1967, that commercial production got underway at the Athabasca Oil Sands, in Alberta, Canada, a region centered around Fort McMurray. This was the world’s first operational oil sands project, run by a subsidiary of the U.S. company Sun Oil which adopted a boastful-seeming but accurate name, the Great Canadian Oil Sands Ltd.

Nobody really understood the true scale of the Canadian oil sands deposits until more than a decade later, when the Syncrude mine opened in 1978. Both the Sun (now the Suncor) mine and the Syncrude mine were expanded at the turn of the 21st century. New mines have been added, and the government of Alberta now expects that by 2020 production could reach 560 thousand cubic meters a day.

Borehole imaging 

In the late 1960s Mobil Corp. began using “borehole televiewers,” offering 360 degree coverage of the borehole wall through acoustic imaging. The technology caught on and has as one might expect become a good deal more sophisticated in the intervening decades.

This imaging is available for either open or cased holes.

Its value is in determining the condition of the borehole, and stress on the drill bit, as well as the porosity of and fractures in the surrounding rock.

Sonic imaging has been complemented in recent years by microresistivity imaging, which can be more detailed than its acoustic counterpart. (The drawback to microresistivity, though, is that coverage degrades as borehole size increases.)

Shale and the Fracking Revolution

In 1997 an ad hoc arrangement of mostly familiar elements put together by petroleum engineer Nick Steinsberger, of Mitchell Gas, enabled the extraction of gas from the Barnett Shale at a commercially viable cost, at a well called S.H. Griffin #4.

Headline writers may work with the idea that Steinsberger invented hydraulic fracturing, or the “fracking revolution,” that year. But fracking was old hat, the term simply meant and means that the force of water opens cracks in shale. Horizontal drilling, with which fracking is often combined, was also old hat. The breakthrough for Mitchell Gas was the move to “slickwater” fracturing. That is, Steinsberger opted to have the hydraulic work accomplished by a combination of water, sand, and a botanical gelling agent. As the water opens up cracks, the sand and gell keep them open past the point when gravity might otherwise have closed them.

After much trying this was (as Gary Sernovitz has put it) “a fracking technique that finally worked,” which would become “a signal event in the history of the [gas and] oil business.”

And that is how Mitchell Gas defied convention and changed the world hydrocarbons markets.



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