Marketplace

Oil Exploration Company

An oil exploration company is a company that identifies a potentially viable piece of land for oil drilling. Oil exploration is the first step in the process of getting the oil out of the ground for processing to be used by businesses and consumers. The company finds the potential oil drilling sites, and then hires a contractor for the drilling. The oil exploration company must take the price of oil, the demand and supply of oil, availability of technology, and regulations in the oil industry into account when making the decision to drill.

Once the company has located a potential site for drilling, a number of geological tests are conducted to verify the presence of oil. The geophysicist will conduct a seismic mapping test that will help locate the oil reservoir. The other tests can include gravitational test and an electromagnetic test to further compliment the results obtained from the seismic testing. These tests can be done on oil sites that are offshore and onshore. The results from the tests are entered into an oil exploration software program to be processed. The software will help the engineers at the oil exploration company decide the exact location and the path that needs to be taken when the drilling starts. The company will also use the results to determine the estimated amount of oil that is in the reservoir and the expected life of the reservoir.

When the presence of oil is proven, the oil exploration company will then hire drilling contractors to begin an exploratory drill. The exploratory drill will be the physical proof of the existence of oil. Drilling is a very costly venture, which is a reason why drilling expeditions are undertaken by large oil companies or governments.

The oil exploration company provides accommodations, salaries, food, and equipment to the work crews. They are responsible for getting the legal clearance for drilling and for negotiating contracts that spreads the risk of investment in the oil well among the multiple parties that are involved. The company must be cognizant of land titles and taxes levied on the land and oil extracted. All oil that is extracted is held by the oil exploration company as assets.

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