For the benefit of schools and colleges in the UK, Chevron has put together information about the oil and petroleum industry, details of which can be found below.

Chevron also provides school visits to some of its terminals. For further information about its education programme please contact: Shaun Dewar, Chevron, 1 Westferry Circus, Canary Wharf, London E14 4HA. Tel: 020 7719 3146. E-mail: dewarsa@chevron.com

For information about Chevron's exploration activities in the UK North Sea please go to http://www.chevron.com 

Oil in the UK

How oil is formed

The story of oil began millions of years ago when vast oceans covered much of what is now dry land. Billions of marine animals such as fish and crustacae and plankton lived in the seas. When they died, their remains sank to the sea bed and gradually piled up, layer upon layer, to be buried by layers of sediments.

This organic matter was compressed by the great weight of more silt and sand. The resulting pressure and heat started to change the organic matter and the hydrocarbons we know as oil and gas.

The mixture of hydrocarbons and water was gradually squeezed out of the sedimentary layers in which it was formed into nearby porous rock such as sandstone, limestone and chalks.

Over long periods of time movements of the earth’s crust broke up the layers of porous rock and created traps where oil collected. Being more buoyant than the surrounding rock, the oil and gas passed upwards through the porous rock until trapped by a layer of permeable rock.

The oil and gas accumulated through the ages inside the pores of rock, making the reservoirs of energy that are stored away both beneath land and sea.

The term hydrocarbon covers a number of naturally formed substances, ranging from methane gas to oil and tar. Hydrocarbon reserves are usually found in the group of rocks known as sedimentary rocks, which are laid down in layers or strata. Geologists in the 1960s started to look for hydrocarbons below the North Sea in areas known as sedimentary basins.

How oil is found

Geological surveys are used to detect the presence of sedimentary basins and map their limits. The most valuable are seismic surveys which use sound to produce shock waves that pass into the earth’s crusts and are reflected back from the various rock layers. The travel times of the waves are measured by an array of instruments enabling a pattern of the underlying rock to be produced. The results are studied to see if the strata conform to the geological requirement that indicate the potential presence of oil and gas fields.

The geologist is looking for five characteristics which indicate the presence of oil and or gas fields.

Source rock: containing suitable organic matter which under the conditions of heat and pressure produces hydrocarbons.

Reservoir rock: a porous layer of rock in which the hydrocarbons are retained in the pores of the rock – rather like a sponge holds water.

Cap rock: a rock or clay which prevents the hydrocarbons from escaping.

Trap: A rock formation bent into a dome or broken by a fault which blocks the escape of the hydrocarbons either upwards or sideways.

The correct sequence of geological events: this means the first four requirements have to occur at the right time, the right place and in the right order for oil and gas to be formed and trapped.

In the North Sea oil and gas fields have been found in a range of rocks covering the ancient or Paleozoic to the modern, or Cainozoic periods. The youngest rocks in which oil has been found are in the region of 35-40 million years old.

Geophysical surveys can only indicate the possible presence of oil and gas. The next stage is to drill exploration wells, or wildcats as they are known in the industry, at the most likely location.

In the North Sea, floating drilling rigs are used. These can drill thousands of feet below the sea bed and the rate of drilling depends on the hardness of the rock. Each well can cost millions of pounds to drill, with no guarantee of finding oil or gas.

Oil companies cannot just explore and drill for oil and gas where they want. The UK Government controls drilling on land and in 1964 enacted the UK Continental Shelf Act to control drilling offshore.

The UK sector of the North Sea is divided into large quadrants of one degree latitude and one degree longitude, each subdivided into 30 blocks of approximately 10 by 20 kilometres (6 by 12 miles). Through a series of licensing rounds, the Department of Energy invites companies individually or as a group to apply for the right to explore the designated blocks. By use of the grid system each quadrant and block are given a number.

Producing the oil

In the North Sea, oil is not normally pumped up to the platform, but flows up under the natural pressure of the reservoir (rather like shaking a fizzy drink and then taking the top off). Often, water and sometimes gas is pumped back down into the reservoir to maintain the pressure and help lift the oil to the platform.

When the bubbling mixture of crude oil, gas and water reaches the platform, it is separated into gas and crude oil for delivery by pipeline back to shore.

The Oil Business

In 1863 John D Rockefeller set up his own petrol refinery in Pennsylvania, USA. Ever since then oil has been one of the world’s major commodities. As a basis for international trade in a raw material, oil ranks with metals and minerals.

The Texaco Petroleum Products Company first began marketing fuel and lubricants in the UK in 1916. Today the Texaco brand is part of the global oil company Chevron. In the UK it has around 1,100 Texaco branded service stations.

As well as petrol and diesel, a range of other automotive products are sold, including engine oil and gear oils and speciality products such as anti-freeze, brake fluid and windscreen de-icer.

From the refinery to the service station

From the Chevron refinery at Pembroke, south west Wales, products are supported by pipeline, road tankers or coastal tankers to depots and terminals at strategic locations around the UK. A specialist distribution company is contracted to deliver products to customers from these depots which is co-ordinated by a Customer Care team at Swindon, Wiltshire.

At each stage of the distribution process, every care is taken to prevent leaks, spills or emissions that would damage the environment. There are regular safety checks on the road tankers, coastal tankers and hundreds of miles of pipeline. Procedures for loading and unloading are carefully monitored.

Service stations today

Modern service stations are situated at locations which are easily accessible for motorists, enabling them to refuel swiftly and drive on, or to make use of other convenient facilities, such as checking tyre pressure or car washes.

Forecourt shops offer customers a range of products including hot food and drinks, confectionary, magazines and newspapers, flowers, groceries as well as lubricants and motoring accessories.

How petrol is priced

The price which the British motorist pays for a litre of petrol at the pump is influenced by a number of factors. These include: the international market price of petrol; the dollar/sterling exchange rate; the amount of tax and duty levied by the government; and local market conditions.

The market prices are determined by whether there is sufficient oil or petrol being supplied to meet the world’s demands and also on the international situation. The supply of crude oil is dominated by the cartel OPEC (the Organisation of Petroleum Exporting Countries) which can control the price by restricting crude oil production.

There is also a growing international market in petrol (known as gasoline internationally). The main European market is based in Rotterdam and fluctuations in the prices on this market may give rise to changes in pump process in the UK. References to the Rotterdam Spot market can often be found in newspaper articles about petrol price changes.

As the oil market originally grew up in the USA in the latter part of the nineteenth century, international crude oil and petrol prices are expressed in dollars all around the world. The exchange rate between the dollar and the pound sterling affects the price of petrol in the UK. Fluctuations in this exchange rate therefore feed through into pump prices. For example, if the dollar strengthens against sterling, the cost of crude oil and gasoline will go up, probably resulting in higher pump process.

The greatest effect on pump prices comes from the level of tax and duty charged by the government. In the UK, motorists pay not only VAT but also excise duty. About 75 per cent of the price at the pump goes to the government in tax and duty.

Designing a service station

Locating a service station

Many factors have to be taken into consideration when choosing the location for a new service station. These include the current and planned road pattern in the surrounding area, the daily levels of traffic passing the site, the estimated number of cars owned by people living in the immediate area, as well as the industries in the area and the volume of diesel sales they might generate.

Looking after the customer

Modern forecourts are designed to provide a clean, attractive environment. The aim is to attract customers by providing easy accessibility, spaciousness, speed of refuelling, convenience and range of facilities from the forecourt shop to car wash facilities.

Import factors to consider include the width of the pump island lanes, the position of the car wash and the position of adequate queuing space for the car wash and of parking space for shoppers.

Other key factors in forecourt design include the size and location of the canopy, the number of pumps and nozzles, the full use of the company’s brand image and the positioning and strength of the lighting. The aim is to create “optimum visibility” of the site to the public.

Looking after the environment and safety

Environmental considerations play a big part in service station design. There are strict rules about siting and design of storage tanks and offloading facilities to minimise the risks of fire and the possibilities of spillages and leakages. The buildings are designed to blend into the area alongside existing buildings and sites are fully landscaped.

Refining – Chevron in Pembroke

Oil refining at Milford Haven

The Chevron refinery was opened in 1964 and covers an area of 223 hectares (550 acres) adjoining the Pembrokeshire Coast National Park. Operating 24 hours a day, every day of the year, it directly employs several hundred people and supports the employment of many more. On average it can process up to 210,000 barrels per day of crude oil, producing 33 million litres (7,350,000 million gallons) of products of which 50 per cent is petrol every 24 hours.

Crude oil arrives from fields around the world and as many as 2-4 tankers may dock in a week. In one week, the refinery may receive more than 2 million barrels of crude oil.

The Oil Refining Process

Arrival

When crude oil arrives at Pembroke it usually looks like thin treacle, black or brown in colour. All of it arrives by sea, in tankers of varying sizes. The tankers are more than 300 meters (984 feet) long, each big enough to fit two football pitches on their deck.

Storage

Once a tanker is berthed, jetty operators connect it to loading arms. These are pipes fitted with swivel joints connected to the tanker to on-load or off-load product. They are up to 24 meters high (80 feet) and are tall enough to cope with the rise and fall of the tide. Crude oil can be pumped at up to 100,000 barrels an hour through pipelines to one of the plant’s storage tanks.

The plant has 145 storage tanks, 11 for crude oil and the rest for the storage of petrol and other refined product. Each tank is painted to blend in with the landscape.

Some oils are so thick that certain pipes from the jetty have to be heated by steam to help the crude oil flow. Planners meet regularly to decide how to mix the different types of crude oil which are in store in order to maximise the amount of petrol produced.

Blending

Computers are used to find the correct blend, mixing, for example, heavy, thick oil, with a thinner, lighter one. The thickness, or stickiness, of oil is called viscosity.

As many as six separate crude oils, may be blended at any one time to make sure they flow smoothly. Blending ensures the correct proportions of each product.

The crude oil then goes through three main processes – distillation, conversion and special treatments.

At the end of the process at the Pembroke refinery petrol, kerosene, diesel, heating and fuel oils are produced.

Testing

At each stage of refining the oil, samples are taken to the refinery’s laboratories to be tested. These tests include those to find an oil’s boiling range, its flash point (the temperature at which it will set alight), its density and its viscosity. These and a wide range of other tests ensure the products are the correct quality.

Processes used at Pembroke

Fractional distillation

Distillation converts a liquid into vapour by heat and then condenses it again. Fractional distillation uses distilling to separate liquids with different boiling points.

Each element of the refined product has specific industrial uses, ranging from heavy fuel oil used in ship’s boilers and as power station fuel, to bottled gas for domestic purposes.

The catalytic cracker

The initial separation of crude oil into its components (fractions) is by the fractioning process. But the oil still needs further processing. Less than 20 per cent of crude oil can be converted to petrol by distillation and this would lead to huge oversupply of heavy oil fuels.

The catalytic cracker breaks down the heavier fractions into lighter, more valuable products and enables the refinery to separate almost 50 per cent of crude oil into petrol.

The cracker introduces a catalyst to the heavier oil. This works by breaking up the oil without being used by itself. The catalyst becomes coated in carbon which is then burned off in a regeneration chamber next to the cracker, allowing a continual recycling of the catalyst.

Additional special processes remove impurities such as sulphur and improve the quality of various products by extra refining.

Environment and safety

Caring for the environment and safety are always important considerations for the industry. At Pembroke refinery a number of steps are taken and below are some of the different ways this is done.

Water: a waste water treatment plant ensures that all water discharged into Milford Haven meets stringent quality control standards.

Air: the refinery has specialised equipment for minimising atmospheric pollution by reducing emissions of sulphur dioxide to below approved levels.

Noise: the design of the refinery includes various features to make sure that noise levels are kept within limits agreed with local authorities. Sound levels are often monitored inside the refinery and at the perimeter fence.

Landscaping: although it is not possible to completely hide a refinery, the visual impact has been reduced by careful siting and screening behind earth banks.

Emergency response: The refinery has detailed contingency plans to deal with major incidents such as oil spills and fires. These take into account local emergency plans drawn up by the County Council and Port Authority. The plans are tested regularly at emergency response exercises.