The petroleum industry and the petroleum engineer

Prairie Crest Energy Inc. is a mid-sized oil producer with its head office in Denver and a field office in Watford City. Its main asset is the Tamarack Lake field, a light-oil development in the Bakken Formation about 10,500 ft below the wheat fields and ranchland of McKenzie County, North Dakota. The company has drilled about 140 horizontal wells there in the last fifteen years, operates several tank batteries and a gas-gathering system, and is now deciding whether to drill a new spacing unit to the north. Reservoir engineer Lena Haugen, drilling and completions engineer Marcus Obi, production engineer Sofia Reyes and Ethan Cardinal, an engineer-in-training who joined the company last spring, will appear throughout this course. Every lesson follows one part of their work, from the geology that put oil in the rock to the day the last well is plugged.

Petroleum engineering is the branch of engineering that finds the best way to get oil and natural gas out of the ground and to market, safely and at a profit, and then to leave the land as it was. It borrows from geology, physics, chemistry, mechanical engineering and economics. A petroleum engineer does not usually find oil; geologists and geophysicists do that. The engineer's questions start once a discovery looks possible. How much oil or gas is there? How fast can it flow? How should the wells be drilled and completed? What equipment is needed at the surface? Will the project pay back its cost, and what will it cost to clean up at the end?

Oil and gas in the energy system

Oil and natural gas still supply more than half of the world's primary energy. Oil is mostly refined into transportation fuels such as gasoline, diesel and jet fuel, and into feedstocks for plastics, asphalt and lubricants. Natural gas heats homes, fuels power plants and supplies the hydrogen and carbon for fertilizer and chemicals. The United States has been the world's largest oil producer for several years, with crude output above 13 million barrels a day, most of it from tight formations developed with horizontal wells and hydraulic fracturing. Texas and New Mexico lead, and North Dakota is usually third or fourth among the states, producing a little over 1.1 million barrels a day in 2026, almost all of it from the Bakken and Three Forks formations.

The industry is commonly divided into three segments. Upstream companies explore for, drill and produce oil and gas; this is where most petroleum engineers work and where Prairie Crest sits. Midstream companies gather, process, store and transport the products by pipeline, rail and tanker. Downstream companies refine crude oil and market fuels and petrochemicals. Large integrated companies operate in all three, while most producers in North America are independent upstream companies that sell their oil at a pipeline hub and their gas into a processing plant or a gathering system owned by someone else.

The life of a field

Every oil or gas field passes through the same broad stages. First, a company acquires the right to explore and produce, by buying a lease from the mineral owner. Geologists and geophysicists study rocks, logs and seismic data to identify prospects. An exploration well tests the best prospect. If it finds hydrocarbons, appraisal wells and tests measure how big the accumulation is and how well it flows. Development follows: drilling production wells, building facilities and connecting pipelines. Production then runs for years or decades, usually rising quickly to a peak and declining as reservoir pressure falls. Secondary and enhanced recovery methods such as waterflooding or gas injection can slow the decline. Finally the wells are abandoned, the facilities removed and the land reclaimed.

Ownership of the oil and gas matters at the first stage. In North Dakota, most mineral rights are privately owned, often by ranch and farm families, by companies and by people who inherited fractions of a homestead's minerals. The federal government owns minerals under federal lands and holds some in trust for tribal nations, including on the Fort Berthold Reservation in the heart of the Bakken play. A producer negotiates an oil and gas lease with each mineral owner, paying a bonus for signing and a royalty on production, commonly one eighth to one fifth of the revenue. Surface rights are often owned separately, and North Dakota law requires the operator to notify the surface owner and pay for damage to the land.

What petroleum engineers do

The profession has several specialties, and most engineers move among them during a career. Reservoir engineers estimate how much oil and gas is in place, how much can be recovered and how fast, using rock and fluid data, pressure tests and computer models. Drilling engineers design wells: the path, the casing, the drilling fluid and the rig program, with safety and cost in balance. Completions engineers design what goes in the well after drilling, including the perforations and hydraulic fracturing that connect the wellbore to the rock. Production engineers keep wells flowing, choose pumps and other artificial lift, and diagnose problems such as scale, sand and water. Facilities engineers design the separators, tanks, compressors and pipelines at the surface.

Other petroleum engineers work in economics and reserves evaluation, preparing the reserve reports that public companies must file and that banks use to set lending limits. Some work for regulators, reviewing well licenses and enforcing rules on spacing, flaring and abandonment. Others work for service companies that supply rigs, fracturing crews, logging tools and chemicals, which employ a large share of the industry's engineers. A growing number apply the same skills to geothermal energy, carbon capture and storage, hydrogen storage and lithium extraction from brines, which all involve fluids moving through rock and wells drilled into it. Lesson 12 returns to these.

Units in the oil field

US producers use oilfield units. Oil volumes are in barrels (bbl) of 42 US gallons, with stock-tank barrels (STB) measured at surface conditions. Gas is in thousand cubic feet (Mcf) or million cubic feet (MMcf), pressure in pounds per square inch (psi) and depth in feet. Rates are given per day: barrels of oil per day (BOPD or bbl/d) and Mcf per day (Mcf/d). Engineers still meet SI units in technical papers and in Canada, so it helps to know that one barrel is 0.159 cubic meters and one Mcf is 28.3 cubic meters. Gas and oil are often added together as barrels of oil equivalent (BOE), counting 6 Mcf of gas as one barrel on an energy basis.

# Unit conversions used every day in the oil field
M3_TO_BBL = 6.2898          # barrels per cubic meter
E3M3_TO_MCF = 35.3147       # Mcf per thousand cubic meters
MCF_PER_BOE = 6.0           # energy-equivalent ratio

def si_to_oilfield(oil_m3, gas_e3m3, water_m3):
    return oil_m3 * M3_TO_BBL, gas_e3m3 * E3M3_TO_MCF, water_m3 * M3_TO_BBL

def boe(oil_bbl, gas_mcf):
    return oil_bbl + gas_mcf / MCF_PER_BOE

tests = {'Well 102/06-14 (SI report)': (42.0, 9.8, 6.5),
         'Well 3-21H (SI report)': (18.5, 4.2, 11.0)}
for name, (o, g, w) in tests.items():
    ob, gm, wb = si_to_oilfield(o, g, w)
    print(f"{name}: oil {ob:6.0f} bbl/d  gas {gm:6.0f} Mcf/d  water {wb:5.0f} bbl/d  -> {boe(ob, gm):6.0f} BOE/d")

# The reverse direction: a US-style report in barrels and Mcf
oil_bbl, gas_mcf = 680.0, 940.0
print(f"\n680 bbl/d = {oil_bbl / M3_TO_BBL:.1f} m3/d;  940 Mcf/d = {gas_mcf / E3M3_TO_MCF:.1f} e3m3/d")
print(f"Oil-equivalent rate: {boe(oil_bbl, gas_mcf):.0f} BOE/d")
share = (gas_mcf / MCF_PER_BOE) / boe(oil_bbl, gas_mcf)
print(f"Gas share of the energy: {share:.0%}")

Well 102/06-14 (SI report): oil    264 bbl/d  gas    346 Mcf/d  water    41 bbl/d  ->    322 BOE/d
Well 3-21H (SI report): oil    116 bbl/d  gas    148 Mcf/d  water    69 bbl/d  ->    141 BOE/d

680 bbl/d = 108.1 m3/d;  940 Mcf/d = 26.6 e3m3/d
Oil-equivalent rate: 837 BOE/d
Gas share of the energy: 19%

The program shows a habit worth building early: write the unit with every number and convert once, at the start, rather than mixing units in the middle of a calculation. Production reports, reserve reports and regulatory filings all carry units, and a confused unit is one of the most common causes of costly errors in the industry. Spacecraft have been lost to mixed units, and smaller but real losses happen when a pressure in kilopascals is read as psi or a volume in cubic meters is entered as barrels.

Safety, environment and license to operate

Oil and gas work carries serious hazards: high pressures, flammable fluids, toxic hydrogen sulfide, heavy equipment and remote sites. A loss of well control, called a blowout, can kill workers and spill oil for weeks. The industry's safety systems, from blowout preventers to pressure-relief valves to hazard assessments before every job, exist because of past disasters. Environmental risks include spills, leaks of methane and other gases, groundwater contamination from poorly built wells and disturbance of land and wildlife habitat. Petroleum engineers are responsible for designing wells and facilities that keep fluids where they belong, and their professional license makes that a legal duty, not just a company policy.

Public acceptance matters as much as technical success. Landowners, tribal nations and communities near oil fields expect to be heard, to share in benefits and to see the land restored. In North Dakota, North Dakota Industrial Commission (NDIC) sets the rules for drilling, production, spacing, flaring and plugging, through its Oil and Gas Division, as Lesson 11 describes. Federal agencies regulate air emissions, operations on federal and tribal land and pipeline safety. Engineers who sign engineering documents must hold a professional engineering license from the state board and follow its rules of conduct, which put public health and safety first.

Throughout the course, each lesson ends with practice questions, and the quiz checks the key ideas. The worked examples use Prairie Crest's data so that the numbers connect from lesson to lesson: the oil in place estimated in Lesson 7 feeds the economics in Lesson 10, and the wells drilled in Lesson 5 are the ones abandoned in Lesson 11.