Core Knowledge of Exploration and Development

I. Upstream: Core Knowledge of Exploration and Development

1. Fundamentals of Petroleum Geology

• Three Elements of Hydrocarbon Accumulation: Hydrocarbon generation (organic-rich source rocks), reservoir storage (pore/fracture-type reservoirs), trap (structural/lithological/stratigraphic barriers), supplemented by cap rocks and migration pathways.
• Classification of Oil & Gas Reservoirs: Structural (anticline/fault), lithological (sandstone/carbonate rock), stratigraphic unconformity, and composite oil & gas reservoirs.
• Core Indicators: API gravity (light oil > 31.1°, medium oil 22.3°–31.1°, heavy oil < 22.3°); sulfur content (low-sulfur < 0.5%, medium-sulfur 0.5%–2.0%, high-sulfur > 2.0%); viscosity (affecting production and transportation).

2. Key Exploration and Development Technologies

II. Midstream: Core Knowledge of Storage, Transportation and Gathering

1. Oil & Gas Gathering and Transportation

• Process: Wellhead produced fluid → oil-gas-water separation → metering → treatment (dehydration/degasification/desulfurization) → export. Key equipment includes three-phase separators and dehydrators.
• Technical Points: "Three-high" crude oil (high sulfur, high pour point, high viscosity) requires heating, chemical injection, or dilution for transportation to reduce flow resistance.

2. Storage and Transportation Methods & Safety

• Pipeline Transportation: Mainstay for long-distance transportation, with pressure ranging from 10–14 MPa. Materials are mostly API 5L X65/X70 steel, requiring integrity management and corrosion protection.
• Oil Tankers: Mainstay for ocean transportation, classified into VLCC (Very Large Crude Carrier, > 200,000 DWT), Suezmax, Aframax, etc., adapted to different routes and ports.
• Storage: Above-ground tanks (floating-roof tanks/fixed-roof tanks) and underground salt caverns/gas storage facilities, used for peak shaving and emergency supply guarantee.

• III. Downstream: Core Knowledge of Refining, Chemicals and Products

  1. Three Stages of Refining & Chemical Processes

  Stage	Core Processes	Products & Functions
  Primary Processing	Atmospheric and Vacuum Distillation	Fractionates naphtha, gasoline, diesel, gas oil, and residue; regarded as the "leader" of oil refining
  Secondary Processing	Catalytic Cracking/Hydrocracking/Catalytic Reforming	Converts heavy oil into light products, increases yield of gasoline/diesel/aromatics, and reduces sulfur and nitrogen impurities
  Tertiary Processing	Alkylation/Isomerization/Delayed Coking	Produces high-octane gasoline components, petroleum coke, needle coke; expands sources of chemical raw materials

  2. Core Products & Indicators

  • Fuel Products: Gasoline (octane number, China VI standard ≥ 92/95/98); diesel (cetane number, affecting combustion stability); jet fuel (low-temperature fluidity and calorific value).
  • Chemical Raw Materials: Naphtha (feedstock for ethylene/propylene); aromatics (benzene/toluene/xylene, used in chemical fiber/plastics/rubber); asphalt/petroleum coke (used in infrastructure/aluminum electrolysis).

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  IV. Market, Trade and Green Transition

  1. Pricing and Trade

  • Benchmark Crude Oil Prices: Brent (North Sea, global benchmark), WTI (Cushing, USA, North American benchmark), Shanghai Crude Oil Futures (SC, pricing reference for Asia-Pacific region). Unit is commonly US dollars per barrel (1 barrel ≈ 159 liters, 1 ton ≈ 7.33 barrels).
  • Trade Models: Long-term Supply Purchase Agreements (SPA), spot trading, futures hedging. Oil dollar and OPEC+ production cut/increase policies significantly impact prices.

  2. Green Low-Carbon Technology Trends

  • Carbon Capture, Utilization and Storage (CCUS): Dagang Oilfield built China's first oilfield with annual carbon injection capacity of 1 million tons, applied for EOR in mature oilfields and emission reduction.
  • Molecular Refining: Precisely regulates oil components, improves yield of light oil and chemical raw materials, and reduces energy consumption and emissions.
  • New Energy Integration: "Geothermal +" coupling systems, wind-solar power supporting oil & gas production, promoting energy consumption transition.

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  V. Core Terminology Glossary (High-Frequency)

  1. Porosity/Permeability: Indicators of reservoir storage and seepage capacity; reservoirs with permeability < 1 mD are classified as low-permeability reservoirs.
  2. Refining Margin: Price of refined products minus crude oil cost, reflecting profitability of refining and chemical business.
  3. Recovery Factor: Ratio of produced crude oil volume to original oil-in-place; conventional water flooding achieves about 30%–40%, and EOR can increase it to over 50%.
  4. Pipeline Integrity Management: Whole-life cycle risk assessment, inspection, maintenance and emergency repair to ensure safe pipeline operation.