Deposit Life Cycle

A deposit is worked for as long as it contains hydrocarbons that can be profitably and technically extracted. During this period, oil and gas production varies according to predictable criteria, but also random factors. In any case, once a company decides to stop working a deposit, it cleans up and rehabilitates the site, returning it to its original condition.

The Various Stages of Oil Production

The life span of an oil or gas deposit is the period during which the hydrocarbons it contains are extracted, generally 15 to 30 years. For deposits containing large quantities of hydrocarbons, it can be 50 years and more.

On the other hand, deep-sea deposits are extracted for only 5 to 10 years, because of the high extraction costs. There are three stages in a deposit's life cycle:

   • The initial phase lasts 2-3 years. During this period, hydrocarbon production gradually increases as the wells are drilled.

The life span of a deposit is generally
15 to 30 years.

   • Next, extraction reaches a plateau phase, during which annual production is stable.
This production plateau also lasts 2-3 years or more for large reservoirs.

   • The final stage is the decline phase, when oil and gas production fall by 1-10% annually. This stage culminates in the definitive shutdown of the site.

When a deposit is in production, all the oil or gas discovered in the deposit is recovered.

False. No matter how large or small the deposit, residual oil and gas can no longer be extracted after a certain point; because the reservoir only contains hydrocarbons locked in spaces in the rock, or small quantities of highly viscous oil. This oil cannot be brought to the surface because it is not liquid enough to circulate and because its pressure is lower than the air pressure in the production well.

Consequently, the proportion extractable oil - known as the recovery rate - varies between 10-50%. Extracting gas deposits is easier because gas is less dense than oil. The recovery rate in these reservoirs can be as high as 60-80%.

These injections liquefy the remaining oil and increase its volume, allowing it to rise to the surface. They also help release some oil or gas molecules trapped in the rock that can then be recovered.

The recovery rate is crucial for the extraction of hydrocarbon deposits: for large reservoirs, just a few percentage points more translates into huge quantities of oil. Just 1% of the oil produced in all fields worldwide would be enough to cover global demand for 2-3 years!

The oil and gas chain
© Keblow

When Production Takes an Unexpected Turn

Before beginning to extract a deposit, a production forecast is drawn up. This provides an estimate of the quantities of hydrocarbons that the deposit will provide over its life span.

However, the unexpected can sometimes happen during production.

   • Sometimes, the reservoir produces 10-20% more oil than estimated.

   • Or sometimes daily well productivity is much lower than forecasted, which can compromise the operation's overall profitability. In this case, the company may be forced to shut down operations prematurely. In cases such as these, which are fortunately rare, the company loses almost all of its initial investment.

So, oil companies have imperfect knowledge of the subsurface, even though they do their best to draw up accurate production forecasts. This is why throughout the deposit life span they carry out regular reassessments of the remaining extractable oil and gas. These new estimates, up or down, give a better idea of the best time to shut down operations.

Decommissioning a Deposit

A deposit is decommissioned when, for various reasons, producing the oil or gas costs more than it brings in.

   • At the end of operations, assisted recovery processes can prove too expensive to continue extraction.

   • All deposits contain residual water that, during extraction, rises to the surface through the well at the same time as the hydrocarbons. However, after some time has passed,
more water and fewer hydrocarbons can rise through the well. If this happens, it costs more to extract the underground oil or gas than can be made from selling it on the market.

   • On some sites, the natural gas extracted is not sold on the open market. However,
gas production can sometimes surge suddenly, to the detriment of oil production.

   • The international economic climate also has a role to play: if the price per barrel of oil falls on a long-term basis, some fields will be decommissioned earlier than planned. On the other hand, if the price rises, fields will be worked for longer.

The Future of a Deposit

When an oil company decommissions a deposit, this does not necessarily spell the end for it.

   • The deposit can be bought by smaller, private companies that are interested in taking it over. These companies may have lower operating costs or may be happier with lower productivity or profitability than the larger private companies.

   • The site may also be taken over by a state-owned company of the country where it is located, i.e. a public company. 

In any case, when the field is definitively shut down, specialist teams come in to clean up and rehabilitate the site.

   • The facilities are dismantled, except for the wellheads , which are located on top of the wells and are left in place for safety reasons. The materials used to build the infrastructure are recycled. If the site is offshore, the fixed platforms are dismantled.

   • The site is fully and thoroughly cleaned, and teams look for and eliminate all possible sources of pollution.

   • Once the site has been cleaned up, site rehabilitation starts- this involves returning the site to its original condition with replanting wherever possible.