Overview. "Petroleum Engineering Overview" Prepared as part of the Sloan Career Cornerstone Center (

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1 Petroleum Engineering Overview Overview - The Field - Preparation - Day in the Life - Earnings - Employment - Career Path Forecast - Professional Organizations Overview Petroleum engineers search the world for reservoirs containing oil or natural gas. Once these resources are discovered, petroleum engineers work with geologists and other specialists to understand the geologic formation and properties of the rock containing the reservoir, determine the drilling methods to be used, and monitor drilling and production operations. They design equipment and processes to achieve the maximum profitable recovery of oil and gas. Petroleum engineers rely heavily on computer models to simulate reservoir performance using different recovery techniques. They also use computer models for simulations of the effects of various drilling options. Because only a small proportion of oil and gas in a reservoir will flow out under natural forces, petroleum engineers develop and use various enhanced recovery methods. These include injecting water, chemicals, gases, or steam into an oil reservoir to force out more of the oil, and computer-controlled drilling or fracturing to connect a larger area of a reservoir to a single well. Because even the best techniques in use today recover only a portion of the oil and gas in a reservoir, petroleum engineers research and develop technology and methods to increase recovery and lower the cost of drilling and production operations. The Field The word petroleum generally refers to crude oil or the refined products obtained from the processing of crude oil (gasoline, diesel fuel, heating oil, etc.) We find petroleum products in every area of our lives. They are easily recognized in the gasoline we use to fuel our cars and the heating oil we use to warm our homes. Less obvious are the uses of petroleum-based components of plastics, medicines, food items, and a host of other products. The United States consumes over 20 million barrels (840 million gallons) of petroleum products each day, almost half of it in the form of gasoline used in over 200 million motor vehicles with combined travel over 7 billion miles per day.

2 Gasoline is made from crude oil, which was formed from the remains of tiny aquatic plants and animals that lived hundreds of millions of years ago. These remains were covered with layers of sediment, which over millions of years of extreme pressure and high temperatures became the mix of liquid hydrocarbons (an organic chemical compound of hydrogen and carbon) that we know as crude oil. Because crude oil is made up of a mixture of hydrocarbons, refineries break down these hydrocarbons into different products. These "refined products" include gasoline, diesel fuel, heating oil, jet fuel, liquefied petroleum gases, residual fuel oil, and many other products. Refining Basics The most basic refining process is aimed at separating the crude oil into its various components. Crude oil is heated and put into a still -- a distillation column -- and different hydrocarbon components boil off and can be recovered as they condense at different temperatures. Additional processing follows crude distillation, changing the molecular structure of the input with chemical reactions, some through variations in heat and pressure, some in the presence of a catalyst, a substance that increases the rate of a chemical reaction without being consumed in the reaction. The characteristics of the gasoline produced depend on the type of crude oil that is used and the setup of the refinery at which it is produced. Gasoline characteristics are also impacted by other ingredients that may be blended into it, such as ethanol. The performance of the gasoline must meet industry standards and environmental regulations that may depend on location. Distribution After crude oil is refined into gasoline and other petroleum products, the products must be distributed to consumers. The majority of gasoline is shipped first by pipeline to storage terminals near consuming areas, and then loaded into trucks for delivery to individual gas stations. Gasoline and other products are sent through shared pipelines in "batches." Since these batches are not physically separated in the pipeline, some mixing or "commingling" of products occurs. This is why the quality of the gasoline and other products must be tested as they enter and leave the pipeline to make sure they meet appropriate specifications. Whenever the product fails to meet local, state, or federal product specifications, it must be removed and trucked back to a refinery for further processing. After shipment through the pipeline, gasoline is typically held in bulk storage terminals that often service many companies. At these terminals the gasoline is loaded into tanker trucks destined for various retail gas stations. The tanks in these trucks, which can typically hold up to 10,000 gallons, usually have several compartments, enabling them to transport different grades of gasoline or petroleum products. The truck tank is where the special additive packages of gasoline retailers get blended into the gasoline to differentiate one brand from another. In some areas, ethanol may be "splash blended" in the tanker to meet environmental requirements. When the tanker truck reaches a gas station, the truck operator unloads each grade of gasoline into the appropriate underground tanks at the station.

3 Oil Sources Crude oil is a smelly, yellow-to-black liquid and is usually found in underground areas called reservoirs. Scientists and engineers explore a chosen area by studying rock samples from the earth. Measurements are taken, and, if the site seems promising, drilling begins. Above the hole, a structure called a 'derrick' is built to house the tools and pipes going into the well. When finished, the drilled well will bring a steady flow of oil to the surface. The world's top five crude oil-producing countries are: Saudi Arabia, Russia, United States, Iran, and China. Over one-fourth of the crude oil produced in the United States is produced offshore in the Gulf of Mexico. The top crude oil-producing states are: Texas, Alaska, California, Louisiana, and New Mexico. Note: Some resources and graphics in "The Field" section are provided by the Energy Information Administration ( Preparation A bachelor's degree in engineering is required for almost all entry-level engineering jobs. Admission Requirements Admissions requirements for undergraduate engineering schools include a solid background in mathematics (algebra, geometry, trigonometry, and calculus) and science (biology, chemistry, and physics), and courses in English, social studies, humanities, and computer and information technology. Co-ops Internships and Coops provide students with a great opportunity to gain real-world experience while still in school. Many universities offer co-op and internship programs for students studying Petroleum Engineering. This provides students with first hand experience in the industry and the opportunity to contribute to a real-world program or project. Courses of Study Bachelor's degree programs in engineering typically are designed to last 4 years, but many students find that it takes between 4 and 5 years to complete their studies. In a typical 4-year college curriculum, the first 2 years are spent studying mathematics, basic sciences, introductory engineering, humanities, and social sciences. Petroleum engineering students may also take courses such as Reservoir Petrophysics, Petroleum Engineering Systems, and Physical Geology during these years. In the last 2 years, a petroleum engineering program might include courses in Drilling and Production Systems, Geostatistics, Well Performance, Reservoir Fluids, Petroleum Project Evaluation, Engineering Ethics, and Well Completion and Stimulation.

4 Accredited Programs Those interested in a career in petroleum engineering should consider reviewing engineering programs that are accredited by the Accreditation Board for Engineering and Technology, Inc. (ABET). ABET accreditation is based on an evaluation of an engineering program's student achievement, program improvement, faculty, curricular content, facilities, and institutional commitment. The following is a partial list of universities offering accredited degree programs in petroleum engineering. Programs The following is a current list of universities offering degree programs in Petroleum Engineering. University of Alaska Fairbanks Colorado School of Mines The University of Kansas University of Louisiana at Lafayette Louisiana State University and A&M College Marietta College Missouri University of Science and Technology Montana Tech of the University of Montana New Mexico Institute of Mining and Technology The University of Oklahoma Pennsylvania State University Texas A & M University University of Texas at Austin Texas Tech University The University of Tulsa West Virginia University Day in the Life A degree in petroleum engineering can lead to many career paths. While most work directly for oil and gas production companies, the options for work are broad and cross over many industries. Job Duties Petroleum engineers focus on a wide range of projects and activities. Some focus on production challenges, identifying, testing, and implementing methods for improving oil and gas production. They might focus on economics, helping a team determine the optimum number of wells appropriate for a given operation. A petroleum engineer may focus on safety issues, or maintenance support, identifying and planning upgrades of equipment or systems. A petroleum engineer may choose to teach, or to serve as a consultant to investors, banks, or other financial services firms. The Workplace The type of job a petroleum engineer has will often determine whether how much they work inside or outside. Many petroleum engineers work on job sites, but others work in an office setting. A consultant to the financial industry, for example, may spend most of their time working in an office setting. There are strong international travel opportunities for petroleum engineers, as it is very much a global business. Many companies have offices and sites in multiple countries and transfers are common.

5 Teams and Coworkers Almost all jobs in engineering require some sort of interaction with coworkers. For example, a petroleum engineer might be working on a team with geologists and contractors developing a design for a new drilling operation. Whether they are working in a team situation, or just asking for advice, most engineers have to have the ability to communicate and work with other people. Engineers should be creative, inquisitive, analytical, and detail-oriented. They should be able to work as part of a team and to communicate well, both orally and in writing. Communication abilities are important because engineers often interact with specialists in a wide range of fields outside engineering. Earnings Earnings for engineers vary significantly by specialty, industry, and education. Even so, as a group, engineers earn some of the highest average starting salaries among those holding bachelor's degrees. Salary Data According the U.S. Department of Labor, Bureau of Labor Statistics, the median income for petroleum engineers is $98,380. In terms of starting salaries, the average starting salary for petroleum engineers who have earned a Bachelor's degree is $60,718. According to a recent salary survey by the National Association of Colleges and Employers, bachelor's degree candidates in petroleum engineering received starting salary offers averaging $62,236 a year. They are among the highest paid engineers. SPE Salary Survey The Society of Petroleum Engineers conducts a global salary survey of members. For the most recent survey (2007), the average base salary of respondents worldwide was $122,458, an increase from the USD 116,834 in the 2006 survey. Additional compensation, such as bonuses, housing allowances, car allowances, and retirement contributions raised total average compensation for 2007 to $167,712. Not surprisingly, the average income increased with years of work experience. Employment According to the U.S. Bureau of Labor Statistics, petroleum engineers hold about 17,000 jobs in the United States. This represents 1.1% of the 1.5 million jobs held by engineers in the U.S. Petroleum engineers work mostly in oil and gas extraction, professional, scientific and technical services, and petroleum refining. Employers include major oil companies and hundreds of smaller, independent oil exploration, production, research institutes, and service companies. Most petroleum engineers work where oil and gas are found. Large numbers are employed in Texas, Louisiana, Oklahoma, Alaska, and California, including offshore sites. Many American petroleum engineers also work overseas in oil-producing countries.

6 The following is a partial list of employers of petroleum engineers: Oil/Gas Producing Companies and Equipment Manufacturers Amerada Hess Corp. Anadarko Petroleum Corp. Apache Corp. BP plc Burlington Resources Inc. Cabot Oil & Gas Corp. Callon Petroleum Co. Canadian 88 Energy Corp. Canadian Natural Resources Ltd. Chesapeake Energy Corp. Chevron Corp. Citation Oil & Gas Corp. CMS Energy Corp. ConocoPhillips Co. Denbury Resources Inc. Devon Energy Corp. Eagle Plains Resources Ltd. El Paso Corp. ENI SpA Energen Corp. EOG Resources Inc. Equitable Resources ExxonMobil Corp. Forest Oil Corp. Halliburton Houston Exploration Co. Kerr-McGee Corp. Koch Industries Inc. Marathon Oil Corp. Murphy Oil Corp. Newfield Exploration Co. Occidental Petroleum Corp. Petro-Canada Pioneer Natural Resources Co. Shell Stone Energy Corp. Swift Energy Co. Unocal Corp. Vintage Petroleum Inc. XTO Energy U.S. Federal Government U.S. Bureau of Land Management U.S. Chemical Safety and Hazard Investigation Board U.S. Department of Energy U.S. DOE Fossil Energy Program U.S. Environmental Protection Agency U.S. Department of the Interior - Offshore Minerals Management U.S. Geological Survey Research Institutes Argonne National Laboratory Brookhaven National Laboratory Idaho National Engineering and Environmental Laboratory Lawrence Berkeley National Laboratory Los Alamos National Laboratory Natural Gas and Oil Technology Partnership Oak Ridge National Laboratory Sandia National Laboratory U.S. National Energy Research Scientific Computing Center International Research Institutes Other Employers Consulting Firms Professional Associations Colleges and Universities Environmental Groups State Agencies such as Arkansas Oil and Gas Commission State Geological Surveys such as the Colorado Geological Survey

7 Career Path Forecast According to the U.S. Department of Labor, Bureau of Labor Statistics, petroleum engineers are expected to have 5 percent employment growth over the projections decade of , more slowly than the average for all occupations. Even though most of the potential petroleum-producing areas in the United States already have been explored, petroleum engineers will increasingly be needed to develop new methods of extracting more resources from existing sources. Favorable opportunities are expected for petroleum engineers because the number of job openings is likely to exceed the relatively small number of graduates. Petroleum engineers work around the world and, in fact, the best employment opportunities may include some work in other countries. Professional Organizations Professional organizations and associations provide a wide range of resources for planning and navigating a career in Petroleum Engineering. These groups can play a key role in your development and keep you abreast of what is happening in your industry. Associations promote the interests of their members and provide a network of contacts that can help you find jobs and move your career forward. They can offer a variety of services including job referral services, continuing education courses, insurance, travel benefits, periodicals, and meeting and conference opportunities. A broader list of professional associations is also available at American Association of Petroleum Geologists ( American Gas Association ( American Institute of Mining, Metallurgical, and Petroleum Engineers ( American Petroleum Institute ( Organization of Petroleum Exporting Countries ( Society for Mining, Metallurgy, and Exploration ( Society of Petroleum Engineers (