What is 'Oil Field'

An oil field is a tract of land used for extracting petroleum, or crude oil, from the ground. Although the exact origin of oil is still contested, most consider petroleum a fossil fuel created from dead organic material often found in ancient sea beds thousands of meters below the surface of the earth.

BREAKING DOWN 'Oil Field'

An oil field consists of a reservoir in a shape that will trap hydrocarbons and that is covered by an impermeable or sealing rock. Typically, industry professionals use the term with an implied assumption of economic size. There are more than 65,000 oil fields around the world, many of the largest of which are found in the Middle East. While tens of thousands of oil fields have been discovered, 94 percent of known oil is concentrated in fewer than 1500 major oil fields. The locations of oil fields have been the origin of past geopolitical conflicts and environmental concerns.

Establishing an oil field can be a herculean feat of logistics and can include establishing the infrastructure necessary for what can be decades of extraction, production, and maintenance. Oil companies often contain entire divisions that are responsible for infrastructure construction and specialized services that are required to operate a profitable oil field. Oil fields are commonly dotted with a variety of extraction equipment which includes drilling rigs, offshore platforms, pumping jacks, and more. There may also be exploratory wells probing the edges, pipelines to transport the oil elsewhere, and support facilities.

New technologies in oil exploration and production have dramatically increased the productivity levels of oil fields in recent years. These include horizontal drilling, hydraulic drilling, hydraulic fracturing (known as ‘fracking’), and the use of proppant (a mixture of water and sand used to keep the fractured pathways to the wellbore clear). These technologies, coupled with advances such as seismic technology, helped to increase oil field efficiency rates and contributed to a glut in oil supply, which drove oil prices down. Companies that work oil fields remain focused on technological development to lower their production costs in the current price-pressured environment.

Example of an Oil Field

Ghawar Field in Saudi Arabia, which started production in 1951, is by far the largest oil field uncovered so far, having yielded about 60 billion barrels of "black gold" through 2005. There are also offshore oil fields, and the Safaniya field is the world's largest. Located in the Persian Gulf off the Saudi Arabian coast, the Safaniya field is thought to hold more than 50 billion barrels of oil.

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