UPSTREAM, MIDSTREAM,DOWNSTREAM COMPANIES IN OIL INDUSTRY

Oil industry is divided into upstream, midstream and downstream companies.
Upstream: Companies that are involved in exploration and production of crude oil which mean extracting crude oil from subsurface are called upstream companies. Many national companies and private companies come under this category. They are mainly into  searching for potential underground and under water crude oil and natural gas fields, obtaining permission from the land owners to drill, drilling exploratory wells and then drilling ,conducting geological surveys and operating the wells that recover and bring the crude oil to the surface.
 Midstream companies: These are companies that purchase crude oil from the upstream companies. They further refine it to usable form. They follow the fractional distillation method to produce by products like kerosene, petrol,diesel etc.Refineries come under this category.
Downstream companies: They are involved in the process of purchasing product from midstream companies and sell it to the retailers.Oil marketing companies like Hindustan petroleum and Bharat petroleum come under this category.
Companies that come under the midstream and downstream have started playing the role of both hence categorizing companies is very difficult.Oil and gas courses.
The upstream industry requires huge amount of money to build the structure and maintain it. Maintenance is a fraction of the investment but is expensive. The upstream section involves a lot of risk and is rewarding at the same time. Political instability and seasonal weather patterns affect this sector. This sector is regulated by government and environmental entities. There is a visible change in the technology and hence the oil and gas industry is looking for skilled workers in all fields. The midstream sector doesn’t involve much risk and is a highly regulated segment of the oil and gas industry. Many companies are benefited from the midstream sector because of the different ways oil and gas is processed, transported and stored. Before moving to the downstream process technological companies benefit by trying to find efficient ways to transport and store the oil and gas.
The downstream companies on the other hand are not capital intensive. It deals with huge amount of money in transactions. This sector provides the easiest  connection to the everyday consumers. Some of the products of the downstream sector are Liquefied Petroleum Gas (LPG), Liquefied Natural Gas (LNG), Gasoline,Diesel Oil, Jet Fuel, Heating Oil, Synthetic Rubber, Plastics Lubricants, Fertilizers,   Pesticides etc. This sector plays  a major role in several  other industries because the products  refined and produced are used in many ways. The downstream sector produces plastics  which is used by many of the industries in packing or manufacturing. Natural  gas  of the downstream  plays a major role in the production of fertilizers and pesticides. The farm equipment's also run on the fuel produced in the downstream. Conventional transportation methods such as trucks, boats etc are required for the transportation of processed  natural gas and oil products. The downstream also influences the medical  industry  through the production of pharmaceuticals and medical equipment's. The downstream industry also creates a lot of job opportunities and thus plays a major role in the economy of the country.
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CRUDE OIL

Crude oil is in news right now with OPEC meeting this week. Crude Oil is under pressure on back of statement from Saudi Arabia which says there is unlikely to be consensus for production cuts. Adding to that is news that US Federal Reserve is looking to restrict bank involvement in physical commodities. Saudi Arabia is willing to make concessions in terms of its oil production, if Iran is willing to participate too. Iran has politely declined of holding its production at 3.6 million barrel per day (bpd). OPEC crude producers are preparing to increase production to the world at large. They are Libya and Nigeria. Both countries combined are expected to supply additional 8,00,000 barrels a day which will add more woes to already oversupplied crude oil market. Reduction in demand both in China and India has also contributed crude oil prices to weaken further in the face of near record output from OPEC producers. The International Energy Agency (IEA) has said, “Supply will continue to outpace demand into 2017.”Oil and Gas Courses in Kerala.

Recently crude oil is showing greater sensitivity . Since last month crude oil gained more than 9 per cent when inventory was declining but now with increasing production from Libya and Nigeria plus expectation of no positive deal this OPEC meeting has made crude oil vulnerable and correcting more than 5 per cent in 2 trading session. This year the US summer seasonal weekly inventory change is now running between the 3- and 5-year averages. However inventories haven’t done anything too out of the ordinary this summer even as US production has decreased. US shale production is expected to remain steady as long as crude is between $40 and $60

The production rate of US rigs has reduced since last year from March 2015 till March 2016 because of weak crude oil prices. However because of technological advancement, the scenario is that rig counts have decreased by 50 per cent in a year yet the production has only decreased by 12 per cent. The productivity has doubled in a year and any increase in productivity will be a huge threat to crude oil prices in future. Saudi Arabia now no longer controls the oil market, with US increasing its productivity. The number of active US oil drilling rigs has increased this week. Despite the negative fundamentals, technically crude oil still looks neutral to bullish. Large correction is expected if crude oil breaks below Rs 2850 per barrel. Crude oil is expected to trade in range and any breakout will come above Rs 3,200 or breakdown below Rs 2,850, till then it will be range-bound. Short term support for crude comes at Rs 2945 per barrel which is the trendline drawn from the swing low. It will be frustrating time for traders in crude oil as clear trend will not materialise until crude oil breaks out from the trading range.

Crude oil saw a reduction in prices in Asia thus commodity hitting 11-month highs earlier in the week. The losses were in line with a the sell-off on equities markets from Asia to the Americas led to losses which created a fear about the state of the global economy. The increase in US unemployment numbers, have made oil more expensive and dampening the demand. The new signs of tightening supplies can boost oil futures .If the positive developments we are seeing like the tightening supply (and) increasing demand in the oil sector continue to develop for the next couple of months, then maybe the strengthening US dollar might not have that great impact.

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OIL INDUSTRY

It has been a tumultuous five years for the oil industry.  Back in 2013 the sector was basking in earnings they had not seen since the financial crisis and as prices reached a high of $115 a barrel in the middle of 2014, Big Oil (the world’s largest six or seven publicly traded oil and gas companies) readied itself for another year of bumper profits. But as the cyclical nature of the industry dictates, the good times had to come to an end. By early 2015, only six months after reaching new highs, oil prices had plummeted below the $50 mark and by early 2016 prices had reached the trough at just $30.
Big Oil responded as it always does: by cutting costs and spending. When times get tough the oil industry becomes amazed at how wasteful it has been when oil prices were high, and always manages to find billions in savings when forced to, albeit with a lot of help from the oilfield services industry that has to ride in their wake.  With a sector now fit for business and back in profit, oil prices have continued to climb, reaching $78 in May 2018 (its highest level in over three years) with current prices only lingering just below that.
The current support behind oil prices is largely being driven by concerns over tightening supply in the global oil market. Political instability in both Venezuela and Libya, combined with imminent US sanctions on Iran, threatens as much as two million barrels of daily supplies – equal to over 2% of global daily production. Venezuela’s oil output has already dropped off a cliff, falling by around 700,000 barrels per day over the last year or so, and there are concerns over Libya’s contribution of one million barrels per day due to militia in the country threatening to hand over key oil ports to rivals of the state-owned oil company.
For Iran, the third largest producing country in the Organisation of the Petroleum Exporting Countries (OPEC), contributing about 3.8 million barrels per day, the situation is even more dire. Since the US pulled out of the Iran nuclear deal and warned it would impose new sanctions on the country, it has now been reported that the US is pressuring its allies to stop all imports of crude from Iran by November, which would be a much tougher stance than many first expected. With such a large amount of OPEC’s 32.4 million barrels of daily output under threat, the organisation’s leader, Saudi Arabia, and non-OPEC member but now close partner Russia have agreed to take action to plug the gap. Following the most recent meeting, the pair announced the organisation had agreed to raise daily output by one million barrels per day. Importantly, both Saudi Arabia and Russia are looking to add the majority of that bump-up in production, helping them to steal market share from other countries. However, Iran has claimed that no other member outside of Saudi Arabia or Russia had been given the go-ahead to turn on the taps, and has said that this will see a much smaller rise in OPEC production, of around 500,000 barrels daily. While Saudi Arabia is by far OPEC’s largest producer and willing to leverage its own excess capacity to get its point across to the market, there are concerns that it does not have as much as capacity as is needed.
Although OPEC only accounts for about one-third of global production, it is the closest thing there is to a central bank for the oil industry, tasked with balancing supply and demand and steering prices. This was especially true ten years ago, when the US was solely reliant on importing oil and producing just three million barrels per day. But the take-off of US shale has revolutionised the country’s energy production industry and pushed the US’s daily output to over eight million barrels per day in January 2018.In fact, the US will produce more energy than it needs within the next decade.This will make the US an energy exporter and rebalancing the relationship between the country and OPEC after decades of being heavily reliant on energy imports, albeit mostly from Canada but also from member nations. So, if the US has a growing oil industry and is slowly becoming less reliant on imports, why does it still rely on OPEC to manage the market and why does it want lower prices?
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WELDING ENGINEERING

Welding engineering covers  topics such as joint design, weld preparations and welding positions.Welding procedures are documents used by the welding engineer to guide the welder in the choice of consumable and welding conditions.They also carry other valuable information such as when preheating is required.
Many standards and classifications are used by the welding industry, but are they easy to understand? For example, MMA electrode manufactures and suppliers quote electrodes as being types E7018 but what does this mean? In fact, the numbers give an indication of the strength of the weld metal which will be deposited by the electrode and the type of coating the electrode has.When a weld is produced both the welding conditions used and the composition of the shielding gas can have a significant affect on the metallurgy.When welding stainless steels, carbon can be added to the weld metal through the decomposition of carbon dioxide used in the shielding gas.If too much carbon is added then this can affect the corrosion properties of the stainless steel.While calculating the welding cost following factors are considered :power consumed,consumable used,labor cost and gas cost.

Heat treatment

Heat treatment is often associated with increasing the strength of a material. There is a range of different heat treatments employed on materials before, during and after welding takes place.  Preheating is a method used to prevent hydrogen cracking taking place.  Heat treating a material can also be a method of reducing or removing stress which may have built up in a component either through forming or welding. It can be used to improve formability, restore ductility and to recover the grain size.It is usually done for  hardening,softening and property modification.Hardening heat treatment is suitable for steels.It is done for improving the  mechanical properties of steel.Sufficient carbon or alloy content is required for hardening.
Hardfacing involves one of two techniques: build-up or overlay. Based on the equipment needs, some may want to use a combination of both. The combination of the two techniques can be completed repeatedly provided that the part or equipment still remains sound.
The build-up technique  returns older equipment back to its original dimensions after it has been worn . The overlay technique adds a layer of protective filler metal deposits to protect against metal loss.
Hardfacing the teeth of digger buckets is carried out to improve the wear resistance of these components.Cladding of the internal surfaces of a vessel with stainless steel panels can mean that the structural parts of the vessel can be made out of a material which is cheaper, but the overall corrosion resistance and working life is not compromised.
Weld testing can be divided into two main areas; destructive and non-destructive testing methods.
In destructive testing, the sample of material or weld is snapped, broken and pulled apart by numerous techniques to gather data regarding the strength, toughness and hardness of the component.With non-destructive testing, as the name suggests, no physical damage occurs to the component.Techniques such as visual inspection, x-ray and ultrasonic testing are some of the most commonly used methods.
Welding and cutting defects:Welding and cutting defects do occur, even when care is taken to try and avoid them.  Understanding the main cause of these defects  is of fundamental importance in ensuring that the defects do not arise

OIL AND GAS INDUSTRY

The oil and gas industry is very vast and there are different career options available.  Oil and gas industry consists of hundreds of contractors and sub-contractors, with different types of work split .Even the pipe installation to cleaning is contracted separately – and every area demands entry-level workers who can learn fast. To start an occupation in the mining, oil, and gas industry some requirements are general for most workers; others are specific to occupations .As the jobs don’t require special education, there is hardly a shortage of available labour.  The job vacancies are usually been handled by third-party recruiting firm. The oil and gas companies outsource hiring decisions to trusted partners. One month of work experience in the industry or an internship helps opens doors for a wide variety of opportunities. Large companies have constant job openings which needs filling. Apprenticeships have also become more common. Attending internships in the college is also important for engineering students who hope to start a career in mining, oil, and gas. There are several coaching centres providing training for the same.



The oil and gas extraction depend on drillers to reach resources deep in the earth.  The latest drilling techniques often involve drilling down vertically and then drilling horizontally or in other directions .Drillers have to operate a variety of drills. They need to select the proper drill and drill bits to use and attach additional drill bits, rods, and pipes as the drill reaches deep in the earth. The workers have to keep a track of the drill’s pressure and speed. They monitor critical information, such as the pressure in a well or how much debris is being pumped out. And they keep records of the place where they have drilled, how deep they have gone, and the nature of the layers they have penetrated. The mining workers operate continuous miners, self-propelled machines that extract coal, rock, sand, stone, and other resources from mines. Others operate longwall shears, cutting machines, and other machinery that cuts or channels along mining surfaces. The machine operators determine where and what depth of a hole or channel should be dug. They position the machine and move controls to operate it. They also check their equipment for malfunctions. There are different types of equipment operators in the mining, oil, and gas industry. Most of the equipment used by the workers is similar to that found in the construction industry. Many people start their career in the mining, oil, and gas industry as labourers, or extraction workers. Workers in these occupations have to do different tasks. The jobs are often physically challenging. The extraction helpers assist their senior workers at a mine or oil & gas site. The types of tasks they do depend a lot on the types of extraction.

To succeed in the industry, workers also need determination and technological expertise. The workers who operate or move heavy equipment or machinery need physical strength. People who love adventures and like travelling to different places will like the job. Companies prefer to hire people who work well on teams and have good decision-making and problem-solving skills.

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PREVENTING RUST ON STAINLESS STEEL PIPES

Focusing on storage and shipping methods, plus adhering to a governing specification, are important for not only operating efficiently but to avoid costly rework. Rust on a stainless steel pipe surface presents a serious concern for oil and gas companies operating piping in fractures in the oil field marine environment, including adjacent coastal areas. When rust appears on the inside or outside surface of a stainless steel pipe, corrosion inspection teams notice, and questions arise as to why it occurred. To obtain high-integrity weldments meeting demanding oilfield service conditions, the Engineering Authority responsible for designing, fabricating, and installing weldments in oilfield applications outsources due diligence for selecting, developing, and supporting subcontracting fabricators.

Fabrication Synopsis

The critically of ensuring manufacturing readiness for a subcontracted fabricator is best handled through analyzing consequences experienced by an Engineering Authority for failing to perform outsourcing due diligence.
Type 316L austenitic stainless steel pipe spools-pipe sizes 2-to 20-in.outside diameter (OD), schedules 10 and 40- were subcontracted for fabrication in accordance with ASME B31.3, process piping.
All pipe welds were visually and radiographically inspected. Upon fabrication completion, all pipe spools were hydrostatically tested then transported to a remote, seaside construction site and stored outdoors, unprotected, for two or four weeks. As the pipe spools lay in storage awaiting installation, widespread rust developed at weld joints and along pipe lengths.
Subsequently, all pipe spools were visually inspected, and many were deemed unacceptable for installation. Pipe spool installation was delayed and an $800,000 cost was endured by the engineering authority to expedite corrective measures, such as chemical treatment and fabrication rework, for obtaining rust-free pipe spools. This event also triggered a root cause investigation encompassing the respective fabricator- the company subcontracted by the engineering authority to fabricate the projects stainless steel pipe spools- along with the engineering authority.

Root Cause Investigation

Six Sigma was employed as a root cause analysis tool in determining why widespread rusting of the 316L stainless steel pipe spools had occurred. The investigation encompassed an on-site review of the fabricator's production facility, shop floor discussion, and stainless steel material/rust specimens. The following factors were identified to be the root causes involving both the fabricator and engineering authority.
               Rusting occurred for two reasons: an anodic reaction resulting from exposure of surface iron (Fe) contamination to a marine environment and iron contamination from an incorrect weld filler metal (a carbon-steel weld filler metal).
Iron Contamination Mechanism

The dissemination of pertinent project documentation is an engineering authority responsibility for welded product outsourcing. However, there was no governing stainless steel material handling and control specification for the project.

Material Handling Issues
Stainless steel pipes were shipped by the pipe manufacturer to the fabricator, with carbon-steel banding straps placed in direct contact with pipe material, so rust strips developed where carbon-steel banding straps had scraped and gouged the pipe. The specification would have stipulated the use of noncontaminating banding straps. Surface rust manifestation is not easily and always successfully removed by mechanical techniques such as grinding, whereas chemical treatment with cleaning, descaling, and passivation is a more thorough and less invasive process.
As a corrective measure to eradicate exogenous iron contamination from the interior and exterior surfaces, project pipe spools were subjected to chemical treatment in accordance with ASTM A 380, Standard practice for cleaning, designing, and passivation of stainless steel parts, equipment, and systems.

Fabrication Practices

In addition, there was no presiding stainless steel welding specification provided by the engineering authority for the fabricator to comply with. A welding specification addresses mandatory requirements, specific prohibitions, and recommended guidelines for fabrication activities to ensure that the intended design services and performance characteristics of the pipe spools are met.
In manufacturing stainless steel weldments, a requisite is to physically isolate stainless steel manufacturing from carbon-steel welding operations to avoid iron contamination. However, within the fabricator's job shop, stainless steel pipe spools for the project were fabricated near to carbon-steel fabrication activities.
Shop and pipe spool cleanliness during production was not adequately maintained such that carbon-steel welding, grinding, and cutting particulate that had accumulated inside the stainless steel pipe spools corroded after being subjected to water for hydrostatic testing.

Widespread rusting of these type 316L stainless steel pipe spool was a direct result of the engineering authority failing to perform outsourcing due diligence. Doing so would have ensured manufacturing readiness of the fabricator prior to and throughout pipe-spool productions. Also, if outsourcing due diligence had been performed, both the engineering authority and fabricator would have been prepared for production activities.

REMOVING RESIDUAL MAGNETISM BEFORE ARC WELDING.

Welding is used for pipes and tubes in the fabrication of boiler components like headers, panels, and coils.Arc welding processes, including gas tungsten arc welding, shielded metal arc welding, and submerged arc welding are used.The underlying principle of this entire arc welding process is an electric arc is struck between an electrode and base metal, whereas the heat input of electric arc is used for melting and joining metals.

The raw material of the pipes and tubes used for fabrication of boiler components, as mentioned previously at the manufacturing stage, are finally

inspected for quality by nondestructive magnetic particle examination and also handled by magnetic cranes during transportation.Even after demagnetization, some amount of residual magnetism will be present on pipes and tubes and supplied as such.During fabrication, welding of these residual magnetic pipes/tubes is a challenge.

Problems during welding of pipes and tubes.

During welding of pipes and tubes, an electric arc is produced between the electrode and base metal to melt the metals at the welding point.This electric arc consists of a stream of electrons.If a significant level of magnetism is present in the pipes or tubes being welded, then interaction takes place between the magnetic field and the electric arc, which causes the welding arc to be deflected.This is known as arc blow.Due to this wandering of the arc, the welder may not be able to manipulate the arc resulting in welding defects like porosity, incomplete fusion, and more.

Depending upon the level of residual magnetism in steel, welding process such as GTAW, SMAW, and SAW are more sensitive to arc blow.Arc instability occurs in SMAW when the level of residual magnetism in steel is more than 20 Gauges, and arc instability occurs in SAW when the level of residual magnetism in steel is more than 40 gauss.

Magnetic arc blow is more likely to occur with lower voltage arcs.Hence the GTAW process,which has a low arc voltage of 10-15v, is more sensitive and susceptible to arc blow.But GTAW is a common process for root pass welding of pipes and tubes because it provides complete joint penetration welding on one side.Therefore, it is mandatory to demagnetize the residual magnetism developed in pipes and tubes to less

than 10 Gauss before using the GTAW process.

Principle and Method of Diamagnetism

Generally, two types of demagnetization are available: electrical demagnetization and thermal demagnetization.The electrical demagnetization method subjects the magnetized test object to the influence of a continuously reversing magnetic field that gradually reduces in strength, causing a corresponding reversal and reduction of the field in the test object.There are many types;

• AC Coil
• AC through current step down
• AC through current reactor decay
• DC through current reversing step down
• DC coil reversing step down
• AC yoke
• Reversing DC yoke

The thermal demagnetization method heats the material above Curie temperature, causing magnetic material to lose its magnetic properties.It consists of

• Annealing above Curie temperature
• Preheating before welding.

Disadvantages of the Diamagnetism Methods

Both electrical and thermal demagnetization methods have certain disadvantages that restrict their usage for industrial applications, such as in boiler industries.The major disadvantages of using electrical demagnetization are that it is only efficient for smaller size components, and boiler components are larger size pipes and tubes.Therefore, the only suitable method is thermal demagnetization, although the annealing heat treatment demagnetization, although the annealing heat treatment operation consumes more time in heating and cooling cycles, and also power and fuel consumption for this process is more costly.Combining this demagnetization of pipes and tubes with other annealing operations may be more economical.

Principles and methods of bridge piece technique

A bridge piece is a small metal strip used to secure or fit up two butt joint members in alignment for welding. This bridge piece is tack welded on either side of the parts to be welded, securing them alignment by keeping proper root opening and ID matching for making sound weld metal.

When two tubes or pipes having residual magnetism are edge prepared and brought together for welding, the magnetic flux concentrates mostly on the edges due to the nature of the magnetic field. On welding the bridge piece to the tube or pipe by SMAW, the heat produced will cause the tube or pipe edges to be raised to a temperature close to the Curie temperature and reduce the magnetic flux at the edges, enabling the use of GTAW.

• Select a bridge piece with a minimum leg length of 50 mm so as to have length welded by SMAW, causing more heat input.
• Select 3 to 4 bridge pieces, depending on the diameter of the pipes or tubes, to cover the circumferential length.
• Tack weld the bridge pieces on the pipes or tubes, as per the required alignment.
• Start welding the bridge pieces by SMAW process, probably 3.2 or 4 mm electrode with a slightly higher current of 150-160A.
• Make 1 or 2 weld passes to increase the heat input.
• Concentrate 2-3^rd current on the bridge piece and 1-3^rd current on the pipe to avoid damage to the pipe or tube.
• Carry the above method in all bridge pieces without time delay. Due to summation effect of welding heat input, the magnetic flux will be reduced at the edge of the piped or tubes, allowing for easy welding without arc blow.
• While welding the bridge piece onto a pipe or tube, the bridge piece is to be welded only on one side for easy removal after demagnetization.
• Immediately after welding the bridge piece, being root welding using GTAW.
• After completion, grind and remove these bridge pieces.

Conclusion

Although various methods are available for demagnetization, they are more restricted due to their applications and time-consuming process. The bridge piece techniques is a fast and practical demagnetization technique applied for welding of tubes and pipes having residual magnetism. This method uses the basic thermal demagnetization principle and is applied in a practical manner.