Drilling for Oil

To identify a prospective site for oil production, companies use a variety of techniques, including core sampling -- physically removing and testing a cross section of the rock -- and seismic testing, where the return vibrations from a man-made shockwave are measured and calibrated.  Advances in technology have made huge improvements in seismic testing.

After these exploratory tests, companies must then drill to confirm the presence of oil or gas.  A "dry hole" is an unsuccessful well, one where the drilling did not find oil or gas, or not enough to be economically worth producing.   A successful well may contain either oil or gas, and often both, because the gas is dissolved in the oil.  When gas is present in oil, it is extracted from the liquid at the surface in a process separate from oil production.

Historically, drilling a "wildcat" well, searching for oil in a field where it had not yet been discovered, had a low chance of success.  Only one out of five wildcat wells found oil or gas.  The rest were dry holes.  Better information, especially from seismic technology, has improved the success rate to one out of three and, according to some, one in two. 

After a successful well identifies the presence of oil and/or gas, additional wells are drilled to test the production conditions and determine the boundaries of the reservoir.  Finally, production, or "development," wells are put in place, along with tanks, pipelines and gas processing plants, so the oil can be produced, moved to markets and sold.   Once extracted, the crude oil must be refined into usable products, as discussed later.

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