Factors determining a valuable crude oil deposits Location of the reservoir: its depth, and the hardness of the source rock layers. These factors determine the oil extraction costs. Size of the reservoir: the number of barrels of oil that can be recovered together with the prevailing crude oil price give an indication of the amount of money that can be obtained from selling the oil. Quality of the oil: is also an important consideration. Chemical composition of oil is major indicator for the quality of an oil. Another question is how easily oil can be obtained from the ground. Does it flow readily or will expensive recovery methods be needed??

Petroleum Utilization Mostly used by volume for producing fuel oil and petrol 84% of petroleum is refined into various fuel products (gasoline, kerosene, diesel fuel, fuel oils). A very small remaining fraction (16%) is used to produce chemicals, petrochemicals; (pharmaceuticals, cosmetics, plastics, detergents and textiles, etc). 2

Petroleum delivered from well field Water washing to remove impurities Distillation to separate by boiling point ranges Conversion reactions to alter molecular structures Mixing to obtain maximum commercial characteristics

Global Value Chains The oil industry has three levels: Upstream Midstream Downstream The upstream level includes the exploration, drilling, and production of crude oil. The midstream level includes the transportation and trading of crude oil to refineries. The downstream level refers to the refining of crude oil into finished product, the storage of crude oil, and the distribution and marketing of crude oil to wholesalers and retailers.

Global Value Chains

Problems with crude oil Boardworks GCSE Science: Chemistry Making Oil Useful Crude oil is extremely useful but it has several drawbacks: Burning the products of crude oil as fuel produces gases and particles that contribute to global warming and air pollution. Removing oil from the ground, as well as oil spillages and slicks, can be very damaging to wildlife and the environment. Photo credit: Jesper Markward Olsen The high value of oil means it is sometimes the cause of military conflict, especially because a large amount of oil comes from countries that are politically unstable. 6

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