Oil and Gas Handbook


Introduction to Oil and Gas


Chapter 1:

This book has been written with the potential investor in mind. The purpose of this material is to educate anyone who is interested in learning about oil and gas exploration and production. This book contains valuable information on oil and gas geology, exploration techniqiues, drilling and completion of wells, the rights of lease holders, and evaluation of returns before investing in an oil or gas project.

This book is intended to give you the fundamental information necessary to make informed decisions whenever considering investment into an oil and/or gas project.

As long as humans exist, we will have a need for energy. Even in a down economy, there is an ever increasing energy consumption. Energy is simply something we can't do without.

Energy is not an option. Fossil fuels supply over 86% of the world's energy. An abundant supply of oil and natural gas remains vital in helping us and the industrialized countries of the world maintain and establish a way of life.


Demand: Non-OECD

Oil consumption in developing countries that are not part of the Organization of Economic Cooperation and Development (OECD) has risen sharply in recent years. While oil consumption in the OECD countries declined between 2000 and 2010, non-OECD oil consumption increased more than 40 percent. China, India, and Saudi Arabia had the largest growth in oil consumption among the countries in the non-OECD during this period.

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Rising oil consumption reflects rapid economic growth in these countries. Current and expected levels of economic growth heavily influence global oil demand and oil prices. Commercial and personal transportation activities, in particular, require large amounts of oil and are directly tied to economic conditions. Many manufacturing processes consume oil as fuel or use it as feedstock, and in some non-OECD countries, oil remains an important fuel for power generation. Because of these uses, oil prices tend to rise when economic activity and in turn oil demand is growing strongly. Many non-OECD countries are also experiencing rapid growth in population, which is an additional factor supporting strong oil consumption growth.