exploring oil data linked
DESCRIPTION
Exploring Oil Data LinkedTRANSCRIPT
Exploring Oil Data A Reporters Handbook
Contents
Foreword 4Big Data to Play With5Oil and Gas Media14Top 10 Blogs20Top 20 Twitter Feeds25What the Wonks Say29What the Suits Say35Jargon Buster Glossary39
Foreword
Big Data are coming to oil and gas Right now you can see who drilled to what depth in the North Sea last week The Canadian province of Nova Scotia posted geological data it had gathered at a cost of $15 million on the Net to encourage in-vestors who closed eventually with a $900 million commitment The Brazilian com-pany Petrobras is talking of using open source algorithms to increase efficiency of interpretation And its only just beginningAt the level of production and exploration data acquisition has increased exponen-tially and interpretative algorithms by an order of dimension again functions of both Moores Law of processor power and the end of Easy Oil BP hired ships to pro-cess terabytes of data in place when surveying an area of Libyan waters the area of Ireland Oil companies are talking in terms of the Digital Oil Field and satellite im-agery and surveillance aircraft use heat imaging and gravimetric techniques to ex-trapolate information below ground at costs which are dropping by the year Meters measure flows through pipelines to a fraction of a percent across multiple grades of crude oil and transmit their data to a gathering centre in real-time Downstream EITI reports and initiatives such as the Open Government Initiative are beginning to yield data about money flows Dodd-Frank a law passed by the US Congress in 2010 is about to increase the flow of financial reporting by most oil and gas majors exponentially simply to comply with requirements to list on US fin-ancial marketsAnd this is before we get to the growing ability of semantic techniques to mine large public data repositories to establish network graphs of acquaintance or busi-ness interest and the gradual machine-assisted dissolution of the language barrier to distributing such information in dozens of languages around the world And the rising assertiveness of public and transnational civil society empowered to use such technologies to be informed and consulted on decisions and operations that play a large part in determining their economic future At OpenOil we believe these trends predict something that still seems unimagin-able to many today ndash an open oil industry whose profit centre rents and operation -al workings are as visible as other business sectors within a decade For that to happen as much Big Data as possible needs also to become public domain dataThis guide to oil and gas data therefore represents a very modest first step in chronicling that evolution We hope it is useful to all those who need to know about how the global energy infrastructure works
Johnny West
Founder OpenOil
BIG DATA TO PLAY WITH 4
Big Data to Play With
EI Sourcebook
OverviewThe Extractive Industries Sourcebook (EI Sourcebook) established in 2010 is a World Bank funded project in collaboration with the University of Dundee think tanks universit-ies and civil society groups It was estab-lished in parallel with the World Bank funded social network GOXI or Governance of the Extractive Industries (goxiorg) which provides a platform for those working in the field to connect and share ideas and experi-ences The EI Sourcebook draws together expertise on extractives revenue manage-ment from various sources into one compre-hensible document outlining global best practices It is largely aimed at senior gov-
ernment officials and decision makers but will also be of use to civil society activ-ists and journalists The information is split into various streams the basic text of the Chapters inter-views with experts webinars (online explanatory videos) and documents commis-sioned for the Source Book
AccessAvailable directly from the website the EI Sourcebook is frequently updated Follow the Twitter feed for updates on new material added Following peer review it will be available in a downloadable pdf format
Data HighlightsTechnical terms are explained in comprehens-ible terms for the non-specialist and for those wanting to know more about a certain topic the Additional Reading section contains links to much longer and more technical documents often summarised by the authors of the EI Sourcebook The Resources tab on the sidebar contains various source streams divided by country and chapter
WEBSITE wwweisourcebookorg
LANGUAGE FOOTPRINT
en (fr)
HISTORICAL COVERAGE
1949-2011
GEOGRAPHICAL COVERAGE
Global
UPDATES Weekly
TWITTER FEED eisourcebook
5 BIG DATA TO PLAY WITH
Within the chapter text are different types of media such as this diagram which refer-ences an IMF publication on Production Sharing Agreements as well as graphs cre-ated by Sourcebook authors from publicly available data-sets and charts Presenta-tions from partner organisations are made available in embedded slideshows
Pop-up shaded boxes highlight case studies of good practice for example Box 68 which gives easily digested information about Brazils petroleum sector organisa-tion The boxes provide real-world examples of concepts covered as well as further ex-planation of important issues
LOOK OUT FOR
Chapter 3 The Extractive Industries
serves as an introduction to governance of the oil or gas sector the challenges faced by those tasked with governance policies (Section 31) and includes a primer on why sector governance varies so much between countries and between dif-ferent extractive industries (Section 32)
Chapter 5 Policy Legal and Contractual Framework
is a window onto a vast array of contracts and legislation organised by country Such documents can prove difficult to access but can provide useful background for understanding how a countrys oil sector is governed Click on the drop-down Resources menu to see a growing library of oil laws and regulations agreements and model contracts
BIG DATA TO PLAY WITH 6
Energy Information Administration (EIA)
OverviewAs the statistical and analytical agency with-in the US Department of Energy on which many domestic policymakers rely EIA is un-derstandably US-centric The Wednesday morning release of their weekly oil report can move world oil markets A legal safe-guard ensures that EIA materials are pro-duced independently of policy considera-tions but that did not stop the Wall Street Journal from making accusations in 2010 that EIAs data integrity was threatened and its methodologies flawedThe emphasis is on demand supply and prices As well as raw data the EIA pulls to-
gether the figures into easily understandable trends Much analysis focuses on en-ergy issues relevant to the White House such as emerging commodity producers and the unconventional fuels boom in the US The annual flagship publication is the Annual Energy Review (and the International En-ergy Review) But there are also extensive publications aimed at different audiences which you can get delivered by email Stand-outs are the Country Analysis Briefs which give a useful birds eye view on the sector country-by-country and Today in Energy a series of bite-sized articles and charts
AccessThe monthly energy reviews can be downloaded in PDF format MS Excel and CSV To access and search the raw data go to (Geography gt Country gt International En-ergy Statistics)
Highlights
The educational thrust of the agency means that there are plenty of materials to fill in knowledge gaps on issues ranging from the environmental impact of the oil and gas in-dustry to the pros and cons of biofuels In-cluding a welcome energy unit conversion calculator
WEBSITE wwweiagov
LANGUAGE FOOTPRINT
en
HISTORICAL COVERAGE
1949-2011
GEOGRAPHICAL COVERAGE
Global (215 countries)
UPDATES Weeklymonthly
TWITTER FEED EIAgov
7 BIG DATA TO PLAY WITH
How might I use it
SEE AT-A-GLANCE DATA ON A MAP
Lets say what you need is some background information on the reserve or production levels of a certain producing country easily displayed and easy to contrast with sur-rounding nations Going to Geography gt Maps from the homepage will bring up a col-our-coded map of world production con-sumption and reserve levels where you can browse basic statistics
TAKE A CLOSER LOOK
For more in-depth information go to the in-dividual country pages for an at-a-glance overview of the sector in a particular coun-try where you can download the full Coun-try Analysis Briefs (available for 44 countries at time of writing) in PDF format Topics covered include reserves production infra-structure and power generation compete with a full list of sources
PLAY WITH THE DATA
Alternatively to see this data in its raw format see the International Energy Statist-ics tab at the foot of the page and search for data yourself You can browse by fuel in-dicator or by country Data is available on production consumption electricity genera-tion and consumption primary energy and energy intensity Just scroll through the tabs choose CO2 emission imports and ex-ports Just choose your time frame and download in Excel format
BIG DATA TO PLAY WITH 8
BP Statistical Review of World Energy
OverviewIn the companys own words BP has been providing timely and objective data about energy economics since 1951 Indeed as a go-to for up-to-date figures on production and reserve levels in a glossy and easily navigable format the BP Statistical Review is hard to beat What started as an internally circulated document addressing the dearth of information on global oil and gas markets is now quoted by industry publications me-dia and academia Data tables on oil and gas production re-serves prices refining consumption and trade movements are interspersed with col-
ourful graphics and icons as well as sections on coal nuclear hydroelectricity and renewables Commentary sections also help to make the links between this years data and long-term energy trends
AccessReport download-able as PDF (in full or individual sections) or entire workbook as MS Excel file 26-slide packs of Powerpoint slides are even available of charts maps and graphs or infographics
HighlightsFor a 5-minute primer on the events that shook the world over the past year in dazzling infographic format the Energy in Numbers video on the homepage will fill you in or alternatively be talked through it all in a fireside chat with BPs chief eco-nomist
How might I use itThe stack graph to the right is an example of the BP data in action It has been put together by taking the regional totals of carbon dioxide emissions since 1964 The graph structure al-lows both the overall pattern of growing global use and also changing regional trends to emerge such as flattening emissions in Europe and rising emissions in Asia
WEBSITE wwwbpcomstatisticalreview
LANGUAGE FOOTPRINT
en cn
HISTORICAL COVERAGE
1965-2011
GEOGRAPHICAL COVERAGE
Global (48 countries)
UPDATES Annual
TWITTER FEED BP_America
9 BIG DATA TO PLAY WITH
Another use scenario of the BP data is the map to the right The spreadsheet data provided the basis to look at changing energy balances country by country over the last 20 years The countries highlighted are those which have experienced the greatest change for the worse that is to say the greatest increase in oil deficits and are colour-coded according to the amount they need to import
International Energy Agency (IEA)
OverviewThe IEA an influential actor in the gathering and analysis of global energy statistics has been around since 1974 coordinating policy among consumer countries and has come to be known as the consumers OPEC As a data source it is the place to go for an an authoritative source of data on supply transformation and consumption of major energy sources While it may be a less glossy product than the offerings by BP and Eni the IEA does dip its toe into the infographics world with some dynamic maps showing European gas flows and various energy indicators Data sets are
searchable by country region or product or alternatively over 70 publications a year on oil natural gas prices and electricity can be downloaded for free In addi -tion there are 30 priced publications a year released through the online bookshop on paper PDF or CD-ROMThe IEAs Energy Statistics Manual is available in nine languages and is a good primer to help sift through some of the jargon used in the data sets themselves
AccessAccessible online or archived monthly surveys downloadable free of charge in PDF or MS Excel format (see Publicationssurveys free for download under Statistics tab)The IEA also offers an online data service either using novel pay-per-view data cards or on a more standard annual subscription (1000 Data Points come in at euro45 while an annual subscription to the complete World Energy Statistics and Bal-ances is priced at euro1400) The data service makes use of the Beyond 2020 browser for easier manipulation of multi-dimensional data and creation of personalised
WEBSITE wwwieaorgstats
LANGUAGE FOOTPRINT
en ru cn
HISTORICAL COVERAGE
Archives available 1999-date
GEOGRAPHICAL COVERAGE
34 countries (OECD) and 154 (non-OECD)
UPDATES Monthly
TWITTER FEED IEA
BIG DATA TO PLAY WITH 10
spreadsheets
HighlightsThe 82-page pocket-sized book of Key World Energy Statistics is aimed precisely at non-specialist businessmen journalists and students and means you need never be without an an answer to those tricky questions about net Angolan energy exports The pocket guide contains a series of easy-to-grasp data tables and graphs The energy unit converter and glossary of acronyms abbreviations and units of measurement are also thoughtful touches for anyone who has grappled with the distinctions between bcm gce and gCO2kWh
How might I use itThe IEAs freely available document on petroleum product prices (in either PDF or Excel format) uses the data collected by the organisation and pulls it into the fol-lowing graphs to compare price fluctuations in both gasoline and fuel oil split by region between 2009-2012 In this case the dotted line repres-ents Japanese gasoline prices the line at the top represents Europe and line at the bottom North America Prices charged for the various products which can be produced out of crude oil can vary depending on geographical political and other factors and by doing the legwork for us the EIA demonstrates how these differences show themselves in the case of gasoline The graphs source document contains similar visualisa-tions for data around diesel domest-ic heating oil and fuel oil for in-dustryFurther down the document the full data to back up the graphical representations are available in table form The raw data corroborate with the graph with average gasoline prices in the five European countries showing somewhat higher than prices in Japan and significantly higher than in Canada and the United States
11 BIG DATA TO PLAY WITH
World Bank Databank
OverviewWithin the remit of the World Bank Open Data Initiative the bank is on a mission to improve access to the data it collects and collates Truly impressive in scope and lan-guage footprint their comprehensive data repository is a real treasure trove of free-of-charge data and a valuable tool to support research by journalists Of the 1200 indicat-ors available to browse Energy and Mining is designated as one of the key topic covered under which data can be pulled up on GDP per unit of energy use of nucle-ar and alternative energy and pump price for gasoline ($) to name but a few These can be bulk downloaded as an Excel file to
be played with or viewed as a series of ready-made graphs on the site itself Indic-ators come with useful notes to help clarify their meaning However where the site comes into its own is the vast DataBank resource which al-lows users to make customised data requests and view these made-to-measure data sets in table chart or map form The slick new interface designed for DataBank comes complete with an equally slick step-by-step tutorial to help you navigate your way through the vast data sets available Once you have signed up and re-ceived your login details you are free to save any of your creations to go back and admire in the future
AccessA whole menu of options are available at the World Bank site take your pick 1 download bulk data sets by country topic or specific indicator 2 grab a widget or snippets of code to embed on a website for automatically
updated living data 3 use the web API to create custom visualisations and mashups 4 access the full Databank for customised queries and selected datasets
HighlightsThe opportunities for tailor-making your own data-sets using the World Bank tools go far beyond the options on other sites And true to the spirit of data journalism which maintains that visual images give us a deeper understanding of information the tool allows for the quick and easy creation of a wide range of charts and map-ping options Spotting global energy trends has never been so much fun
WEBSITE wwwdataworldbankorg
LANGUAGE FOOTPRINT
en es fr ar cn
HISTORICAL COVERAGE
1960-date
GEOGRAPHICAL COVERAGE
Global (214 countries)
UPDATES Annual
TWITTER FEED worldbankdata
BIG DATA TO PLAY WITH 12
How might I use itVisualisations demonstrate World Bank data in action
A map identifying the worlds top 10 energy using countries per capita (in green) and the bottom 10 (in blue) Using the energy use per person indicator gives a vivid picture of energy access and poverty
Energy productivity has soared around the world in the last few decades in re-sponse to rising fuel prices as this graph shows But there are some notable excep-tions While efficiency has increased 80 in North America it has stayed constant in Africa and dropped considerably in the Middle East
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
Contents
Foreword 4Big Data to Play With5Oil and Gas Media14Top 10 Blogs20Top 20 Twitter Feeds25What the Wonks Say29What the Suits Say35Jargon Buster Glossary39
Foreword
Big Data are coming to oil and gas Right now you can see who drilled to what depth in the North Sea last week The Canadian province of Nova Scotia posted geological data it had gathered at a cost of $15 million on the Net to encourage in-vestors who closed eventually with a $900 million commitment The Brazilian com-pany Petrobras is talking of using open source algorithms to increase efficiency of interpretation And its only just beginningAt the level of production and exploration data acquisition has increased exponen-tially and interpretative algorithms by an order of dimension again functions of both Moores Law of processor power and the end of Easy Oil BP hired ships to pro-cess terabytes of data in place when surveying an area of Libyan waters the area of Ireland Oil companies are talking in terms of the Digital Oil Field and satellite im-agery and surveillance aircraft use heat imaging and gravimetric techniques to ex-trapolate information below ground at costs which are dropping by the year Meters measure flows through pipelines to a fraction of a percent across multiple grades of crude oil and transmit their data to a gathering centre in real-time Downstream EITI reports and initiatives such as the Open Government Initiative are beginning to yield data about money flows Dodd-Frank a law passed by the US Congress in 2010 is about to increase the flow of financial reporting by most oil and gas majors exponentially simply to comply with requirements to list on US fin-ancial marketsAnd this is before we get to the growing ability of semantic techniques to mine large public data repositories to establish network graphs of acquaintance or busi-ness interest and the gradual machine-assisted dissolution of the language barrier to distributing such information in dozens of languages around the world And the rising assertiveness of public and transnational civil society empowered to use such technologies to be informed and consulted on decisions and operations that play a large part in determining their economic future At OpenOil we believe these trends predict something that still seems unimagin-able to many today ndash an open oil industry whose profit centre rents and operation -al workings are as visible as other business sectors within a decade For that to happen as much Big Data as possible needs also to become public domain dataThis guide to oil and gas data therefore represents a very modest first step in chronicling that evolution We hope it is useful to all those who need to know about how the global energy infrastructure works
Johnny West
Founder OpenOil
BIG DATA TO PLAY WITH 4
Big Data to Play With
EI Sourcebook
OverviewThe Extractive Industries Sourcebook (EI Sourcebook) established in 2010 is a World Bank funded project in collaboration with the University of Dundee think tanks universit-ies and civil society groups It was estab-lished in parallel with the World Bank funded social network GOXI or Governance of the Extractive Industries (goxiorg) which provides a platform for those working in the field to connect and share ideas and experi-ences The EI Sourcebook draws together expertise on extractives revenue manage-ment from various sources into one compre-hensible document outlining global best practices It is largely aimed at senior gov-
ernment officials and decision makers but will also be of use to civil society activ-ists and journalists The information is split into various streams the basic text of the Chapters inter-views with experts webinars (online explanatory videos) and documents commis-sioned for the Source Book
AccessAvailable directly from the website the EI Sourcebook is frequently updated Follow the Twitter feed for updates on new material added Following peer review it will be available in a downloadable pdf format
Data HighlightsTechnical terms are explained in comprehens-ible terms for the non-specialist and for those wanting to know more about a certain topic the Additional Reading section contains links to much longer and more technical documents often summarised by the authors of the EI Sourcebook The Resources tab on the sidebar contains various source streams divided by country and chapter
WEBSITE wwweisourcebookorg
LANGUAGE FOOTPRINT
en (fr)
HISTORICAL COVERAGE
1949-2011
GEOGRAPHICAL COVERAGE
Global
UPDATES Weekly
TWITTER FEED eisourcebook
5 BIG DATA TO PLAY WITH
Within the chapter text are different types of media such as this diagram which refer-ences an IMF publication on Production Sharing Agreements as well as graphs cre-ated by Sourcebook authors from publicly available data-sets and charts Presenta-tions from partner organisations are made available in embedded slideshows
Pop-up shaded boxes highlight case studies of good practice for example Box 68 which gives easily digested information about Brazils petroleum sector organisa-tion The boxes provide real-world examples of concepts covered as well as further ex-planation of important issues
LOOK OUT FOR
Chapter 3 The Extractive Industries
serves as an introduction to governance of the oil or gas sector the challenges faced by those tasked with governance policies (Section 31) and includes a primer on why sector governance varies so much between countries and between dif-ferent extractive industries (Section 32)
Chapter 5 Policy Legal and Contractual Framework
is a window onto a vast array of contracts and legislation organised by country Such documents can prove difficult to access but can provide useful background for understanding how a countrys oil sector is governed Click on the drop-down Resources menu to see a growing library of oil laws and regulations agreements and model contracts
BIG DATA TO PLAY WITH 6
Energy Information Administration (EIA)
OverviewAs the statistical and analytical agency with-in the US Department of Energy on which many domestic policymakers rely EIA is un-derstandably US-centric The Wednesday morning release of their weekly oil report can move world oil markets A legal safe-guard ensures that EIA materials are pro-duced independently of policy considera-tions but that did not stop the Wall Street Journal from making accusations in 2010 that EIAs data integrity was threatened and its methodologies flawedThe emphasis is on demand supply and prices As well as raw data the EIA pulls to-
gether the figures into easily understandable trends Much analysis focuses on en-ergy issues relevant to the White House such as emerging commodity producers and the unconventional fuels boom in the US The annual flagship publication is the Annual Energy Review (and the International En-ergy Review) But there are also extensive publications aimed at different audiences which you can get delivered by email Stand-outs are the Country Analysis Briefs which give a useful birds eye view on the sector country-by-country and Today in Energy a series of bite-sized articles and charts
AccessThe monthly energy reviews can be downloaded in PDF format MS Excel and CSV To access and search the raw data go to (Geography gt Country gt International En-ergy Statistics)
Highlights
The educational thrust of the agency means that there are plenty of materials to fill in knowledge gaps on issues ranging from the environmental impact of the oil and gas in-dustry to the pros and cons of biofuels In-cluding a welcome energy unit conversion calculator
WEBSITE wwweiagov
LANGUAGE FOOTPRINT
en
HISTORICAL COVERAGE
1949-2011
GEOGRAPHICAL COVERAGE
Global (215 countries)
UPDATES Weeklymonthly
TWITTER FEED EIAgov
7 BIG DATA TO PLAY WITH
How might I use it
SEE AT-A-GLANCE DATA ON A MAP
Lets say what you need is some background information on the reserve or production levels of a certain producing country easily displayed and easy to contrast with sur-rounding nations Going to Geography gt Maps from the homepage will bring up a col-our-coded map of world production con-sumption and reserve levels where you can browse basic statistics
TAKE A CLOSER LOOK
For more in-depth information go to the in-dividual country pages for an at-a-glance overview of the sector in a particular coun-try where you can download the full Coun-try Analysis Briefs (available for 44 countries at time of writing) in PDF format Topics covered include reserves production infra-structure and power generation compete with a full list of sources
PLAY WITH THE DATA
Alternatively to see this data in its raw format see the International Energy Statist-ics tab at the foot of the page and search for data yourself You can browse by fuel in-dicator or by country Data is available on production consumption electricity genera-tion and consumption primary energy and energy intensity Just scroll through the tabs choose CO2 emission imports and ex-ports Just choose your time frame and download in Excel format
BIG DATA TO PLAY WITH 8
BP Statistical Review of World Energy
OverviewIn the companys own words BP has been providing timely and objective data about energy economics since 1951 Indeed as a go-to for up-to-date figures on production and reserve levels in a glossy and easily navigable format the BP Statistical Review is hard to beat What started as an internally circulated document addressing the dearth of information on global oil and gas markets is now quoted by industry publications me-dia and academia Data tables on oil and gas production re-serves prices refining consumption and trade movements are interspersed with col-
ourful graphics and icons as well as sections on coal nuclear hydroelectricity and renewables Commentary sections also help to make the links between this years data and long-term energy trends
AccessReport download-able as PDF (in full or individual sections) or entire workbook as MS Excel file 26-slide packs of Powerpoint slides are even available of charts maps and graphs or infographics
HighlightsFor a 5-minute primer on the events that shook the world over the past year in dazzling infographic format the Energy in Numbers video on the homepage will fill you in or alternatively be talked through it all in a fireside chat with BPs chief eco-nomist
How might I use itThe stack graph to the right is an example of the BP data in action It has been put together by taking the regional totals of carbon dioxide emissions since 1964 The graph structure al-lows both the overall pattern of growing global use and also changing regional trends to emerge such as flattening emissions in Europe and rising emissions in Asia
WEBSITE wwwbpcomstatisticalreview
LANGUAGE FOOTPRINT
en cn
HISTORICAL COVERAGE
1965-2011
GEOGRAPHICAL COVERAGE
Global (48 countries)
UPDATES Annual
TWITTER FEED BP_America
9 BIG DATA TO PLAY WITH
Another use scenario of the BP data is the map to the right The spreadsheet data provided the basis to look at changing energy balances country by country over the last 20 years The countries highlighted are those which have experienced the greatest change for the worse that is to say the greatest increase in oil deficits and are colour-coded according to the amount they need to import
International Energy Agency (IEA)
OverviewThe IEA an influential actor in the gathering and analysis of global energy statistics has been around since 1974 coordinating policy among consumer countries and has come to be known as the consumers OPEC As a data source it is the place to go for an an authoritative source of data on supply transformation and consumption of major energy sources While it may be a less glossy product than the offerings by BP and Eni the IEA does dip its toe into the infographics world with some dynamic maps showing European gas flows and various energy indicators Data sets are
searchable by country region or product or alternatively over 70 publications a year on oil natural gas prices and electricity can be downloaded for free In addi -tion there are 30 priced publications a year released through the online bookshop on paper PDF or CD-ROMThe IEAs Energy Statistics Manual is available in nine languages and is a good primer to help sift through some of the jargon used in the data sets themselves
AccessAccessible online or archived monthly surveys downloadable free of charge in PDF or MS Excel format (see Publicationssurveys free for download under Statistics tab)The IEA also offers an online data service either using novel pay-per-view data cards or on a more standard annual subscription (1000 Data Points come in at euro45 while an annual subscription to the complete World Energy Statistics and Bal-ances is priced at euro1400) The data service makes use of the Beyond 2020 browser for easier manipulation of multi-dimensional data and creation of personalised
WEBSITE wwwieaorgstats
LANGUAGE FOOTPRINT
en ru cn
HISTORICAL COVERAGE
Archives available 1999-date
GEOGRAPHICAL COVERAGE
34 countries (OECD) and 154 (non-OECD)
UPDATES Monthly
TWITTER FEED IEA
BIG DATA TO PLAY WITH 10
spreadsheets
HighlightsThe 82-page pocket-sized book of Key World Energy Statistics is aimed precisely at non-specialist businessmen journalists and students and means you need never be without an an answer to those tricky questions about net Angolan energy exports The pocket guide contains a series of easy-to-grasp data tables and graphs The energy unit converter and glossary of acronyms abbreviations and units of measurement are also thoughtful touches for anyone who has grappled with the distinctions between bcm gce and gCO2kWh
How might I use itThe IEAs freely available document on petroleum product prices (in either PDF or Excel format) uses the data collected by the organisation and pulls it into the fol-lowing graphs to compare price fluctuations in both gasoline and fuel oil split by region between 2009-2012 In this case the dotted line repres-ents Japanese gasoline prices the line at the top represents Europe and line at the bottom North America Prices charged for the various products which can be produced out of crude oil can vary depending on geographical political and other factors and by doing the legwork for us the EIA demonstrates how these differences show themselves in the case of gasoline The graphs source document contains similar visualisa-tions for data around diesel domest-ic heating oil and fuel oil for in-dustryFurther down the document the full data to back up the graphical representations are available in table form The raw data corroborate with the graph with average gasoline prices in the five European countries showing somewhat higher than prices in Japan and significantly higher than in Canada and the United States
11 BIG DATA TO PLAY WITH
World Bank Databank
OverviewWithin the remit of the World Bank Open Data Initiative the bank is on a mission to improve access to the data it collects and collates Truly impressive in scope and lan-guage footprint their comprehensive data repository is a real treasure trove of free-of-charge data and a valuable tool to support research by journalists Of the 1200 indicat-ors available to browse Energy and Mining is designated as one of the key topic covered under which data can be pulled up on GDP per unit of energy use of nucle-ar and alternative energy and pump price for gasoline ($) to name but a few These can be bulk downloaded as an Excel file to
be played with or viewed as a series of ready-made graphs on the site itself Indic-ators come with useful notes to help clarify their meaning However where the site comes into its own is the vast DataBank resource which al-lows users to make customised data requests and view these made-to-measure data sets in table chart or map form The slick new interface designed for DataBank comes complete with an equally slick step-by-step tutorial to help you navigate your way through the vast data sets available Once you have signed up and re-ceived your login details you are free to save any of your creations to go back and admire in the future
AccessA whole menu of options are available at the World Bank site take your pick 1 download bulk data sets by country topic or specific indicator 2 grab a widget or snippets of code to embed on a website for automatically
updated living data 3 use the web API to create custom visualisations and mashups 4 access the full Databank for customised queries and selected datasets
HighlightsThe opportunities for tailor-making your own data-sets using the World Bank tools go far beyond the options on other sites And true to the spirit of data journalism which maintains that visual images give us a deeper understanding of information the tool allows for the quick and easy creation of a wide range of charts and map-ping options Spotting global energy trends has never been so much fun
WEBSITE wwwdataworldbankorg
LANGUAGE FOOTPRINT
en es fr ar cn
HISTORICAL COVERAGE
1960-date
GEOGRAPHICAL COVERAGE
Global (214 countries)
UPDATES Annual
TWITTER FEED worldbankdata
BIG DATA TO PLAY WITH 12
How might I use itVisualisations demonstrate World Bank data in action
A map identifying the worlds top 10 energy using countries per capita (in green) and the bottom 10 (in blue) Using the energy use per person indicator gives a vivid picture of energy access and poverty
Energy productivity has soared around the world in the last few decades in re-sponse to rising fuel prices as this graph shows But there are some notable excep-tions While efficiency has increased 80 in North America it has stayed constant in Africa and dropped considerably in the Middle East
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
Foreword
Big Data are coming to oil and gas Right now you can see who drilled to what depth in the North Sea last week The Canadian province of Nova Scotia posted geological data it had gathered at a cost of $15 million on the Net to encourage in-vestors who closed eventually with a $900 million commitment The Brazilian com-pany Petrobras is talking of using open source algorithms to increase efficiency of interpretation And its only just beginningAt the level of production and exploration data acquisition has increased exponen-tially and interpretative algorithms by an order of dimension again functions of both Moores Law of processor power and the end of Easy Oil BP hired ships to pro-cess terabytes of data in place when surveying an area of Libyan waters the area of Ireland Oil companies are talking in terms of the Digital Oil Field and satellite im-agery and surveillance aircraft use heat imaging and gravimetric techniques to ex-trapolate information below ground at costs which are dropping by the year Meters measure flows through pipelines to a fraction of a percent across multiple grades of crude oil and transmit their data to a gathering centre in real-time Downstream EITI reports and initiatives such as the Open Government Initiative are beginning to yield data about money flows Dodd-Frank a law passed by the US Congress in 2010 is about to increase the flow of financial reporting by most oil and gas majors exponentially simply to comply with requirements to list on US fin-ancial marketsAnd this is before we get to the growing ability of semantic techniques to mine large public data repositories to establish network graphs of acquaintance or busi-ness interest and the gradual machine-assisted dissolution of the language barrier to distributing such information in dozens of languages around the world And the rising assertiveness of public and transnational civil society empowered to use such technologies to be informed and consulted on decisions and operations that play a large part in determining their economic future At OpenOil we believe these trends predict something that still seems unimagin-able to many today ndash an open oil industry whose profit centre rents and operation -al workings are as visible as other business sectors within a decade For that to happen as much Big Data as possible needs also to become public domain dataThis guide to oil and gas data therefore represents a very modest first step in chronicling that evolution We hope it is useful to all those who need to know about how the global energy infrastructure works
Johnny West
Founder OpenOil
BIG DATA TO PLAY WITH 4
Big Data to Play With
EI Sourcebook
OverviewThe Extractive Industries Sourcebook (EI Sourcebook) established in 2010 is a World Bank funded project in collaboration with the University of Dundee think tanks universit-ies and civil society groups It was estab-lished in parallel with the World Bank funded social network GOXI or Governance of the Extractive Industries (goxiorg) which provides a platform for those working in the field to connect and share ideas and experi-ences The EI Sourcebook draws together expertise on extractives revenue manage-ment from various sources into one compre-hensible document outlining global best practices It is largely aimed at senior gov-
ernment officials and decision makers but will also be of use to civil society activ-ists and journalists The information is split into various streams the basic text of the Chapters inter-views with experts webinars (online explanatory videos) and documents commis-sioned for the Source Book
AccessAvailable directly from the website the EI Sourcebook is frequently updated Follow the Twitter feed for updates on new material added Following peer review it will be available in a downloadable pdf format
Data HighlightsTechnical terms are explained in comprehens-ible terms for the non-specialist and for those wanting to know more about a certain topic the Additional Reading section contains links to much longer and more technical documents often summarised by the authors of the EI Sourcebook The Resources tab on the sidebar contains various source streams divided by country and chapter
WEBSITE wwweisourcebookorg
LANGUAGE FOOTPRINT
en (fr)
HISTORICAL COVERAGE
1949-2011
GEOGRAPHICAL COVERAGE
Global
UPDATES Weekly
TWITTER FEED eisourcebook
5 BIG DATA TO PLAY WITH
Within the chapter text are different types of media such as this diagram which refer-ences an IMF publication on Production Sharing Agreements as well as graphs cre-ated by Sourcebook authors from publicly available data-sets and charts Presenta-tions from partner organisations are made available in embedded slideshows
Pop-up shaded boxes highlight case studies of good practice for example Box 68 which gives easily digested information about Brazils petroleum sector organisa-tion The boxes provide real-world examples of concepts covered as well as further ex-planation of important issues
LOOK OUT FOR
Chapter 3 The Extractive Industries
serves as an introduction to governance of the oil or gas sector the challenges faced by those tasked with governance policies (Section 31) and includes a primer on why sector governance varies so much between countries and between dif-ferent extractive industries (Section 32)
Chapter 5 Policy Legal and Contractual Framework
is a window onto a vast array of contracts and legislation organised by country Such documents can prove difficult to access but can provide useful background for understanding how a countrys oil sector is governed Click on the drop-down Resources menu to see a growing library of oil laws and regulations agreements and model contracts
BIG DATA TO PLAY WITH 6
Energy Information Administration (EIA)
OverviewAs the statistical and analytical agency with-in the US Department of Energy on which many domestic policymakers rely EIA is un-derstandably US-centric The Wednesday morning release of their weekly oil report can move world oil markets A legal safe-guard ensures that EIA materials are pro-duced independently of policy considera-tions but that did not stop the Wall Street Journal from making accusations in 2010 that EIAs data integrity was threatened and its methodologies flawedThe emphasis is on demand supply and prices As well as raw data the EIA pulls to-
gether the figures into easily understandable trends Much analysis focuses on en-ergy issues relevant to the White House such as emerging commodity producers and the unconventional fuels boom in the US The annual flagship publication is the Annual Energy Review (and the International En-ergy Review) But there are also extensive publications aimed at different audiences which you can get delivered by email Stand-outs are the Country Analysis Briefs which give a useful birds eye view on the sector country-by-country and Today in Energy a series of bite-sized articles and charts
AccessThe monthly energy reviews can be downloaded in PDF format MS Excel and CSV To access and search the raw data go to (Geography gt Country gt International En-ergy Statistics)
Highlights
The educational thrust of the agency means that there are plenty of materials to fill in knowledge gaps on issues ranging from the environmental impact of the oil and gas in-dustry to the pros and cons of biofuels In-cluding a welcome energy unit conversion calculator
WEBSITE wwweiagov
LANGUAGE FOOTPRINT
en
HISTORICAL COVERAGE
1949-2011
GEOGRAPHICAL COVERAGE
Global (215 countries)
UPDATES Weeklymonthly
TWITTER FEED EIAgov
7 BIG DATA TO PLAY WITH
How might I use it
SEE AT-A-GLANCE DATA ON A MAP
Lets say what you need is some background information on the reserve or production levels of a certain producing country easily displayed and easy to contrast with sur-rounding nations Going to Geography gt Maps from the homepage will bring up a col-our-coded map of world production con-sumption and reserve levels where you can browse basic statistics
TAKE A CLOSER LOOK
For more in-depth information go to the in-dividual country pages for an at-a-glance overview of the sector in a particular coun-try where you can download the full Coun-try Analysis Briefs (available for 44 countries at time of writing) in PDF format Topics covered include reserves production infra-structure and power generation compete with a full list of sources
PLAY WITH THE DATA
Alternatively to see this data in its raw format see the International Energy Statist-ics tab at the foot of the page and search for data yourself You can browse by fuel in-dicator or by country Data is available on production consumption electricity genera-tion and consumption primary energy and energy intensity Just scroll through the tabs choose CO2 emission imports and ex-ports Just choose your time frame and download in Excel format
BIG DATA TO PLAY WITH 8
BP Statistical Review of World Energy
OverviewIn the companys own words BP has been providing timely and objective data about energy economics since 1951 Indeed as a go-to for up-to-date figures on production and reserve levels in a glossy and easily navigable format the BP Statistical Review is hard to beat What started as an internally circulated document addressing the dearth of information on global oil and gas markets is now quoted by industry publications me-dia and academia Data tables on oil and gas production re-serves prices refining consumption and trade movements are interspersed with col-
ourful graphics and icons as well as sections on coal nuclear hydroelectricity and renewables Commentary sections also help to make the links between this years data and long-term energy trends
AccessReport download-able as PDF (in full or individual sections) or entire workbook as MS Excel file 26-slide packs of Powerpoint slides are even available of charts maps and graphs or infographics
HighlightsFor a 5-minute primer on the events that shook the world over the past year in dazzling infographic format the Energy in Numbers video on the homepage will fill you in or alternatively be talked through it all in a fireside chat with BPs chief eco-nomist
How might I use itThe stack graph to the right is an example of the BP data in action It has been put together by taking the regional totals of carbon dioxide emissions since 1964 The graph structure al-lows both the overall pattern of growing global use and also changing regional trends to emerge such as flattening emissions in Europe and rising emissions in Asia
WEBSITE wwwbpcomstatisticalreview
LANGUAGE FOOTPRINT
en cn
HISTORICAL COVERAGE
1965-2011
GEOGRAPHICAL COVERAGE
Global (48 countries)
UPDATES Annual
TWITTER FEED BP_America
9 BIG DATA TO PLAY WITH
Another use scenario of the BP data is the map to the right The spreadsheet data provided the basis to look at changing energy balances country by country over the last 20 years The countries highlighted are those which have experienced the greatest change for the worse that is to say the greatest increase in oil deficits and are colour-coded according to the amount they need to import
International Energy Agency (IEA)
OverviewThe IEA an influential actor in the gathering and analysis of global energy statistics has been around since 1974 coordinating policy among consumer countries and has come to be known as the consumers OPEC As a data source it is the place to go for an an authoritative source of data on supply transformation and consumption of major energy sources While it may be a less glossy product than the offerings by BP and Eni the IEA does dip its toe into the infographics world with some dynamic maps showing European gas flows and various energy indicators Data sets are
searchable by country region or product or alternatively over 70 publications a year on oil natural gas prices and electricity can be downloaded for free In addi -tion there are 30 priced publications a year released through the online bookshop on paper PDF or CD-ROMThe IEAs Energy Statistics Manual is available in nine languages and is a good primer to help sift through some of the jargon used in the data sets themselves
AccessAccessible online or archived monthly surveys downloadable free of charge in PDF or MS Excel format (see Publicationssurveys free for download under Statistics tab)The IEA also offers an online data service either using novel pay-per-view data cards or on a more standard annual subscription (1000 Data Points come in at euro45 while an annual subscription to the complete World Energy Statistics and Bal-ances is priced at euro1400) The data service makes use of the Beyond 2020 browser for easier manipulation of multi-dimensional data and creation of personalised
WEBSITE wwwieaorgstats
LANGUAGE FOOTPRINT
en ru cn
HISTORICAL COVERAGE
Archives available 1999-date
GEOGRAPHICAL COVERAGE
34 countries (OECD) and 154 (non-OECD)
UPDATES Monthly
TWITTER FEED IEA
BIG DATA TO PLAY WITH 10
spreadsheets
HighlightsThe 82-page pocket-sized book of Key World Energy Statistics is aimed precisely at non-specialist businessmen journalists and students and means you need never be without an an answer to those tricky questions about net Angolan energy exports The pocket guide contains a series of easy-to-grasp data tables and graphs The energy unit converter and glossary of acronyms abbreviations and units of measurement are also thoughtful touches for anyone who has grappled with the distinctions between bcm gce and gCO2kWh
How might I use itThe IEAs freely available document on petroleum product prices (in either PDF or Excel format) uses the data collected by the organisation and pulls it into the fol-lowing graphs to compare price fluctuations in both gasoline and fuel oil split by region between 2009-2012 In this case the dotted line repres-ents Japanese gasoline prices the line at the top represents Europe and line at the bottom North America Prices charged for the various products which can be produced out of crude oil can vary depending on geographical political and other factors and by doing the legwork for us the EIA demonstrates how these differences show themselves in the case of gasoline The graphs source document contains similar visualisa-tions for data around diesel domest-ic heating oil and fuel oil for in-dustryFurther down the document the full data to back up the graphical representations are available in table form The raw data corroborate with the graph with average gasoline prices in the five European countries showing somewhat higher than prices in Japan and significantly higher than in Canada and the United States
11 BIG DATA TO PLAY WITH
World Bank Databank
OverviewWithin the remit of the World Bank Open Data Initiative the bank is on a mission to improve access to the data it collects and collates Truly impressive in scope and lan-guage footprint their comprehensive data repository is a real treasure trove of free-of-charge data and a valuable tool to support research by journalists Of the 1200 indicat-ors available to browse Energy and Mining is designated as one of the key topic covered under which data can be pulled up on GDP per unit of energy use of nucle-ar and alternative energy and pump price for gasoline ($) to name but a few These can be bulk downloaded as an Excel file to
be played with or viewed as a series of ready-made graphs on the site itself Indic-ators come with useful notes to help clarify their meaning However where the site comes into its own is the vast DataBank resource which al-lows users to make customised data requests and view these made-to-measure data sets in table chart or map form The slick new interface designed for DataBank comes complete with an equally slick step-by-step tutorial to help you navigate your way through the vast data sets available Once you have signed up and re-ceived your login details you are free to save any of your creations to go back and admire in the future
AccessA whole menu of options are available at the World Bank site take your pick 1 download bulk data sets by country topic or specific indicator 2 grab a widget or snippets of code to embed on a website for automatically
updated living data 3 use the web API to create custom visualisations and mashups 4 access the full Databank for customised queries and selected datasets
HighlightsThe opportunities for tailor-making your own data-sets using the World Bank tools go far beyond the options on other sites And true to the spirit of data journalism which maintains that visual images give us a deeper understanding of information the tool allows for the quick and easy creation of a wide range of charts and map-ping options Spotting global energy trends has never been so much fun
WEBSITE wwwdataworldbankorg
LANGUAGE FOOTPRINT
en es fr ar cn
HISTORICAL COVERAGE
1960-date
GEOGRAPHICAL COVERAGE
Global (214 countries)
UPDATES Annual
TWITTER FEED worldbankdata
BIG DATA TO PLAY WITH 12
How might I use itVisualisations demonstrate World Bank data in action
A map identifying the worlds top 10 energy using countries per capita (in green) and the bottom 10 (in blue) Using the energy use per person indicator gives a vivid picture of energy access and poverty
Energy productivity has soared around the world in the last few decades in re-sponse to rising fuel prices as this graph shows But there are some notable excep-tions While efficiency has increased 80 in North America it has stayed constant in Africa and dropped considerably in the Middle East
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
BIG DATA TO PLAY WITH 4
Big Data to Play With
EI Sourcebook
OverviewThe Extractive Industries Sourcebook (EI Sourcebook) established in 2010 is a World Bank funded project in collaboration with the University of Dundee think tanks universit-ies and civil society groups It was estab-lished in parallel with the World Bank funded social network GOXI or Governance of the Extractive Industries (goxiorg) which provides a platform for those working in the field to connect and share ideas and experi-ences The EI Sourcebook draws together expertise on extractives revenue manage-ment from various sources into one compre-hensible document outlining global best practices It is largely aimed at senior gov-
ernment officials and decision makers but will also be of use to civil society activ-ists and journalists The information is split into various streams the basic text of the Chapters inter-views with experts webinars (online explanatory videos) and documents commis-sioned for the Source Book
AccessAvailable directly from the website the EI Sourcebook is frequently updated Follow the Twitter feed for updates on new material added Following peer review it will be available in a downloadable pdf format
Data HighlightsTechnical terms are explained in comprehens-ible terms for the non-specialist and for those wanting to know more about a certain topic the Additional Reading section contains links to much longer and more technical documents often summarised by the authors of the EI Sourcebook The Resources tab on the sidebar contains various source streams divided by country and chapter
WEBSITE wwweisourcebookorg
LANGUAGE FOOTPRINT
en (fr)
HISTORICAL COVERAGE
1949-2011
GEOGRAPHICAL COVERAGE
Global
UPDATES Weekly
TWITTER FEED eisourcebook
5 BIG DATA TO PLAY WITH
Within the chapter text are different types of media such as this diagram which refer-ences an IMF publication on Production Sharing Agreements as well as graphs cre-ated by Sourcebook authors from publicly available data-sets and charts Presenta-tions from partner organisations are made available in embedded slideshows
Pop-up shaded boxes highlight case studies of good practice for example Box 68 which gives easily digested information about Brazils petroleum sector organisa-tion The boxes provide real-world examples of concepts covered as well as further ex-planation of important issues
LOOK OUT FOR
Chapter 3 The Extractive Industries
serves as an introduction to governance of the oil or gas sector the challenges faced by those tasked with governance policies (Section 31) and includes a primer on why sector governance varies so much between countries and between dif-ferent extractive industries (Section 32)
Chapter 5 Policy Legal and Contractual Framework
is a window onto a vast array of contracts and legislation organised by country Such documents can prove difficult to access but can provide useful background for understanding how a countrys oil sector is governed Click on the drop-down Resources menu to see a growing library of oil laws and regulations agreements and model contracts
BIG DATA TO PLAY WITH 6
Energy Information Administration (EIA)
OverviewAs the statistical and analytical agency with-in the US Department of Energy on which many domestic policymakers rely EIA is un-derstandably US-centric The Wednesday morning release of their weekly oil report can move world oil markets A legal safe-guard ensures that EIA materials are pro-duced independently of policy considera-tions but that did not stop the Wall Street Journal from making accusations in 2010 that EIAs data integrity was threatened and its methodologies flawedThe emphasis is on demand supply and prices As well as raw data the EIA pulls to-
gether the figures into easily understandable trends Much analysis focuses on en-ergy issues relevant to the White House such as emerging commodity producers and the unconventional fuels boom in the US The annual flagship publication is the Annual Energy Review (and the International En-ergy Review) But there are also extensive publications aimed at different audiences which you can get delivered by email Stand-outs are the Country Analysis Briefs which give a useful birds eye view on the sector country-by-country and Today in Energy a series of bite-sized articles and charts
AccessThe monthly energy reviews can be downloaded in PDF format MS Excel and CSV To access and search the raw data go to (Geography gt Country gt International En-ergy Statistics)
Highlights
The educational thrust of the agency means that there are plenty of materials to fill in knowledge gaps on issues ranging from the environmental impact of the oil and gas in-dustry to the pros and cons of biofuels In-cluding a welcome energy unit conversion calculator
WEBSITE wwweiagov
LANGUAGE FOOTPRINT
en
HISTORICAL COVERAGE
1949-2011
GEOGRAPHICAL COVERAGE
Global (215 countries)
UPDATES Weeklymonthly
TWITTER FEED EIAgov
7 BIG DATA TO PLAY WITH
How might I use it
SEE AT-A-GLANCE DATA ON A MAP
Lets say what you need is some background information on the reserve or production levels of a certain producing country easily displayed and easy to contrast with sur-rounding nations Going to Geography gt Maps from the homepage will bring up a col-our-coded map of world production con-sumption and reserve levels where you can browse basic statistics
TAKE A CLOSER LOOK
For more in-depth information go to the in-dividual country pages for an at-a-glance overview of the sector in a particular coun-try where you can download the full Coun-try Analysis Briefs (available for 44 countries at time of writing) in PDF format Topics covered include reserves production infra-structure and power generation compete with a full list of sources
PLAY WITH THE DATA
Alternatively to see this data in its raw format see the International Energy Statist-ics tab at the foot of the page and search for data yourself You can browse by fuel in-dicator or by country Data is available on production consumption electricity genera-tion and consumption primary energy and energy intensity Just scroll through the tabs choose CO2 emission imports and ex-ports Just choose your time frame and download in Excel format
BIG DATA TO PLAY WITH 8
BP Statistical Review of World Energy
OverviewIn the companys own words BP has been providing timely and objective data about energy economics since 1951 Indeed as a go-to for up-to-date figures on production and reserve levels in a glossy and easily navigable format the BP Statistical Review is hard to beat What started as an internally circulated document addressing the dearth of information on global oil and gas markets is now quoted by industry publications me-dia and academia Data tables on oil and gas production re-serves prices refining consumption and trade movements are interspersed with col-
ourful graphics and icons as well as sections on coal nuclear hydroelectricity and renewables Commentary sections also help to make the links between this years data and long-term energy trends
AccessReport download-able as PDF (in full or individual sections) or entire workbook as MS Excel file 26-slide packs of Powerpoint slides are even available of charts maps and graphs or infographics
HighlightsFor a 5-minute primer on the events that shook the world over the past year in dazzling infographic format the Energy in Numbers video on the homepage will fill you in or alternatively be talked through it all in a fireside chat with BPs chief eco-nomist
How might I use itThe stack graph to the right is an example of the BP data in action It has been put together by taking the regional totals of carbon dioxide emissions since 1964 The graph structure al-lows both the overall pattern of growing global use and also changing regional trends to emerge such as flattening emissions in Europe and rising emissions in Asia
WEBSITE wwwbpcomstatisticalreview
LANGUAGE FOOTPRINT
en cn
HISTORICAL COVERAGE
1965-2011
GEOGRAPHICAL COVERAGE
Global (48 countries)
UPDATES Annual
TWITTER FEED BP_America
9 BIG DATA TO PLAY WITH
Another use scenario of the BP data is the map to the right The spreadsheet data provided the basis to look at changing energy balances country by country over the last 20 years The countries highlighted are those which have experienced the greatest change for the worse that is to say the greatest increase in oil deficits and are colour-coded according to the amount they need to import
International Energy Agency (IEA)
OverviewThe IEA an influential actor in the gathering and analysis of global energy statistics has been around since 1974 coordinating policy among consumer countries and has come to be known as the consumers OPEC As a data source it is the place to go for an an authoritative source of data on supply transformation and consumption of major energy sources While it may be a less glossy product than the offerings by BP and Eni the IEA does dip its toe into the infographics world with some dynamic maps showing European gas flows and various energy indicators Data sets are
searchable by country region or product or alternatively over 70 publications a year on oil natural gas prices and electricity can be downloaded for free In addi -tion there are 30 priced publications a year released through the online bookshop on paper PDF or CD-ROMThe IEAs Energy Statistics Manual is available in nine languages and is a good primer to help sift through some of the jargon used in the data sets themselves
AccessAccessible online or archived monthly surveys downloadable free of charge in PDF or MS Excel format (see Publicationssurveys free for download under Statistics tab)The IEA also offers an online data service either using novel pay-per-view data cards or on a more standard annual subscription (1000 Data Points come in at euro45 while an annual subscription to the complete World Energy Statistics and Bal-ances is priced at euro1400) The data service makes use of the Beyond 2020 browser for easier manipulation of multi-dimensional data and creation of personalised
WEBSITE wwwieaorgstats
LANGUAGE FOOTPRINT
en ru cn
HISTORICAL COVERAGE
Archives available 1999-date
GEOGRAPHICAL COVERAGE
34 countries (OECD) and 154 (non-OECD)
UPDATES Monthly
TWITTER FEED IEA
BIG DATA TO PLAY WITH 10
spreadsheets
HighlightsThe 82-page pocket-sized book of Key World Energy Statistics is aimed precisely at non-specialist businessmen journalists and students and means you need never be without an an answer to those tricky questions about net Angolan energy exports The pocket guide contains a series of easy-to-grasp data tables and graphs The energy unit converter and glossary of acronyms abbreviations and units of measurement are also thoughtful touches for anyone who has grappled with the distinctions between bcm gce and gCO2kWh
How might I use itThe IEAs freely available document on petroleum product prices (in either PDF or Excel format) uses the data collected by the organisation and pulls it into the fol-lowing graphs to compare price fluctuations in both gasoline and fuel oil split by region between 2009-2012 In this case the dotted line repres-ents Japanese gasoline prices the line at the top represents Europe and line at the bottom North America Prices charged for the various products which can be produced out of crude oil can vary depending on geographical political and other factors and by doing the legwork for us the EIA demonstrates how these differences show themselves in the case of gasoline The graphs source document contains similar visualisa-tions for data around diesel domest-ic heating oil and fuel oil for in-dustryFurther down the document the full data to back up the graphical representations are available in table form The raw data corroborate with the graph with average gasoline prices in the five European countries showing somewhat higher than prices in Japan and significantly higher than in Canada and the United States
11 BIG DATA TO PLAY WITH
World Bank Databank
OverviewWithin the remit of the World Bank Open Data Initiative the bank is on a mission to improve access to the data it collects and collates Truly impressive in scope and lan-guage footprint their comprehensive data repository is a real treasure trove of free-of-charge data and a valuable tool to support research by journalists Of the 1200 indicat-ors available to browse Energy and Mining is designated as one of the key topic covered under which data can be pulled up on GDP per unit of energy use of nucle-ar and alternative energy and pump price for gasoline ($) to name but a few These can be bulk downloaded as an Excel file to
be played with or viewed as a series of ready-made graphs on the site itself Indic-ators come with useful notes to help clarify their meaning However where the site comes into its own is the vast DataBank resource which al-lows users to make customised data requests and view these made-to-measure data sets in table chart or map form The slick new interface designed for DataBank comes complete with an equally slick step-by-step tutorial to help you navigate your way through the vast data sets available Once you have signed up and re-ceived your login details you are free to save any of your creations to go back and admire in the future
AccessA whole menu of options are available at the World Bank site take your pick 1 download bulk data sets by country topic or specific indicator 2 grab a widget or snippets of code to embed on a website for automatically
updated living data 3 use the web API to create custom visualisations and mashups 4 access the full Databank for customised queries and selected datasets
HighlightsThe opportunities for tailor-making your own data-sets using the World Bank tools go far beyond the options on other sites And true to the spirit of data journalism which maintains that visual images give us a deeper understanding of information the tool allows for the quick and easy creation of a wide range of charts and map-ping options Spotting global energy trends has never been so much fun
WEBSITE wwwdataworldbankorg
LANGUAGE FOOTPRINT
en es fr ar cn
HISTORICAL COVERAGE
1960-date
GEOGRAPHICAL COVERAGE
Global (214 countries)
UPDATES Annual
TWITTER FEED worldbankdata
BIG DATA TO PLAY WITH 12
How might I use itVisualisations demonstrate World Bank data in action
A map identifying the worlds top 10 energy using countries per capita (in green) and the bottom 10 (in blue) Using the energy use per person indicator gives a vivid picture of energy access and poverty
Energy productivity has soared around the world in the last few decades in re-sponse to rising fuel prices as this graph shows But there are some notable excep-tions While efficiency has increased 80 in North America it has stayed constant in Africa and dropped considerably in the Middle East
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
5 BIG DATA TO PLAY WITH
Within the chapter text are different types of media such as this diagram which refer-ences an IMF publication on Production Sharing Agreements as well as graphs cre-ated by Sourcebook authors from publicly available data-sets and charts Presenta-tions from partner organisations are made available in embedded slideshows
Pop-up shaded boxes highlight case studies of good practice for example Box 68 which gives easily digested information about Brazils petroleum sector organisa-tion The boxes provide real-world examples of concepts covered as well as further ex-planation of important issues
LOOK OUT FOR
Chapter 3 The Extractive Industries
serves as an introduction to governance of the oil or gas sector the challenges faced by those tasked with governance policies (Section 31) and includes a primer on why sector governance varies so much between countries and between dif-ferent extractive industries (Section 32)
Chapter 5 Policy Legal and Contractual Framework
is a window onto a vast array of contracts and legislation organised by country Such documents can prove difficult to access but can provide useful background for understanding how a countrys oil sector is governed Click on the drop-down Resources menu to see a growing library of oil laws and regulations agreements and model contracts
BIG DATA TO PLAY WITH 6
Energy Information Administration (EIA)
OverviewAs the statistical and analytical agency with-in the US Department of Energy on which many domestic policymakers rely EIA is un-derstandably US-centric The Wednesday morning release of their weekly oil report can move world oil markets A legal safe-guard ensures that EIA materials are pro-duced independently of policy considera-tions but that did not stop the Wall Street Journal from making accusations in 2010 that EIAs data integrity was threatened and its methodologies flawedThe emphasis is on demand supply and prices As well as raw data the EIA pulls to-
gether the figures into easily understandable trends Much analysis focuses on en-ergy issues relevant to the White House such as emerging commodity producers and the unconventional fuels boom in the US The annual flagship publication is the Annual Energy Review (and the International En-ergy Review) But there are also extensive publications aimed at different audiences which you can get delivered by email Stand-outs are the Country Analysis Briefs which give a useful birds eye view on the sector country-by-country and Today in Energy a series of bite-sized articles and charts
AccessThe monthly energy reviews can be downloaded in PDF format MS Excel and CSV To access and search the raw data go to (Geography gt Country gt International En-ergy Statistics)
Highlights
The educational thrust of the agency means that there are plenty of materials to fill in knowledge gaps on issues ranging from the environmental impact of the oil and gas in-dustry to the pros and cons of biofuels In-cluding a welcome energy unit conversion calculator
WEBSITE wwweiagov
LANGUAGE FOOTPRINT
en
HISTORICAL COVERAGE
1949-2011
GEOGRAPHICAL COVERAGE
Global (215 countries)
UPDATES Weeklymonthly
TWITTER FEED EIAgov
7 BIG DATA TO PLAY WITH
How might I use it
SEE AT-A-GLANCE DATA ON A MAP
Lets say what you need is some background information on the reserve or production levels of a certain producing country easily displayed and easy to contrast with sur-rounding nations Going to Geography gt Maps from the homepage will bring up a col-our-coded map of world production con-sumption and reserve levels where you can browse basic statistics
TAKE A CLOSER LOOK
For more in-depth information go to the in-dividual country pages for an at-a-glance overview of the sector in a particular coun-try where you can download the full Coun-try Analysis Briefs (available for 44 countries at time of writing) in PDF format Topics covered include reserves production infra-structure and power generation compete with a full list of sources
PLAY WITH THE DATA
Alternatively to see this data in its raw format see the International Energy Statist-ics tab at the foot of the page and search for data yourself You can browse by fuel in-dicator or by country Data is available on production consumption electricity genera-tion and consumption primary energy and energy intensity Just scroll through the tabs choose CO2 emission imports and ex-ports Just choose your time frame and download in Excel format
BIG DATA TO PLAY WITH 8
BP Statistical Review of World Energy
OverviewIn the companys own words BP has been providing timely and objective data about energy economics since 1951 Indeed as a go-to for up-to-date figures on production and reserve levels in a glossy and easily navigable format the BP Statistical Review is hard to beat What started as an internally circulated document addressing the dearth of information on global oil and gas markets is now quoted by industry publications me-dia and academia Data tables on oil and gas production re-serves prices refining consumption and trade movements are interspersed with col-
ourful graphics and icons as well as sections on coal nuclear hydroelectricity and renewables Commentary sections also help to make the links between this years data and long-term energy trends
AccessReport download-able as PDF (in full or individual sections) or entire workbook as MS Excel file 26-slide packs of Powerpoint slides are even available of charts maps and graphs or infographics
HighlightsFor a 5-minute primer on the events that shook the world over the past year in dazzling infographic format the Energy in Numbers video on the homepage will fill you in or alternatively be talked through it all in a fireside chat with BPs chief eco-nomist
How might I use itThe stack graph to the right is an example of the BP data in action It has been put together by taking the regional totals of carbon dioxide emissions since 1964 The graph structure al-lows both the overall pattern of growing global use and also changing regional trends to emerge such as flattening emissions in Europe and rising emissions in Asia
WEBSITE wwwbpcomstatisticalreview
LANGUAGE FOOTPRINT
en cn
HISTORICAL COVERAGE
1965-2011
GEOGRAPHICAL COVERAGE
Global (48 countries)
UPDATES Annual
TWITTER FEED BP_America
9 BIG DATA TO PLAY WITH
Another use scenario of the BP data is the map to the right The spreadsheet data provided the basis to look at changing energy balances country by country over the last 20 years The countries highlighted are those which have experienced the greatest change for the worse that is to say the greatest increase in oil deficits and are colour-coded according to the amount they need to import
International Energy Agency (IEA)
OverviewThe IEA an influential actor in the gathering and analysis of global energy statistics has been around since 1974 coordinating policy among consumer countries and has come to be known as the consumers OPEC As a data source it is the place to go for an an authoritative source of data on supply transformation and consumption of major energy sources While it may be a less glossy product than the offerings by BP and Eni the IEA does dip its toe into the infographics world with some dynamic maps showing European gas flows and various energy indicators Data sets are
searchable by country region or product or alternatively over 70 publications a year on oil natural gas prices and electricity can be downloaded for free In addi -tion there are 30 priced publications a year released through the online bookshop on paper PDF or CD-ROMThe IEAs Energy Statistics Manual is available in nine languages and is a good primer to help sift through some of the jargon used in the data sets themselves
AccessAccessible online or archived monthly surveys downloadable free of charge in PDF or MS Excel format (see Publicationssurveys free for download under Statistics tab)The IEA also offers an online data service either using novel pay-per-view data cards or on a more standard annual subscription (1000 Data Points come in at euro45 while an annual subscription to the complete World Energy Statistics and Bal-ances is priced at euro1400) The data service makes use of the Beyond 2020 browser for easier manipulation of multi-dimensional data and creation of personalised
WEBSITE wwwieaorgstats
LANGUAGE FOOTPRINT
en ru cn
HISTORICAL COVERAGE
Archives available 1999-date
GEOGRAPHICAL COVERAGE
34 countries (OECD) and 154 (non-OECD)
UPDATES Monthly
TWITTER FEED IEA
BIG DATA TO PLAY WITH 10
spreadsheets
HighlightsThe 82-page pocket-sized book of Key World Energy Statistics is aimed precisely at non-specialist businessmen journalists and students and means you need never be without an an answer to those tricky questions about net Angolan energy exports The pocket guide contains a series of easy-to-grasp data tables and graphs The energy unit converter and glossary of acronyms abbreviations and units of measurement are also thoughtful touches for anyone who has grappled with the distinctions between bcm gce and gCO2kWh
How might I use itThe IEAs freely available document on petroleum product prices (in either PDF or Excel format) uses the data collected by the organisation and pulls it into the fol-lowing graphs to compare price fluctuations in both gasoline and fuel oil split by region between 2009-2012 In this case the dotted line repres-ents Japanese gasoline prices the line at the top represents Europe and line at the bottom North America Prices charged for the various products which can be produced out of crude oil can vary depending on geographical political and other factors and by doing the legwork for us the EIA demonstrates how these differences show themselves in the case of gasoline The graphs source document contains similar visualisa-tions for data around diesel domest-ic heating oil and fuel oil for in-dustryFurther down the document the full data to back up the graphical representations are available in table form The raw data corroborate with the graph with average gasoline prices in the five European countries showing somewhat higher than prices in Japan and significantly higher than in Canada and the United States
11 BIG DATA TO PLAY WITH
World Bank Databank
OverviewWithin the remit of the World Bank Open Data Initiative the bank is on a mission to improve access to the data it collects and collates Truly impressive in scope and lan-guage footprint their comprehensive data repository is a real treasure trove of free-of-charge data and a valuable tool to support research by journalists Of the 1200 indicat-ors available to browse Energy and Mining is designated as one of the key topic covered under which data can be pulled up on GDP per unit of energy use of nucle-ar and alternative energy and pump price for gasoline ($) to name but a few These can be bulk downloaded as an Excel file to
be played with or viewed as a series of ready-made graphs on the site itself Indic-ators come with useful notes to help clarify their meaning However where the site comes into its own is the vast DataBank resource which al-lows users to make customised data requests and view these made-to-measure data sets in table chart or map form The slick new interface designed for DataBank comes complete with an equally slick step-by-step tutorial to help you navigate your way through the vast data sets available Once you have signed up and re-ceived your login details you are free to save any of your creations to go back and admire in the future
AccessA whole menu of options are available at the World Bank site take your pick 1 download bulk data sets by country topic or specific indicator 2 grab a widget or snippets of code to embed on a website for automatically
updated living data 3 use the web API to create custom visualisations and mashups 4 access the full Databank for customised queries and selected datasets
HighlightsThe opportunities for tailor-making your own data-sets using the World Bank tools go far beyond the options on other sites And true to the spirit of data journalism which maintains that visual images give us a deeper understanding of information the tool allows for the quick and easy creation of a wide range of charts and map-ping options Spotting global energy trends has never been so much fun
WEBSITE wwwdataworldbankorg
LANGUAGE FOOTPRINT
en es fr ar cn
HISTORICAL COVERAGE
1960-date
GEOGRAPHICAL COVERAGE
Global (214 countries)
UPDATES Annual
TWITTER FEED worldbankdata
BIG DATA TO PLAY WITH 12
How might I use itVisualisations demonstrate World Bank data in action
A map identifying the worlds top 10 energy using countries per capita (in green) and the bottom 10 (in blue) Using the energy use per person indicator gives a vivid picture of energy access and poverty
Energy productivity has soared around the world in the last few decades in re-sponse to rising fuel prices as this graph shows But there are some notable excep-tions While efficiency has increased 80 in North America it has stayed constant in Africa and dropped considerably in the Middle East
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
BIG DATA TO PLAY WITH 6
Energy Information Administration (EIA)
OverviewAs the statistical and analytical agency with-in the US Department of Energy on which many domestic policymakers rely EIA is un-derstandably US-centric The Wednesday morning release of their weekly oil report can move world oil markets A legal safe-guard ensures that EIA materials are pro-duced independently of policy considera-tions but that did not stop the Wall Street Journal from making accusations in 2010 that EIAs data integrity was threatened and its methodologies flawedThe emphasis is on demand supply and prices As well as raw data the EIA pulls to-
gether the figures into easily understandable trends Much analysis focuses on en-ergy issues relevant to the White House such as emerging commodity producers and the unconventional fuels boom in the US The annual flagship publication is the Annual Energy Review (and the International En-ergy Review) But there are also extensive publications aimed at different audiences which you can get delivered by email Stand-outs are the Country Analysis Briefs which give a useful birds eye view on the sector country-by-country and Today in Energy a series of bite-sized articles and charts
AccessThe monthly energy reviews can be downloaded in PDF format MS Excel and CSV To access and search the raw data go to (Geography gt Country gt International En-ergy Statistics)
Highlights
The educational thrust of the agency means that there are plenty of materials to fill in knowledge gaps on issues ranging from the environmental impact of the oil and gas in-dustry to the pros and cons of biofuels In-cluding a welcome energy unit conversion calculator
WEBSITE wwweiagov
LANGUAGE FOOTPRINT
en
HISTORICAL COVERAGE
1949-2011
GEOGRAPHICAL COVERAGE
Global (215 countries)
UPDATES Weeklymonthly
TWITTER FEED EIAgov
7 BIG DATA TO PLAY WITH
How might I use it
SEE AT-A-GLANCE DATA ON A MAP
Lets say what you need is some background information on the reserve or production levels of a certain producing country easily displayed and easy to contrast with sur-rounding nations Going to Geography gt Maps from the homepage will bring up a col-our-coded map of world production con-sumption and reserve levels where you can browse basic statistics
TAKE A CLOSER LOOK
For more in-depth information go to the in-dividual country pages for an at-a-glance overview of the sector in a particular coun-try where you can download the full Coun-try Analysis Briefs (available for 44 countries at time of writing) in PDF format Topics covered include reserves production infra-structure and power generation compete with a full list of sources
PLAY WITH THE DATA
Alternatively to see this data in its raw format see the International Energy Statist-ics tab at the foot of the page and search for data yourself You can browse by fuel in-dicator or by country Data is available on production consumption electricity genera-tion and consumption primary energy and energy intensity Just scroll through the tabs choose CO2 emission imports and ex-ports Just choose your time frame and download in Excel format
BIG DATA TO PLAY WITH 8
BP Statistical Review of World Energy
OverviewIn the companys own words BP has been providing timely and objective data about energy economics since 1951 Indeed as a go-to for up-to-date figures on production and reserve levels in a glossy and easily navigable format the BP Statistical Review is hard to beat What started as an internally circulated document addressing the dearth of information on global oil and gas markets is now quoted by industry publications me-dia and academia Data tables on oil and gas production re-serves prices refining consumption and trade movements are interspersed with col-
ourful graphics and icons as well as sections on coal nuclear hydroelectricity and renewables Commentary sections also help to make the links between this years data and long-term energy trends
AccessReport download-able as PDF (in full or individual sections) or entire workbook as MS Excel file 26-slide packs of Powerpoint slides are even available of charts maps and graphs or infographics
HighlightsFor a 5-minute primer on the events that shook the world over the past year in dazzling infographic format the Energy in Numbers video on the homepage will fill you in or alternatively be talked through it all in a fireside chat with BPs chief eco-nomist
How might I use itThe stack graph to the right is an example of the BP data in action It has been put together by taking the regional totals of carbon dioxide emissions since 1964 The graph structure al-lows both the overall pattern of growing global use and also changing regional trends to emerge such as flattening emissions in Europe and rising emissions in Asia
WEBSITE wwwbpcomstatisticalreview
LANGUAGE FOOTPRINT
en cn
HISTORICAL COVERAGE
1965-2011
GEOGRAPHICAL COVERAGE
Global (48 countries)
UPDATES Annual
TWITTER FEED BP_America
9 BIG DATA TO PLAY WITH
Another use scenario of the BP data is the map to the right The spreadsheet data provided the basis to look at changing energy balances country by country over the last 20 years The countries highlighted are those which have experienced the greatest change for the worse that is to say the greatest increase in oil deficits and are colour-coded according to the amount they need to import
International Energy Agency (IEA)
OverviewThe IEA an influential actor in the gathering and analysis of global energy statistics has been around since 1974 coordinating policy among consumer countries and has come to be known as the consumers OPEC As a data source it is the place to go for an an authoritative source of data on supply transformation and consumption of major energy sources While it may be a less glossy product than the offerings by BP and Eni the IEA does dip its toe into the infographics world with some dynamic maps showing European gas flows and various energy indicators Data sets are
searchable by country region or product or alternatively over 70 publications a year on oil natural gas prices and electricity can be downloaded for free In addi -tion there are 30 priced publications a year released through the online bookshop on paper PDF or CD-ROMThe IEAs Energy Statistics Manual is available in nine languages and is a good primer to help sift through some of the jargon used in the data sets themselves
AccessAccessible online or archived monthly surveys downloadable free of charge in PDF or MS Excel format (see Publicationssurveys free for download under Statistics tab)The IEA also offers an online data service either using novel pay-per-view data cards or on a more standard annual subscription (1000 Data Points come in at euro45 while an annual subscription to the complete World Energy Statistics and Bal-ances is priced at euro1400) The data service makes use of the Beyond 2020 browser for easier manipulation of multi-dimensional data and creation of personalised
WEBSITE wwwieaorgstats
LANGUAGE FOOTPRINT
en ru cn
HISTORICAL COVERAGE
Archives available 1999-date
GEOGRAPHICAL COVERAGE
34 countries (OECD) and 154 (non-OECD)
UPDATES Monthly
TWITTER FEED IEA
BIG DATA TO PLAY WITH 10
spreadsheets
HighlightsThe 82-page pocket-sized book of Key World Energy Statistics is aimed precisely at non-specialist businessmen journalists and students and means you need never be without an an answer to those tricky questions about net Angolan energy exports The pocket guide contains a series of easy-to-grasp data tables and graphs The energy unit converter and glossary of acronyms abbreviations and units of measurement are also thoughtful touches for anyone who has grappled with the distinctions between bcm gce and gCO2kWh
How might I use itThe IEAs freely available document on petroleum product prices (in either PDF or Excel format) uses the data collected by the organisation and pulls it into the fol-lowing graphs to compare price fluctuations in both gasoline and fuel oil split by region between 2009-2012 In this case the dotted line repres-ents Japanese gasoline prices the line at the top represents Europe and line at the bottom North America Prices charged for the various products which can be produced out of crude oil can vary depending on geographical political and other factors and by doing the legwork for us the EIA demonstrates how these differences show themselves in the case of gasoline The graphs source document contains similar visualisa-tions for data around diesel domest-ic heating oil and fuel oil for in-dustryFurther down the document the full data to back up the graphical representations are available in table form The raw data corroborate with the graph with average gasoline prices in the five European countries showing somewhat higher than prices in Japan and significantly higher than in Canada and the United States
11 BIG DATA TO PLAY WITH
World Bank Databank
OverviewWithin the remit of the World Bank Open Data Initiative the bank is on a mission to improve access to the data it collects and collates Truly impressive in scope and lan-guage footprint their comprehensive data repository is a real treasure trove of free-of-charge data and a valuable tool to support research by journalists Of the 1200 indicat-ors available to browse Energy and Mining is designated as one of the key topic covered under which data can be pulled up on GDP per unit of energy use of nucle-ar and alternative energy and pump price for gasoline ($) to name but a few These can be bulk downloaded as an Excel file to
be played with or viewed as a series of ready-made graphs on the site itself Indic-ators come with useful notes to help clarify their meaning However where the site comes into its own is the vast DataBank resource which al-lows users to make customised data requests and view these made-to-measure data sets in table chart or map form The slick new interface designed for DataBank comes complete with an equally slick step-by-step tutorial to help you navigate your way through the vast data sets available Once you have signed up and re-ceived your login details you are free to save any of your creations to go back and admire in the future
AccessA whole menu of options are available at the World Bank site take your pick 1 download bulk data sets by country topic or specific indicator 2 grab a widget or snippets of code to embed on a website for automatically
updated living data 3 use the web API to create custom visualisations and mashups 4 access the full Databank for customised queries and selected datasets
HighlightsThe opportunities for tailor-making your own data-sets using the World Bank tools go far beyond the options on other sites And true to the spirit of data journalism which maintains that visual images give us a deeper understanding of information the tool allows for the quick and easy creation of a wide range of charts and map-ping options Spotting global energy trends has never been so much fun
WEBSITE wwwdataworldbankorg
LANGUAGE FOOTPRINT
en es fr ar cn
HISTORICAL COVERAGE
1960-date
GEOGRAPHICAL COVERAGE
Global (214 countries)
UPDATES Annual
TWITTER FEED worldbankdata
BIG DATA TO PLAY WITH 12
How might I use itVisualisations demonstrate World Bank data in action
A map identifying the worlds top 10 energy using countries per capita (in green) and the bottom 10 (in blue) Using the energy use per person indicator gives a vivid picture of energy access and poverty
Energy productivity has soared around the world in the last few decades in re-sponse to rising fuel prices as this graph shows But there are some notable excep-tions While efficiency has increased 80 in North America it has stayed constant in Africa and dropped considerably in the Middle East
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
7 BIG DATA TO PLAY WITH
How might I use it
SEE AT-A-GLANCE DATA ON A MAP
Lets say what you need is some background information on the reserve or production levels of a certain producing country easily displayed and easy to contrast with sur-rounding nations Going to Geography gt Maps from the homepage will bring up a col-our-coded map of world production con-sumption and reserve levels where you can browse basic statistics
TAKE A CLOSER LOOK
For more in-depth information go to the in-dividual country pages for an at-a-glance overview of the sector in a particular coun-try where you can download the full Coun-try Analysis Briefs (available for 44 countries at time of writing) in PDF format Topics covered include reserves production infra-structure and power generation compete with a full list of sources
PLAY WITH THE DATA
Alternatively to see this data in its raw format see the International Energy Statist-ics tab at the foot of the page and search for data yourself You can browse by fuel in-dicator or by country Data is available on production consumption electricity genera-tion and consumption primary energy and energy intensity Just scroll through the tabs choose CO2 emission imports and ex-ports Just choose your time frame and download in Excel format
BIG DATA TO PLAY WITH 8
BP Statistical Review of World Energy
OverviewIn the companys own words BP has been providing timely and objective data about energy economics since 1951 Indeed as a go-to for up-to-date figures on production and reserve levels in a glossy and easily navigable format the BP Statistical Review is hard to beat What started as an internally circulated document addressing the dearth of information on global oil and gas markets is now quoted by industry publications me-dia and academia Data tables on oil and gas production re-serves prices refining consumption and trade movements are interspersed with col-
ourful graphics and icons as well as sections on coal nuclear hydroelectricity and renewables Commentary sections also help to make the links between this years data and long-term energy trends
AccessReport download-able as PDF (in full or individual sections) or entire workbook as MS Excel file 26-slide packs of Powerpoint slides are even available of charts maps and graphs or infographics
HighlightsFor a 5-minute primer on the events that shook the world over the past year in dazzling infographic format the Energy in Numbers video on the homepage will fill you in or alternatively be talked through it all in a fireside chat with BPs chief eco-nomist
How might I use itThe stack graph to the right is an example of the BP data in action It has been put together by taking the regional totals of carbon dioxide emissions since 1964 The graph structure al-lows both the overall pattern of growing global use and also changing regional trends to emerge such as flattening emissions in Europe and rising emissions in Asia
WEBSITE wwwbpcomstatisticalreview
LANGUAGE FOOTPRINT
en cn
HISTORICAL COVERAGE
1965-2011
GEOGRAPHICAL COVERAGE
Global (48 countries)
UPDATES Annual
TWITTER FEED BP_America
9 BIG DATA TO PLAY WITH
Another use scenario of the BP data is the map to the right The spreadsheet data provided the basis to look at changing energy balances country by country over the last 20 years The countries highlighted are those which have experienced the greatest change for the worse that is to say the greatest increase in oil deficits and are colour-coded according to the amount they need to import
International Energy Agency (IEA)
OverviewThe IEA an influential actor in the gathering and analysis of global energy statistics has been around since 1974 coordinating policy among consumer countries and has come to be known as the consumers OPEC As a data source it is the place to go for an an authoritative source of data on supply transformation and consumption of major energy sources While it may be a less glossy product than the offerings by BP and Eni the IEA does dip its toe into the infographics world with some dynamic maps showing European gas flows and various energy indicators Data sets are
searchable by country region or product or alternatively over 70 publications a year on oil natural gas prices and electricity can be downloaded for free In addi -tion there are 30 priced publications a year released through the online bookshop on paper PDF or CD-ROMThe IEAs Energy Statistics Manual is available in nine languages and is a good primer to help sift through some of the jargon used in the data sets themselves
AccessAccessible online or archived monthly surveys downloadable free of charge in PDF or MS Excel format (see Publicationssurveys free for download under Statistics tab)The IEA also offers an online data service either using novel pay-per-view data cards or on a more standard annual subscription (1000 Data Points come in at euro45 while an annual subscription to the complete World Energy Statistics and Bal-ances is priced at euro1400) The data service makes use of the Beyond 2020 browser for easier manipulation of multi-dimensional data and creation of personalised
WEBSITE wwwieaorgstats
LANGUAGE FOOTPRINT
en ru cn
HISTORICAL COVERAGE
Archives available 1999-date
GEOGRAPHICAL COVERAGE
34 countries (OECD) and 154 (non-OECD)
UPDATES Monthly
TWITTER FEED IEA
BIG DATA TO PLAY WITH 10
spreadsheets
HighlightsThe 82-page pocket-sized book of Key World Energy Statistics is aimed precisely at non-specialist businessmen journalists and students and means you need never be without an an answer to those tricky questions about net Angolan energy exports The pocket guide contains a series of easy-to-grasp data tables and graphs The energy unit converter and glossary of acronyms abbreviations and units of measurement are also thoughtful touches for anyone who has grappled with the distinctions between bcm gce and gCO2kWh
How might I use itThe IEAs freely available document on petroleum product prices (in either PDF or Excel format) uses the data collected by the organisation and pulls it into the fol-lowing graphs to compare price fluctuations in both gasoline and fuel oil split by region between 2009-2012 In this case the dotted line repres-ents Japanese gasoline prices the line at the top represents Europe and line at the bottom North America Prices charged for the various products which can be produced out of crude oil can vary depending on geographical political and other factors and by doing the legwork for us the EIA demonstrates how these differences show themselves in the case of gasoline The graphs source document contains similar visualisa-tions for data around diesel domest-ic heating oil and fuel oil for in-dustryFurther down the document the full data to back up the graphical representations are available in table form The raw data corroborate with the graph with average gasoline prices in the five European countries showing somewhat higher than prices in Japan and significantly higher than in Canada and the United States
11 BIG DATA TO PLAY WITH
World Bank Databank
OverviewWithin the remit of the World Bank Open Data Initiative the bank is on a mission to improve access to the data it collects and collates Truly impressive in scope and lan-guage footprint their comprehensive data repository is a real treasure trove of free-of-charge data and a valuable tool to support research by journalists Of the 1200 indicat-ors available to browse Energy and Mining is designated as one of the key topic covered under which data can be pulled up on GDP per unit of energy use of nucle-ar and alternative energy and pump price for gasoline ($) to name but a few These can be bulk downloaded as an Excel file to
be played with or viewed as a series of ready-made graphs on the site itself Indic-ators come with useful notes to help clarify their meaning However where the site comes into its own is the vast DataBank resource which al-lows users to make customised data requests and view these made-to-measure data sets in table chart or map form The slick new interface designed for DataBank comes complete with an equally slick step-by-step tutorial to help you navigate your way through the vast data sets available Once you have signed up and re-ceived your login details you are free to save any of your creations to go back and admire in the future
AccessA whole menu of options are available at the World Bank site take your pick 1 download bulk data sets by country topic or specific indicator 2 grab a widget or snippets of code to embed on a website for automatically
updated living data 3 use the web API to create custom visualisations and mashups 4 access the full Databank for customised queries and selected datasets
HighlightsThe opportunities for tailor-making your own data-sets using the World Bank tools go far beyond the options on other sites And true to the spirit of data journalism which maintains that visual images give us a deeper understanding of information the tool allows for the quick and easy creation of a wide range of charts and map-ping options Spotting global energy trends has never been so much fun
WEBSITE wwwdataworldbankorg
LANGUAGE FOOTPRINT
en es fr ar cn
HISTORICAL COVERAGE
1960-date
GEOGRAPHICAL COVERAGE
Global (214 countries)
UPDATES Annual
TWITTER FEED worldbankdata
BIG DATA TO PLAY WITH 12
How might I use itVisualisations demonstrate World Bank data in action
A map identifying the worlds top 10 energy using countries per capita (in green) and the bottom 10 (in blue) Using the energy use per person indicator gives a vivid picture of energy access and poverty
Energy productivity has soared around the world in the last few decades in re-sponse to rising fuel prices as this graph shows But there are some notable excep-tions While efficiency has increased 80 in North America it has stayed constant in Africa and dropped considerably in the Middle East
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
BIG DATA TO PLAY WITH 8
BP Statistical Review of World Energy
OverviewIn the companys own words BP has been providing timely and objective data about energy economics since 1951 Indeed as a go-to for up-to-date figures on production and reserve levels in a glossy and easily navigable format the BP Statistical Review is hard to beat What started as an internally circulated document addressing the dearth of information on global oil and gas markets is now quoted by industry publications me-dia and academia Data tables on oil and gas production re-serves prices refining consumption and trade movements are interspersed with col-
ourful graphics and icons as well as sections on coal nuclear hydroelectricity and renewables Commentary sections also help to make the links between this years data and long-term energy trends
AccessReport download-able as PDF (in full or individual sections) or entire workbook as MS Excel file 26-slide packs of Powerpoint slides are even available of charts maps and graphs or infographics
HighlightsFor a 5-minute primer on the events that shook the world over the past year in dazzling infographic format the Energy in Numbers video on the homepage will fill you in or alternatively be talked through it all in a fireside chat with BPs chief eco-nomist
How might I use itThe stack graph to the right is an example of the BP data in action It has been put together by taking the regional totals of carbon dioxide emissions since 1964 The graph structure al-lows both the overall pattern of growing global use and also changing regional trends to emerge such as flattening emissions in Europe and rising emissions in Asia
WEBSITE wwwbpcomstatisticalreview
LANGUAGE FOOTPRINT
en cn
HISTORICAL COVERAGE
1965-2011
GEOGRAPHICAL COVERAGE
Global (48 countries)
UPDATES Annual
TWITTER FEED BP_America
9 BIG DATA TO PLAY WITH
Another use scenario of the BP data is the map to the right The spreadsheet data provided the basis to look at changing energy balances country by country over the last 20 years The countries highlighted are those which have experienced the greatest change for the worse that is to say the greatest increase in oil deficits and are colour-coded according to the amount they need to import
International Energy Agency (IEA)
OverviewThe IEA an influential actor in the gathering and analysis of global energy statistics has been around since 1974 coordinating policy among consumer countries and has come to be known as the consumers OPEC As a data source it is the place to go for an an authoritative source of data on supply transformation and consumption of major energy sources While it may be a less glossy product than the offerings by BP and Eni the IEA does dip its toe into the infographics world with some dynamic maps showing European gas flows and various energy indicators Data sets are
searchable by country region or product or alternatively over 70 publications a year on oil natural gas prices and electricity can be downloaded for free In addi -tion there are 30 priced publications a year released through the online bookshop on paper PDF or CD-ROMThe IEAs Energy Statistics Manual is available in nine languages and is a good primer to help sift through some of the jargon used in the data sets themselves
AccessAccessible online or archived monthly surveys downloadable free of charge in PDF or MS Excel format (see Publicationssurveys free for download under Statistics tab)The IEA also offers an online data service either using novel pay-per-view data cards or on a more standard annual subscription (1000 Data Points come in at euro45 while an annual subscription to the complete World Energy Statistics and Bal-ances is priced at euro1400) The data service makes use of the Beyond 2020 browser for easier manipulation of multi-dimensional data and creation of personalised
WEBSITE wwwieaorgstats
LANGUAGE FOOTPRINT
en ru cn
HISTORICAL COVERAGE
Archives available 1999-date
GEOGRAPHICAL COVERAGE
34 countries (OECD) and 154 (non-OECD)
UPDATES Monthly
TWITTER FEED IEA
BIG DATA TO PLAY WITH 10
spreadsheets
HighlightsThe 82-page pocket-sized book of Key World Energy Statistics is aimed precisely at non-specialist businessmen journalists and students and means you need never be without an an answer to those tricky questions about net Angolan energy exports The pocket guide contains a series of easy-to-grasp data tables and graphs The energy unit converter and glossary of acronyms abbreviations and units of measurement are also thoughtful touches for anyone who has grappled with the distinctions between bcm gce and gCO2kWh
How might I use itThe IEAs freely available document on petroleum product prices (in either PDF or Excel format) uses the data collected by the organisation and pulls it into the fol-lowing graphs to compare price fluctuations in both gasoline and fuel oil split by region between 2009-2012 In this case the dotted line repres-ents Japanese gasoline prices the line at the top represents Europe and line at the bottom North America Prices charged for the various products which can be produced out of crude oil can vary depending on geographical political and other factors and by doing the legwork for us the EIA demonstrates how these differences show themselves in the case of gasoline The graphs source document contains similar visualisa-tions for data around diesel domest-ic heating oil and fuel oil for in-dustryFurther down the document the full data to back up the graphical representations are available in table form The raw data corroborate with the graph with average gasoline prices in the five European countries showing somewhat higher than prices in Japan and significantly higher than in Canada and the United States
11 BIG DATA TO PLAY WITH
World Bank Databank
OverviewWithin the remit of the World Bank Open Data Initiative the bank is on a mission to improve access to the data it collects and collates Truly impressive in scope and lan-guage footprint their comprehensive data repository is a real treasure trove of free-of-charge data and a valuable tool to support research by journalists Of the 1200 indicat-ors available to browse Energy and Mining is designated as one of the key topic covered under which data can be pulled up on GDP per unit of energy use of nucle-ar and alternative energy and pump price for gasoline ($) to name but a few These can be bulk downloaded as an Excel file to
be played with or viewed as a series of ready-made graphs on the site itself Indic-ators come with useful notes to help clarify their meaning However where the site comes into its own is the vast DataBank resource which al-lows users to make customised data requests and view these made-to-measure data sets in table chart or map form The slick new interface designed for DataBank comes complete with an equally slick step-by-step tutorial to help you navigate your way through the vast data sets available Once you have signed up and re-ceived your login details you are free to save any of your creations to go back and admire in the future
AccessA whole menu of options are available at the World Bank site take your pick 1 download bulk data sets by country topic or specific indicator 2 grab a widget or snippets of code to embed on a website for automatically
updated living data 3 use the web API to create custom visualisations and mashups 4 access the full Databank for customised queries and selected datasets
HighlightsThe opportunities for tailor-making your own data-sets using the World Bank tools go far beyond the options on other sites And true to the spirit of data journalism which maintains that visual images give us a deeper understanding of information the tool allows for the quick and easy creation of a wide range of charts and map-ping options Spotting global energy trends has never been so much fun
WEBSITE wwwdataworldbankorg
LANGUAGE FOOTPRINT
en es fr ar cn
HISTORICAL COVERAGE
1960-date
GEOGRAPHICAL COVERAGE
Global (214 countries)
UPDATES Annual
TWITTER FEED worldbankdata
BIG DATA TO PLAY WITH 12
How might I use itVisualisations demonstrate World Bank data in action
A map identifying the worlds top 10 energy using countries per capita (in green) and the bottom 10 (in blue) Using the energy use per person indicator gives a vivid picture of energy access and poverty
Energy productivity has soared around the world in the last few decades in re-sponse to rising fuel prices as this graph shows But there are some notable excep-tions While efficiency has increased 80 in North America it has stayed constant in Africa and dropped considerably in the Middle East
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
9 BIG DATA TO PLAY WITH
Another use scenario of the BP data is the map to the right The spreadsheet data provided the basis to look at changing energy balances country by country over the last 20 years The countries highlighted are those which have experienced the greatest change for the worse that is to say the greatest increase in oil deficits and are colour-coded according to the amount they need to import
International Energy Agency (IEA)
OverviewThe IEA an influential actor in the gathering and analysis of global energy statistics has been around since 1974 coordinating policy among consumer countries and has come to be known as the consumers OPEC As a data source it is the place to go for an an authoritative source of data on supply transformation and consumption of major energy sources While it may be a less glossy product than the offerings by BP and Eni the IEA does dip its toe into the infographics world with some dynamic maps showing European gas flows and various energy indicators Data sets are
searchable by country region or product or alternatively over 70 publications a year on oil natural gas prices and electricity can be downloaded for free In addi -tion there are 30 priced publications a year released through the online bookshop on paper PDF or CD-ROMThe IEAs Energy Statistics Manual is available in nine languages and is a good primer to help sift through some of the jargon used in the data sets themselves
AccessAccessible online or archived monthly surveys downloadable free of charge in PDF or MS Excel format (see Publicationssurveys free for download under Statistics tab)The IEA also offers an online data service either using novel pay-per-view data cards or on a more standard annual subscription (1000 Data Points come in at euro45 while an annual subscription to the complete World Energy Statistics and Bal-ances is priced at euro1400) The data service makes use of the Beyond 2020 browser for easier manipulation of multi-dimensional data and creation of personalised
WEBSITE wwwieaorgstats
LANGUAGE FOOTPRINT
en ru cn
HISTORICAL COVERAGE
Archives available 1999-date
GEOGRAPHICAL COVERAGE
34 countries (OECD) and 154 (non-OECD)
UPDATES Monthly
TWITTER FEED IEA
BIG DATA TO PLAY WITH 10
spreadsheets
HighlightsThe 82-page pocket-sized book of Key World Energy Statistics is aimed precisely at non-specialist businessmen journalists and students and means you need never be without an an answer to those tricky questions about net Angolan energy exports The pocket guide contains a series of easy-to-grasp data tables and graphs The energy unit converter and glossary of acronyms abbreviations and units of measurement are also thoughtful touches for anyone who has grappled with the distinctions between bcm gce and gCO2kWh
How might I use itThe IEAs freely available document on petroleum product prices (in either PDF or Excel format) uses the data collected by the organisation and pulls it into the fol-lowing graphs to compare price fluctuations in both gasoline and fuel oil split by region between 2009-2012 In this case the dotted line repres-ents Japanese gasoline prices the line at the top represents Europe and line at the bottom North America Prices charged for the various products which can be produced out of crude oil can vary depending on geographical political and other factors and by doing the legwork for us the EIA demonstrates how these differences show themselves in the case of gasoline The graphs source document contains similar visualisa-tions for data around diesel domest-ic heating oil and fuel oil for in-dustryFurther down the document the full data to back up the graphical representations are available in table form The raw data corroborate with the graph with average gasoline prices in the five European countries showing somewhat higher than prices in Japan and significantly higher than in Canada and the United States
11 BIG DATA TO PLAY WITH
World Bank Databank
OverviewWithin the remit of the World Bank Open Data Initiative the bank is on a mission to improve access to the data it collects and collates Truly impressive in scope and lan-guage footprint their comprehensive data repository is a real treasure trove of free-of-charge data and a valuable tool to support research by journalists Of the 1200 indicat-ors available to browse Energy and Mining is designated as one of the key topic covered under which data can be pulled up on GDP per unit of energy use of nucle-ar and alternative energy and pump price for gasoline ($) to name but a few These can be bulk downloaded as an Excel file to
be played with or viewed as a series of ready-made graphs on the site itself Indic-ators come with useful notes to help clarify their meaning However where the site comes into its own is the vast DataBank resource which al-lows users to make customised data requests and view these made-to-measure data sets in table chart or map form The slick new interface designed for DataBank comes complete with an equally slick step-by-step tutorial to help you navigate your way through the vast data sets available Once you have signed up and re-ceived your login details you are free to save any of your creations to go back and admire in the future
AccessA whole menu of options are available at the World Bank site take your pick 1 download bulk data sets by country topic or specific indicator 2 grab a widget or snippets of code to embed on a website for automatically
updated living data 3 use the web API to create custom visualisations and mashups 4 access the full Databank for customised queries and selected datasets
HighlightsThe opportunities for tailor-making your own data-sets using the World Bank tools go far beyond the options on other sites And true to the spirit of data journalism which maintains that visual images give us a deeper understanding of information the tool allows for the quick and easy creation of a wide range of charts and map-ping options Spotting global energy trends has never been so much fun
WEBSITE wwwdataworldbankorg
LANGUAGE FOOTPRINT
en es fr ar cn
HISTORICAL COVERAGE
1960-date
GEOGRAPHICAL COVERAGE
Global (214 countries)
UPDATES Annual
TWITTER FEED worldbankdata
BIG DATA TO PLAY WITH 12
How might I use itVisualisations demonstrate World Bank data in action
A map identifying the worlds top 10 energy using countries per capita (in green) and the bottom 10 (in blue) Using the energy use per person indicator gives a vivid picture of energy access and poverty
Energy productivity has soared around the world in the last few decades in re-sponse to rising fuel prices as this graph shows But there are some notable excep-tions While efficiency has increased 80 in North America it has stayed constant in Africa and dropped considerably in the Middle East
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
BIG DATA TO PLAY WITH 10
spreadsheets
HighlightsThe 82-page pocket-sized book of Key World Energy Statistics is aimed precisely at non-specialist businessmen journalists and students and means you need never be without an an answer to those tricky questions about net Angolan energy exports The pocket guide contains a series of easy-to-grasp data tables and graphs The energy unit converter and glossary of acronyms abbreviations and units of measurement are also thoughtful touches for anyone who has grappled with the distinctions between bcm gce and gCO2kWh
How might I use itThe IEAs freely available document on petroleum product prices (in either PDF or Excel format) uses the data collected by the organisation and pulls it into the fol-lowing graphs to compare price fluctuations in both gasoline and fuel oil split by region between 2009-2012 In this case the dotted line repres-ents Japanese gasoline prices the line at the top represents Europe and line at the bottom North America Prices charged for the various products which can be produced out of crude oil can vary depending on geographical political and other factors and by doing the legwork for us the EIA demonstrates how these differences show themselves in the case of gasoline The graphs source document contains similar visualisa-tions for data around diesel domest-ic heating oil and fuel oil for in-dustryFurther down the document the full data to back up the graphical representations are available in table form The raw data corroborate with the graph with average gasoline prices in the five European countries showing somewhat higher than prices in Japan and significantly higher than in Canada and the United States
11 BIG DATA TO PLAY WITH
World Bank Databank
OverviewWithin the remit of the World Bank Open Data Initiative the bank is on a mission to improve access to the data it collects and collates Truly impressive in scope and lan-guage footprint their comprehensive data repository is a real treasure trove of free-of-charge data and a valuable tool to support research by journalists Of the 1200 indicat-ors available to browse Energy and Mining is designated as one of the key topic covered under which data can be pulled up on GDP per unit of energy use of nucle-ar and alternative energy and pump price for gasoline ($) to name but a few These can be bulk downloaded as an Excel file to
be played with or viewed as a series of ready-made graphs on the site itself Indic-ators come with useful notes to help clarify their meaning However where the site comes into its own is the vast DataBank resource which al-lows users to make customised data requests and view these made-to-measure data sets in table chart or map form The slick new interface designed for DataBank comes complete with an equally slick step-by-step tutorial to help you navigate your way through the vast data sets available Once you have signed up and re-ceived your login details you are free to save any of your creations to go back and admire in the future
AccessA whole menu of options are available at the World Bank site take your pick 1 download bulk data sets by country topic or specific indicator 2 grab a widget or snippets of code to embed on a website for automatically
updated living data 3 use the web API to create custom visualisations and mashups 4 access the full Databank for customised queries and selected datasets
HighlightsThe opportunities for tailor-making your own data-sets using the World Bank tools go far beyond the options on other sites And true to the spirit of data journalism which maintains that visual images give us a deeper understanding of information the tool allows for the quick and easy creation of a wide range of charts and map-ping options Spotting global energy trends has never been so much fun
WEBSITE wwwdataworldbankorg
LANGUAGE FOOTPRINT
en es fr ar cn
HISTORICAL COVERAGE
1960-date
GEOGRAPHICAL COVERAGE
Global (214 countries)
UPDATES Annual
TWITTER FEED worldbankdata
BIG DATA TO PLAY WITH 12
How might I use itVisualisations demonstrate World Bank data in action
A map identifying the worlds top 10 energy using countries per capita (in green) and the bottom 10 (in blue) Using the energy use per person indicator gives a vivid picture of energy access and poverty
Energy productivity has soared around the world in the last few decades in re-sponse to rising fuel prices as this graph shows But there are some notable excep-tions While efficiency has increased 80 in North America it has stayed constant in Africa and dropped considerably in the Middle East
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
11 BIG DATA TO PLAY WITH
World Bank Databank
OverviewWithin the remit of the World Bank Open Data Initiative the bank is on a mission to improve access to the data it collects and collates Truly impressive in scope and lan-guage footprint their comprehensive data repository is a real treasure trove of free-of-charge data and a valuable tool to support research by journalists Of the 1200 indicat-ors available to browse Energy and Mining is designated as one of the key topic covered under which data can be pulled up on GDP per unit of energy use of nucle-ar and alternative energy and pump price for gasoline ($) to name but a few These can be bulk downloaded as an Excel file to
be played with or viewed as a series of ready-made graphs on the site itself Indic-ators come with useful notes to help clarify their meaning However where the site comes into its own is the vast DataBank resource which al-lows users to make customised data requests and view these made-to-measure data sets in table chart or map form The slick new interface designed for DataBank comes complete with an equally slick step-by-step tutorial to help you navigate your way through the vast data sets available Once you have signed up and re-ceived your login details you are free to save any of your creations to go back and admire in the future
AccessA whole menu of options are available at the World Bank site take your pick 1 download bulk data sets by country topic or specific indicator 2 grab a widget or snippets of code to embed on a website for automatically
updated living data 3 use the web API to create custom visualisations and mashups 4 access the full Databank for customised queries and selected datasets
HighlightsThe opportunities for tailor-making your own data-sets using the World Bank tools go far beyond the options on other sites And true to the spirit of data journalism which maintains that visual images give us a deeper understanding of information the tool allows for the quick and easy creation of a wide range of charts and map-ping options Spotting global energy trends has never been so much fun
WEBSITE wwwdataworldbankorg
LANGUAGE FOOTPRINT
en es fr ar cn
HISTORICAL COVERAGE
1960-date
GEOGRAPHICAL COVERAGE
Global (214 countries)
UPDATES Annual
TWITTER FEED worldbankdata
BIG DATA TO PLAY WITH 12
How might I use itVisualisations demonstrate World Bank data in action
A map identifying the worlds top 10 energy using countries per capita (in green) and the bottom 10 (in blue) Using the energy use per person indicator gives a vivid picture of energy access and poverty
Energy productivity has soared around the world in the last few decades in re-sponse to rising fuel prices as this graph shows But there are some notable excep-tions While efficiency has increased 80 in North America it has stayed constant in Africa and dropped considerably in the Middle East
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
BIG DATA TO PLAY WITH 12
How might I use itVisualisations demonstrate World Bank data in action
A map identifying the worlds top 10 energy using countries per capita (in green) and the bottom 10 (in blue) Using the energy use per person indicator gives a vivid picture of energy access and poverty
Energy productivity has soared around the world in the last few decades in re-sponse to rising fuel prices as this graph shows But there are some notable excep-tions While efficiency has increased 80 in North America it has stayed constant in Africa and dropped considerably in the Middle East
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
13 OIL AND GAS MEDIA
Oil and Gas Media
Interfax EnergyBACKGROUND
A spin off of parent company Interfax International Information Group launched in September 2011 its con-tent is easily navigable and refresh-ingly with very few advertisements Includes more lighthearted features such as The Wildcats Pick of the Week blog
FOCUS Exclusively but very thorough focus on the gas industry with knock-on ef-fects of gas industry developments also analysed
SUBSCRIPTION Includes access to daily and weekly PDF reports as well as full access to their website and accompanying
dataBank with country and pipeline profiles
COVERAGE Heavy coverage on developments in Russia and the Caspian and journal-ists based in Brussels to analyse policy updates on European energy regulation Also covers global mar-kets
SUBSCRIPTION FEE pound1500 annually
WEB ADDRESS wwwinterfaxenergycom
TWITTER IFAXNews
Middle East Economic Survey BACKGROUND
A general energy-focused economics website including political comment-ary and an Energy Fundamentals weekly column which provides an overall view of the weeks develop-ments
FOCUS Includes a mixture of directly related oil and gas related breaking news with analysis of geopolitics in the MENA region reporting on a weekly basis
SUBSCRIPTION Provides full access to the website as some articles are hidden for non-sub-scribers as well as a weekly newslet-
ter a monthly geopolitical risk report and bimonthly Sustainable Energy re-port The newsletters are also avail-able online the Energy and Geopol-itical Risk reports provide good back-ground to the issues covered for the non-expert together with analysis
COVERAGE MENA region
TARGET AUDIENCE People looking to invest in the region those following energy politics in the Middle East
PRINT COPY In various PDF newsletter forms
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
OIL AND GAS MEDIA 14
SUBSCRIPTION $2725 annually
WEB ADDRESS wwwmeescom
TWITTER MidEastReview
Oil amp Gas EurasiaBACKGROUND
Produced in and distributed from Rus-sia aims to encourage investment in and around Russias oil industry and is produced in both Russian and Eng-lish Includes a mixture of original writing and articles re-published
FOCUS Despite their official line of focusing on the Russian oil industry stories of-ten cover other parts of the world However they do include more art-icles from niche news providers such as Ukrainian Energy and the Bulgari-an site novinitecom than you might find elsewhere
SUBSCRIPTION Includes the print version for non-subscribers there is full access to art-icles from the website
COVERAGE Russia CIS countries global to a less-er extent
TARGET AUDIENCE Those looking to do business in Rus-sia though not necessarily those with in depth industry knowledge as fairly non-technical language is used An eclectic mix of industry coverage
PRINT COPY Produced monthly
SUBSCRIPTION FEE $300 annually
WEB ADDRESS wwwoilandgaseurasiacom
TWITTER OilGasEurasia
Oil amp Gas Journal BACKGROUND
First published in 1902 and one of six oil industry publications produced by US-based PennWell Petroleum Group their website includes a huge range of content from video blogs to break-ing news and developments in the unconventionals market
FOCUS Heavy focus on industry news from US perspective their material is gen-erally posted from Houston No par-ticular focus on specific sectors within the industry
SUBSCRIPTION Choice between print edition or the
digital edition subscription with ac-cess to 12-month archive of digital editions Certain articles on the web-site require subscription (see yellow lock next to headlines) but a majority of articles are free to read Other free services include the OGJ newsletter and other monthly reports
COVERAGE Advertised as an international petro-leum news source but primarily US centric 52 of subscribers are US based
TARGET AUDIENCE Those with a fairly advanced know-ledge of the industry as many of the
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
PRINT COPYAvailable on subscription produced weekly
CIRCULATIONJune 2012 issue 107846 (combined print and digital version)
SUBSCRIPTION FEE $69 annually for US print subscribers $108 for non-US Digital subscription for $49
WEB ADDRESSwwwogjcom
TWITTER OGJOnline
Oil Review Middle East BACKGROUND
Launched in 1997 a crisply-produced magazine with a broad focus fairly advertising-heavy but not in an ob-trusive way
FOCUS Covers upstream and downstream sectors but unusually also boasts sections dedicated to technical devel-opments and petrochemicals
SUBSCRIPTION No paying subscription necessary all articles are available to read on the website updated daily Free to sign up to their fortnightly e-newsletter and read current issue of the magazine (English and Arabic) online
COVERAGE Primarily Middle East
TARGET AUDIENCE The official line is government minis-tries international oil companies and
leading industry contractors and cop-ies are circulated at the major in-dustry exhibitions and conferences The technical focus section is well suited for oil geeks wanting to know which coating solutions have been developed or the latest break-throughs in valve technology
PRINT COPYPublished eight times a year
CIRCULATION9100 annually
SUBSCRIPTION FEE pound63 annually for UK subscribers pound79 for non-UK subscribers
WEB ADDRESSwwwoilreviewme
Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
15 OIL AND GAS MEDIA
stories require technical proficiency stories under the General Interest tab are recommended for a more ac-cessible take
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Petroleum Africa BACKGROUND
Published since 2003 Petroleum Africa employs a network of journalists spread across the continent to give a wide regional spread and is the lead-ing pan-African industry publication
FOCUS Industry developments across the African continent without the wider geopolitical analysis often found in other publications which leaves many stories short and easy to digest Stor-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
OIL AND GAS MEDIA 16
ies are often categorised by country rather than by industry sector
SUBSCRIPTION Access to monthly printed magazine and full access to the website free subscription available to a weekly e-newsletter with a news round up
COVERAGE Africa
TARGET AUDIENCE Those wanting to know more about the energy sector of a specific African country (or countries) who also have enough industry know-how to under-stand the technical details
PRINT COPY Produced monthly each print copy fo-cuses on a different industry or coun-try
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE $350 for print version $225 for digit-al version
WEB ADDRESS wwwpetroleumafricacom
TWITTER PetroleumAfrica
Petroleum Economist BACKGROUND
Founded in 1934 PE was originally published in English French and Ger-man twice monthly until World War II with Spanish Japanese and Arabic editions added at various points dur-ing the 1950s when it was owned by Shell and BP Non-English publications stopped in 1970s and industry own-ership ended in 1989 when the magazine was bought by its current owner Euromoney
FOCUS Renowned for its exclusive insider in-telligence and analysis the website and magazine include special sec-tions on unconventionals and LNG Each print copy has a regional focus
SUBSCRIPTION Almost all content on the website is subscription only only the first few lines are visible without subscription Subscription includes their print magazine full access to the website and maps from the Cartographic Ser-vices section as and when they are published
COVERAGE Team based in London Calgary and Singapore global energy industry covered
TARGET AUDIENCE Aimed at high level energy strategists current readers are top-level management executives aca-demic institutions intelligence agen-cies and specialist consultancies
PRINT COPY Published 10 times a year
CIRCULATION1566 (average per issue)
SUBSCRIPTION FEE $2160 annually
WEB ADDRESS wwwpetroleum-economistcom
TWITTER Peeditorial
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
17 OIL AND GAS MEDIA
Platts BACKGROUND
Leading financial information service founded in 1909 to publish reliable market-based price information and level the playing field between inde-pendent oilmen and Big Oil
FOCUS Financial information and intelligence on global energy markets a source of benchmark price assessments in the physical energy markets provides real-time information on oil prices worldwide
SUBSCRIPTION Various price assessments and in-dices newsletters and reports to choose from for individual subscrip-tions
COVERAGE Global
TARGET AUDIENCE Traders analysts risks managers at more than 10000 public and private sector organisations in more than 150
countries for those looking for in-sider financial intelligence though subscriptions do not come cheaply
PRINT COPY Depends on subscription package
CIRCULATION12903 (October 2011)
SUBSCRIPTION FEE Varies per service- eg digital sub-scription to twice monthly EU Energy report is $1525 Oilgram Price daily report with detailed price assess-ments from across the globe is $19995
WEB ADDRESS wwwplattscom
TWITTER PlattsOil Platts Gas
Rigzone BACKGROUND
More of an overall online industry hub than just a news source Rigzone aims to be a networking site between com-panies recruiters and potential cli-ents Advertisements feature promin-antly on the site
FOCUS Clearly a hub for recruiters and oil in-dustry job seekers nevertheless Rig-zone covers exploration and produc-tion together with a fairly generic non-technical look at investment in the sector
SUBSCRIPTION No charge for any site material in-cluding newsletters access to a Ca-reers Centre and for job-seekers the
ability to post CVs online COVERAGE
Global TARGET AUDIENCE
Job seekers and those looking for in-dustry updates without an overly de-tailed analysis
PRINT COPY Not produced
SUBSCRIPTION FEE Free
WEB ADDRESS wwwrigzonecom
TWITTER Rigzone
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
OIL AND GAS MEDIA 18
Upstream BACKGROUND
Founded in 1996 with headquarters in Norway it has 28 full time corres-pondents in major industry centres The only mainstream tabloid oil in-dustry publication its salmon pink paper makes the weekly publication stand out from its competitors and its irreverent style and offbeat hu-mour have according to the New York Times made it a must read for those in the oil business
FOCUS Restricted to the upstream sector of the global oil and gas industry with a focus on business policy trends and the key players
SUBSCRIPTION News is subscription only but a short summary of some articles can be ac-cessed without subscription (look out for articles without a yellow lock icon) Subscription includes a weekly hard copy newspaper and full access to the site and its archives
COVERAGE Offices in Oslo and Stavanger in Nor-
way London Houston Singapore Ghana and Rio de Janeiro The printed magazine is distributed in over 100 countries especially the UK Norway and the US
TARGET AUDIENCE According to a 2010 survey of sub-scribers conducted by Upstream the majority are in management func-tions (25 classifying themselves as top management) with 75 influen-cing the strategic development of their company
PRINT COPY Published weekly every Friday
CIRCULATION6300 (average per issue)
SUBSCRIPTION FEE $985 annually
WEB ADDRESS wwwupstreamonlinecom
TWITTER UpstreamOnline
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
19 TOP 10 BLOGS
Top 10 Blogs
Global focus
The Barrel
You say you want a revolution shale gas Here are some things to do
The Barrel August 2012
BACKGROUNDPlatts a major energy market inform-ation provider runs The Barrel blog with posts running from hard-figure analysis to first-person essays on en-ergy and commodity issues The blog has a central ldquonews deskrdquo that links to other resources such as reports from the Energy Information Adminis-tration (EIA) but also posts stories at-large from independent contributors At-large blog are considered at the
email address webeditorplattscom FOCUS
Topics ranging from supplydemand derivatives regulation renewable fuels electricity and gas production to carbon trading and the environ-ment
TARGET AUDIENCE As a resource for journalists The Bar-rel bridges the gap between light and heavy energy reporting with hard facts wrapped in a somewhat easi-er-to-digest narrative style
WEB ADDRESS wwwplattscomweblogoilblog
The Oil Drum
To my surprise I found that the Chinese chemical economy is advancing rapidly in its use of coal as a chemical feedstock as opposed to crude oil in other countries
The Oil Drum August 2012
BACKGROUND Published by the Institute for the Study of Energy and Our Future a non-profit corporation in the United States The blog is strongly affiliated with peak oil thought leaders
FOCUS The blog takes a forward-looking big-picture approach to energy issues looking at global trends in both the upstream and downstream sectors such as oil and gas production and demand and the development of al-ternative energy sources According to the blogs mission it seeks to fa-cilitate civil evidence-based discus-sions about energy and its impacts on the future of humanity
TARGET AUDIENCE The Oil Drum is a resource well-suited to journalists and others seeking hard figures to back up their claims Man-aged and written by a group of
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
TOP 10 BLOGS 20
lifelong scientists and PhDs the ma-terial is scientifically rigorous and gets geeky in the best sense of the word but tries to stay digestible for all the lay readers out there Case in point - the handy acronym guide
that helps decipher some of the more esoteric industry jargon
WEB ADDRESS wwwtheoildrumcom
Energy Security and Climate
Over the long run oil markets tend to do a good job of balancing supply and demand Over the short run theyrsquore considerably quirkier
Energy Security Climate August 2012
BACKGROUNDThe brainchild of three fellows at the Council on Foreign Relations (CFR) - Michael A Levi Blake Clayton and Daniel P Ahn ndash the blog provides a
space for three think tankers to cut loose from the institutional PDF-paper mold
FOCUS Policy challenges surrounding energy security and climate change
TARGET AUDIENCE Anyone interested in the broader geo-political and economic implications of the global energy industry
WEB ADDRESS wwwblogscfrorglevi
Crude Oil Trader
Its Saturday and as always we like to check in with the great staff at Oil NGold to get their call on where crude oil is headed
The Crude Oil Trader August 2012
BACKGROUNDProduced by a team of four hawk-eyed independent market watchers The writing is dry to say the least but impeccably detailed and a useful resource for anyone looking for an in-depth look at energy and commodity
marketsFOCUS
Oil and gas prices and commodity markets
TARGET AUDIENCE Readers in the blogs niche audience - mostly finance journalists traders or market watchers ndash will generally need a basic understanding of and high enthusiasm for markets and other financial mechanisms
WEB ADDRESS wwwcrudeoiltraderblogspotde
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
21 TOP 10 BLOGS
The Wildcat Blog
The key to market efficiency is information transparency
The Wildcat Blog August 2012
BACKGROUNDAffiliated with Interfax Energy an in-formation and analysis provider on global energy markets Every Monday the blog has a handy Pick of the Week which gives readers a head start on global goings-on for the coming week as well as a round-up of the previous weeks energy high-lights Their daily posts on assorted topics are informative and smoothly written
FOCUS The Wildcat Blog doesnt have any single focus - according to the blogs About section it provides insight
analysis and wit on the gas industry from Interfax Energy reporters in every corner of the world A trawl through its archives shows an em-phasis on some of the more promin-ent currents of energy reporting in-cluding China the emergence of shale gas commodity prices major international companies and as ever global hot spots such as Kurdistan Syria and Central Asia
TARGET AUDIENCE Journalists scouring the web for story ideas and other readers pressed for time more generally will find the Pick of the Week series an out-standing resource for weekly syn-opses of happenings in the industry
WEB ADDRESS wwwinterfaxenergycomopinion
Regional focus
Settys notebook
Yoursquod almost think that the FARC has decided aww screw it mdash wersquore never going to topple capitalism but by George we can keep Colombia below a million barrels a day
Settys notebook July 2012
BACKGROUNDGeographer and journalist Steven Bodzins chatty near-daily look at the extractive industries of Venezuela Colombia Argentina Bolivia and oth-er countries in South America This isnt simply a news blog Bodzin also offers his opinions on some of the
more divisive issues the continent faces
FOCUS A broad overview of oil gas and min-ing issues - political economic social and environmental
COVERAGESouth America
TARGET AUDIENCEApproachable for those with little in-dustry experience with Bodzin providing context for niche stories and brief explanations for some of the more technical terminology
WEB ADDRESS wwwsettysouthamwordpresscom
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
TOP 10 BLOGS 22
Pipe(line) Dreams
Fishermen in Ghana say the oil industry is impacting their activities but without any studies they have nowhere to go with their grievances
Pipe(line) Dreams June 2012
BACKGROUNDA cross-platform documentary project that takes viewers on a journey along the Chad-Cameroon oil pipeline ac-cording to the blogs independent ed-itor film-maker Christiane Badgley
FOCUS In tandem with Badgleys document-ary films the blog looks at the story
of oil and development and the con-nections between them
COVERAGEWest central Africa
TARGET AUDIENCE Anyone interested in development work andor the corrupting effects of Big Oil Pipeline Dreams is useful for social activists or journalists inter-ested in development in Africa Badgleys near-daily postings on is-sues surrounding the Chad-Cameroon oil pipeline are symptomatic of natur-al resource-rich areas elsewhere on the continent too
WEB ADDRESS wwwpipelinedreamsorg
Energy in Asia
The Myitsone Dam is an example of the power of Myanmars previous military governments and their undying loyalty for the Chinese government
Energy in Asia December 2011
BACKGROUNDA look at trends in the Asian energy industry by independent analyst Di-ana Ngo The authors lifelong in-terest in the cultures languages and cuisines of the region mixes with a keen observation of the industry to produce a nuanced picture of Asian energy development drawing the in-dustrys commercial political cultural and environmental elements together into a multi-faceted whole
FOCUS The blog examines the political geo-
graphical environmental and diplo-matic constraints that limited re-sources bring to the global economy according to the About the Author tab
COVERAGEAsia with a focus on China Japan South Korea and Southeast Asia
TARGET AUDIENCE Anyone looking to learn about the Asian energy industry and the chal-lenges resulting from regional power imbalances and the resistance of tra-ditional culture The authors style is approachable for any experience level often breaking complex topics into digestible three reasons why types of analysis
WEB ADDRESS wwwenergyinasiablogcom
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
23 TOP 10 BLOGS
European Energy Blog
Smart grids smart meters smart cities Obviously there is money to be made here But what can smart energy really do for us
European Energy Blog July 2012
BACKGROUNDThe blog platform of the European Energy Review (EER) a publisher of reports interviews analyses view-points and debates written by energy correspondents and professionals across Europe Blogs are posted new once or twice weekly
FOCUS The blog has an editorial focus on the European energy transition ndash the movement from national and state-
controlled energy markets to a uni-fied liberalised (and regulated) European market and from a fossil-fuel dominated energy mix to a more diverse energy mix in the future ac-cording to its About section
COVERAGEEurope
TARGET AUDIENCE The blog is geared more toward the self-educating public than any sort of industry specialist group with an em-phasis on the role played by Europes political and regulatory authorities in driving the direction of the continent-s energy industry
WEB ADDRESS wwweuropeanenergyrevieweu
Kurdish Views
For the last five years Baghdad has been trying to rein in the Kurdish government especially when it comes to oil and gas
Kurdish Views June 2012
BACKGROUNDKurdish blogger and political risk ana-lyst Shwan Zulals blog on Kurdistan takes the pulse of political and legal developments in the nascent semi-autonomous region of Iraq Zulals in-sider status is apparent in his author-itative take on Kurdish affairs
FOCUS The blog centers around policy polit-ical and legal reforms in Kurdistan Iraq and the wider Middle East with a special focus on the Kurdish oil and gas sector hydrocarbon legislation investment and economic develop-ment
COVERAGEKurdistan Middle East
TARGET AUDIENCE Anyone interested in the political eco-nomy of oil in Kurdistan Iraq and the region
WEB ADDRESS wwwkurdishviewsblogspotde
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
TOP 20 TWITTER FEEDS 24
Top 20 Twitter Feeds
Individuals
ShwanZulalOVERVIEW
Shwan Zulal social sustainability con-sultant and political risk analyst with a focus on Iraqi Kurdistan offers a blow-by-blow account of the rapidly developing geopolitics of the Kur-distan Regional Government (KRG) on his Twitter account Oil and gas polit-ics and legal reform figure heavily in his musings from the frontline his links to external resources shed light on prickly Iraq-KRG relations
Fuelonthefire
Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq
Fuelonthefire July 2012
OVERVIEW An authority on post-2003 Iraq au-thor Greg Muttitt tweets on Iraq Arab world war oil + democracy on his account named after his book Fuel On The Fire His tweets offer a peek behind official story lines to un-earth under-reported nuggets about Iraq and other flash points in the oil-producing Middle East
IanpgaryOVERVIEW
Ian Gary senior policy manager for oil and mining issues at the non-profit Oxfam America tweets on human rights transparency and sustainable development issues surrounding the extractive industries His links to ex-
ternal articles and infographics are a useful primer on issues like corporate governance financial disclosure and responsible business practice - some of the biggest challenges facing the oil gas and mining industries today
sarahkentdj
Irans oil exports are stabilizing but new US sanctions later in the year could scupper deals helping the oil flow
sarahkentdj August 2012
OVERVIEW Dow Jones and Wall Street Journal re-porter Sarah Kents tweets take a nuts-and-bolts approach to the oil in-dustry touching on trends in oil ex-ports and imports production and de-mand and prices Kent includes few-er external links than some others on this list but her tweets read like news-flashes dense power-punches of information on the daily gyrations of the industry
guacamayanOVERVIEW
Reporter Steven Bodzin based in Chile specialises in energy natural resources and the environment in South America His tweets are not al-ways energy specific - human rights concerns also rear their head from time to time - but as an energy re-porter Bodzin has his ear to the ground
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
25 TOP 20 TWITTER FEEDS
kwok_w_wanOVERVIEW
Petroleum Economist liquefied natural gas (LNG) editor Kwok Wans twitter account specialises in natural gas and oil markets with an eye on most traded commodities according to his bio His tweets are rich stuff for oil price geeks market hawks and others interested in market-moving com-modities
ValerieMarcel
Cabinet approves Nigeria oil bill Well if it takes this long 2 clear cabinet wont hold my breath for parliamt approv
ValerieMarcel July 2012
OVERVIEW Chatham House fellow Valeacuterie Mar-cels tweets focus on national oil com-panies (NOCs) oil and politics espe-cially in the Middle East and Africa Marcel is a prolific re-tweeter of other energy industry observers and her account is a good depository of links and factoids on the interaction of oil and politics globally
stevelevineOVERVIEW
The account of Steve LeVine profess-or of energy security at Georgetown University is a prime destination for followers of the geopolitics of oil His tweets tend to focus on the Middle East and elsewhere where oil and conflict converge but also speak to the broader political and economic trends affecting and affected by movements in the global energy in-dustry
robinenergy
Iran was heading towards crisis already High oil prices and subsidy reform postponed it sanctions have accelerated it
robinenergy August 2012
OVERVIEW Energy strategist Robin Mills connects the dots between oil geopolitics and economics Mills tweets typically of-fer pithy statements that cut through generic headlines and simplify the complex dynamics existing between oil companies producing states and international institutions like OPEC particularly in the Middle East
noahbrennerOVERVIEW
Noah Brenner a journalist with Up-stream covers the development of do-mestic oil and especially gas pro-duction in the North America His tweets offer detailed looks at the politics of hydrocarbon development especially with the emergence of un-conventional drilling techniques such as hydraulic fracturing or fracking
derek_brower
Canada is the most expensive place in the world to make a car right now DutchDisease
derek_brower August 2012
OVERVIEW Journalist and editor-at-large of Petro-leum Economist Derek Browers conver-sations with fellow tweeters - several of them on this list - though not al-ways on the topic of energy are worth checking out for their colourful take on Iran Libya Iraq oil markets - and fly fishing among assorted other topics
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
TOP 20 TWITTER FEEDS 26
peter_kiernanOVERVIEW
Peter Kiernan energy analyst at the Economist Intelligence Unit offers his views on the geopolitics of energy globally but with a focus on the United States the AsiaPacific and the Middle East
nkechimbanu
Lets be honest ndash what politician really wants to end this - Oil theft costs Nigeria $1 billion monthly
nkechimbanu July 2012
OVERVIEW Self-proclaimed sustainable develop-ment junkie Nkechi O Mbanu covers the oil gas and mining industries in Africa with a particular focus on oil-producing Nigeria Mbanu is on the beat of international financial disclos-ure requirements such as the Dodd-Frank bill and exudes optimism on natural resource developments abil-ity to lead to a brighter African future
edwindundeeOVERVIEW
Daniel Edwin Gilbert manager of the Extractive Industries (EI) Source Book a World Bank resource tweets on is-sues surrounding oil and gas policy and management especially in the global south as well as EI-related de-velopment issues such as foreign in-vestment His account maintains a special emphasis on good gov-ernance in developing countries
Institutions
TheOil_GasYear
TOGY Interview of the Week CEO of Petronas on Malaysias future emphasis on gas
TheOil_GasYear August 2012
OVERVIEW The Oil and Gas Year a series of annu-al reports on the international energy industry provides daily links to ex-ternal articles and to its own publica-tion The Oil amp Gas Week a weekly roundup of oil and gas news
ftenergyOVERVIEW
The prolific twitter organ of the Finan-cial Times links to the latest energy news from the newspaper with mul-tiple updates daily
OilGasEurasiaOVERVIEW
The twitter account of Oil amp Gas Euras-ia links to stories in the newspaper offering a global look at the business of oil and gas extraction with a partic-ular emphasis on Russia and Central Asia
TheEIU_Energy
Iraq takes silver medal in OPEC oil production pushing Iran to third place
TheEIU_Energy August 2012
OVERVIEW The Economist Intelligence Units energy team twitter account affiliated with The Economist newspaper is a valu-able repository of links to energy
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
27 TOP 20 TWITTER FEEDS
news from various external sources Many tweets are dense morsels of in-formation food for thought for journ-alists seeking story ideas and others
EnergyOil_NewsOVERVIEW
Every few hours the Energy Oil News account links to external energy news sources with an emphasis on tech-nical detail The account is well-suited to anyone seeking an in-depth look at projects as they move through vari-ous stages - as well as the dog-eat-dog world of global energy business
Open_OilOVERVIEW
Energy consultancy OpenOils Twitter handle features links to energy blogs infographics and other topical sources around the web as well as updates from its daily news roundup
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
WHAT THE WONKS SAY 28
What the Wonks Say
Global focus
Centre for Global Energy Studies (UK) OVERVIEW
Founded by former Saudi Minister of Petroleum Sheikh Yamani the Lon-don-based CGES produces reports on the industry which despite the or-ganisations non-profit status cost nearly pound1000 per report
HIGHLIGHTS Unlike other energy policy think tanks it focuses on the oil and gas in-dustry and features a good global spread in freely available analyses and shorter reports
wwwcgescouk CGESOilAnalysis
Center for Global Development (US) OVERVIEW
CGD is currently the most significant Washington think tank researching development policy through an ana-lysis of rich country policies and their effect upon those in the devel-oping world
HIGHLIGHTS The Oil-to-Cash program researches implementation of flat rate cash di-vidends as part of oil sector gov-ernance
wwwcgdevorg cgdev
Chatham House (UK) OVERVIEW
Home of the Chatham House rule which guarantees anonymity at its meetings it is an independent think tank funded by non-governmental sources such as trusts foundations and membership fees
HIGHLIGHTS Research into governance of state-run petroleum sectors of increasing
importance following a wave of na-tionalism in oil-producing countries has used an inclusive technique of bringing researchers from over 20 oil rich countries together at intensive workshops in London They have also posted explanatory videos on You-Tube (Chatham House Primers)
wwwchathamhouseorgChathamHouse
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
29 WHAT THE WONKS SAY
Baker Institute Energy Forum (US) OVERVIEW
Founded by former Secretary of State James Baker the Energy Forum is based at Rice University in Texas It aims to take a research approach which combines academia industry and media Its Advisory Board and sponsors are made up almost exclus-ively of international and US-based oil
companies HIGHLIGHTS
Authors of their Middle East oil strategy papers were key US decision makers (and supporters) in the Iraq war
wwwbakerinstituteorgprogramsenergy-forum
Carnegie Endowment for Intl Peace (US) OVERVIEW
Distinctive for its locally staffed cen-ters in Moscow Beirut Beijing and Brussels the Washington-based cent-rist think tank aims at promoting US international engagement Funders include the US State Department and philanthropic foundations
HIGHLIGHTS The Carnegie Unconventional Oil Initi-ative focusing on what will be an in-creasingly important industry sector in coming years
wwwcarnegieendowmentorg CarnegieEndow
Oxford Policy Management (UK) OVERVIEW
A consultancy cum think tank OPM is self-financed through research paid for by international clients such as UN institutions development banks and non profit organisations One of few think tanks to have a research focus explicitly on Extractive Industries they look at how revenues from the industry could benefit the global eco-
nomy HIGHLIGHTS
Oil sector transparency research in various African countries and the val-idation of Norways latest EITI report mean that this think tank has stellar transparency credentials
wwwopmlcouk
Revenue Watch Institute (US) OVERVIEW
Originally a spin off of the Open Soci-ety Institute founded by George Sor-
os RWI have fast become world thought leaders in the field of reven-ue management promoting transpar-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
WHAT THE WONKS SAY 30
ency and accountability in the ex-tractive industries with projects in over 30 countries worldwide
HIGHLIGHTS A wealth of information including re-ports easy to understand policy briefs and training materials RWI
also advise citizen groups and gov-ernments around the world See also RWIs database of EITI reports in the Big Data section
wwwrevenuewatchorg revenuewatch
Transparency International (Germany) OVERVIEW
A global anti-corruption organisation TI has over 100 chapters across the world Their secretariat based in Ber-lin Germany has an ldquoOil and Gasrdquo section looking specifically into how to reduce corruption in the oil sector
HIGHLIGHTS Oil and gas research is not directly
covered regularly but oil companies feature heavily in their Corruption In-dices and blogs often cover legislat-ive battles between governments and Big Oil
wwwtransparencyorgtopicdetailoil_and_gas anticorruption
Global Witness (UK) OVERVIEW
Global Witness investigates and cam-paigns to prevent natural resource re-lated conflict and corruption and as-sociated environmental and human rights abuses
HIGHLIGHTS Published news and reports on some of the major issues around the oil gas and other extractive industries
including corruption conflict environ-mental governance and corporate accountability and transparency Re-cent reports on oil have encompassed Angola Afghanistan Equatorial Guinea Sudan South Sudan and Uganda
wwwglobalwitnessorgGlobal_Witness
Natural Resource Charter (UK) OVERVIEW
The Natural Resource Charter is a set of economic principles on sustainable natural resource development whose website also includes a blog news-
reel and resource center HIGHLIGHTS
A range of reference literature on technical issues such as local content
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
31 WHAT THE WONKS SAY
development fiscal regimes and Dutch Disease
wwwnaturalresourcecharterorg resourcecharter
Regional focus - Africa
African Center for Economic Transformation OVERVIEW
Labeling themselves as a think-and-do tank the Ghana-based center aims at supporting sustained eco-nomic growth across Africa They have provided policy support to vari-ous African governments including Ghana Liberia and Rwanda and fin-ancial support is provided by interna-tional governments and development
organisations HIGHLIGHTS
The extractive industries are not ex-plicitly researched through an ear-marked program but many of their occasional papers and reports men-tion the sector
wwwacetforafricaorg acetforafrica
Centre for the Study of Economies in Africa (Nigeria)OVERVIEW
Established in 2008 the Centre cites its mission as twofold improving pub-lic financial management systems in Africa and improving Africas re-search contribution to international economic policy debates
HIGHLIGHTS The Oil Revenue Management pro-
gram in collabora-tion with Oxford Policy Manage-ment including the PetroData initiat-ive which provides detailed statistics on Nigerias oil production and reven-ues
wwwcseaafricaorg csea_africa
Europe
Institut Franccedilais des relations internationales (France) OVERVIEW
The Ifri Center for Energy based in Paris and Brussels focuses on fossil
fuels and promotes a more sustainable European en-ergy and climate change
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
WHAT THE WONKS SAY 32
policy Publications are easy to under-stand for the non-policy expert
HIGHLIGHTS E-note downloadable PDFs in a mix-
ture of English and French looking closely at the gas industry across both Europe and Asia
wwwifriorg
Norwegian Institute for Intl Affairs (Norway) OVERVIEW
Largely financed by the Norwegian government the Institute emphasises interdisciplinary collaboration both domestically and abroad
HIGHLIGHTS The Energy Program looks at Norwe-gian interests in the CIS region as well as global LNG sector issues
wwwenglishnupinoActivitiesProgrammes2Energy-Programme
CISRussia
Centre for Eastern Studies (Poland)OVERVIEW
OSW as it is known in Polish was es-tablished by the Polish government in 1990 and has a geographic focus ran-ging from Baltic countries and the Balkans to the Caucausus and Central Asia
HIGHLIGHTS Their Energy Security program is a mixture of nuclear and fossil fuel and publications include explanatory doc-uments which provide context to of-ten mentioned sector issues such as the Southern Gas Corridor
wwwoswwawplen
North America
Center for Strategic and Intl Studies (US) OVERVIEW
Based out of Washington CSIS is a bi-partisan think tank promoting US in-
terests globally funded primarily by the corporate sector
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
33 WHAT THE WONKS SAY
HIGHLIGHTS The Energy and National Security pro-gram includes a series of papers on the long term affects of the 2010 Gulf of Mexico oil spill as well as an up-
coming project on Turkey Russia and Iran
wwwcsisorg CSIS
South America
Americas Society OVERVIEW
Their geographic mandate includes Latin America the Caribbean and Canada with an overarching man-date that includes politics and eco-nomics It has high-level access host-ing lunches with presidents and min-isters and partners business-oriented the Council of the Americas
HIGHLIGHTS Their Energy amp Commodities section provides an interesting take on the Latin American energy sector and in-cludes videos of high level ministers talking at their events on energy policy issues
wwwas-coaorg ascoa
Asia
The Energy and Resources Institute (India) OVERVIEW
TERI focuses on sustainable develop-ment looking primarily at Indias role in South Asias environmental devel-opment
HIGHLIGHTS The Oil and Gas program focus in-cludes a recently concluded project on Indias strategic petroleum re-serves
wwwteriinorg
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
WHAT THE SUITS SAY 34
What the Suits Say
Professional service firms
KPMG RESOURCES
KPMG one of the Big Four auditing firms has a list of articles and public-ations on energy and natural re-sources offering broad-brush per-spective on industry trends such as the development of shale gas invest-ment climates in emerging econom-ies such as China and Brazil and oil industry developments after the Gulf
of Mexico oil spill The publications also include selected quarterly re-ports on globally traded mineral com-modities such as gold platinum and copper
WEBSITE NAVIGATION K PMG publications
Ernst amp Young RESOURCES
Ernst amp Young another of the Big Four auditors has a research depart-ment specialising in oil and gas which lists energy publications available on its website including reports on oil and gas taxes the influence of na-
tional oil companies (NOCs) and the challenges presented by rising global energy demand among others
WEBSITE NAVIGATION Ernst amp Young oil and gas library
Deloitte RESOURCES
Deloittes Petroleum Services Group (PSG) produces downloadable de-tailed reports on oil and gas licensing rounds globally The group has other free resources available on request including reports on global upstream and downstream trends and a Doing business in oil and gas series on countries and regions around the world PSG also offers free oil and gas wall maps on request
Deloitte has additional oil and gas
publications available on its US homepage with special emphasis on shale gas as well as an online Center for Energy Solutions featuring reports on key oil and gas corporate issues such as mergers and regulatory risks
WEBSITE NAVIGATION wwwpsgdeloittecom for oil and gas wall maps industry reports and the Doing business in oil and gas series
wwwdeloittecom for the Deloitte Center for Energy Solutions
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
35 WHAT THE SUITS SAY
PricewaterhouseCoopers RESOURCES
PricewaterhouseCoopers (PwC) glob-al oil and gas service sector has a page for Publications thought lead-ership and studies on its website with PDF documents available for download on a variety of energy top-ics including pipelines and oil transit politics financial disclosure require-
ments for oil and gas companies the impact of the shale gas boom on global markets and regional focuses on places like Turkey and Africa
WEBSITE NAVIGATION PWC publications
Consultancies
Wood Mackenzie RESOURCES
Wood Mackenzie a global energy and mining research and consultancy group has an online resource center with several publicly-available tools including a video library a glossary of energy terms an energy conversion tool an abbreviation bank and a database of links to global energy or-ganisations and associations The
website is the shop window for the companys extensive fee paying data such as information on some 24000 wells around the world The site also sells wall maps on oil gas power and coal by sector or by region
WEBSITE NAVIGATION Wood Mackenzie resource center
Maplecroft RESOURCES
Risk-management consultancy Maplecrofts website has a page fea-turing interactive maps and indices with focuses on global risk political risks legal and regulatory environ-ments human rights climate change and the environment and natural hazards Most of the maps are avail-able only to registered users but the site does include a free Map of the Week With a paid subscription
users gain access to indices evaluat-ing global political economic social and environmental risks over 100 maps country risk scorecards them-atic atlases country briefings and in-depth country reports Free trial memberships are also available
WEBSITE NAVIGATION Maplecroft maps and Indices
Map of the Week
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
WHAT THE SUITS SAY 36
Banks
Deutsche Bank RESOURCES
Deutsche Bank offers a wealth of en-ergy sector publications which tend toward the impact of oil gas and commodity trends on Europe and the United States as well as renewable energy sources but publications
touch on other regions as well such as the Commonwealth of Independ-ent States (CIS) the Persian Gulf and Latin America
WEBSITE NAVIGATION Deutsche Bank e nergy research
Law firms
Baker amp McKenzie RESOURCES
Baker amp McKenzie based in Chicago provides global oil and gas legal ser-vices and has a database of energy publications on its website Though not strictly limited to oil and gas - the publication topics also include mining 3and renewable energies - the data-base include several articles on glob-al developments in the oil and gas business especially the evolution of
public-private partnerships in an in-dustry dominated by national oil com-panies (NOCs) The firms site-specific services also offer publications on in-dividual countries
WEBSITE NAVIGATION O il gas petrochemicals publications
Site-specific information at wwwbakermckenziecom gt Loca-tions
Salans RESOURCES
Salans deals in several areas of the energy sector including finance ex-ploration and production down-stream activity dispute resolution and others Salans energy publica-tions revolve mostly around CIS coun-tries and Eastern Europe with several
Russian-language publications also available Topics include foreign in-vestment climates trade environ-mental law vis-a-vis energy policy and energy tax law
WEBSITE NAVIGATION Salans energy publications
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
37 WHAT THE SUITS SAY
Baker Botts RESOURCES
Baker Botts website has a resource center with a list of publications relat-ing to its oil and gas work The strength of the publications lies in the legislative and regulatory spheres featuring a report on Iraqs draft oil
laws and oil and gas tax policy in the United States
WEBSITE NAVIGATION Baker Botts oil and gas resources
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
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- What the Wonks Say
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- Jargon Buster Glossary
-
JARGON BUSTER GLOSSARY 38
Jargon Buster Glossaryanticline
In geology a rock formation under which oil and gas are often found they look like domes sticking up out of the ground and for the first cen-tury of the oil industry before more sophisticated measuring devices were developed they were how geologists looked for hydrocarbons Anticlines show structural traps which are relatively easy to spot but in recent years oil exploration has been forced by the end of easy discoveries to look for more com-plex stratigraphic traps
API gravity indexA system of measurement de-veloped by the American Petroleum Institute used worldwide to denote how light or heavy a grade of CRUDE OIL is The higher the API index the lighter the crude oil is so that light crudes (such as Libyan) are 35deg and above heavy grades (such as Iranian) are below 30deg Su-per-heavy grades (such as some grades from Venezuela) are below 20deg See also HEAVY OIL LIGHT OIL
appraisal wellAppraisal wells are drilled after SEISMIC SURVEYS and a DISCOVERY WELL have shown some oil or gas is present in order to determine if the find is big enough to be a commercial discov-ery See also WILDCAT WELL DEVELOPMENT WELL SHOWING COMMERCIALITY
associated gasNatural gas mixed up or associ-ated with oil in a rock structure and produced at the same time as the oil Sometimes the gas is dis-solved within the oil but separates as it comes up to the surface For a long time such gas was treated as a waste product disposed of by FLARING or VENTING See also NON-ASSOCIATED GAS LIQUID PETROLEUM GAS
back-in right A feature of oil and gas contracts that allows a party often a govern-ment to acquire an equity particip-ation once a commercial discovery has been made without carrying the risk of exploration See also COMMERCIALITYThe President of Guinea Bissau called for 33 back in rights for the State into all mineral projects in order to establish a large and fundable National Mining Company
- Brian Menell Group 2010
barrels of oil equivalent (boe)A way of measuring energy produc-tion or consumption across different energy sources Other hydrocar-bons like NATURAL GAS and coal and oc-casionally even renewables are measured for the amount of energy they produce compared to a barrel of oil
barrels per day (bpd)The standard way of measuring oil production A barrel is about 42 US gallons or 158 litres though the ex-act number varies according to CRUDE OIL GRADES The world currently consumes around 90 million barrels of oil a day a quarter of it in the United States
benchmark crudeOils against which other oils are priced either at discount or premi-um depending on the CRUDE OIL GRADES There are three primary benchmark crudes which serve in the different oil markets of the world BRENT CRUDE WEST TEXAS INTERMEDIATE (WTI) and DUBAI CRUDE
bitumenA component of CRUDE OIL which is very heavy and viscous high amounts are extracted from OIL SANDS although it has low value rel-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
39 JARGON BUSTER GLOSSARY
ative to other products of the refin-ing process and so is often CRACKED to form other more commercially valu-able products In its raw form it is used to make roads in the form of asphalt
blockMethod used to designate an area of land which could be made up of several OIL FIELDS which divides up land into workable areas for separ-ate CONSORTIA or companies to work on
blowoutThe sudden and uncontrolled re-lease of CRUDE OIL or NATURAL GAS from a well when pressure control systems fail This risk can be mitigated by using a blow-out preventer (BOP) however only as a last line of de-fence to shut off the top of a well and prevent a GUSHER It was a blo-wout which was responsible for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010
bookingThe process by which RESERVES are added to the balance sheet of an oil company This is a crucial point as reserves form key assets for the company Oil companies such as the SUPERMAJORS who have shares lis-ted on major stock markets must conform to regulations concerning how they book oil and gas assets Royal Dutch Shell triggered a global scandal in 2004 when it was forced to admit that it had overbooked many of its assets
Brent crudeThe leading global benchmark for Atlantic basin crudes it is used to price two thirds of the worlds inter-nationally traded crude supply Brent is a light sweet crude pro-duced in the North Sea which usu-ally trades within a few dollars of WTI See also BENCHMARK CRUDE
British thermal unit (Btu)A unit used to describe the amount of energy released when different
fuels are burned with coal produ-cing 25 million Btu of energy per ton and oil producing 56 million Btu per BARREL
bunkering The illegal removal or theft of oil from a PIPELINE or other distribution system Bunkering is sometimes as simple as drilling a hole in a PIPELINE and collecting the oil in a drum More complex operations involve equipping tankers with false bot-toms to conceal extra-legal ship-ments or to make unauthorised shipments from well site storage tanks Bunkering is a chronic issue in Nigeria and Iraq although it ex-ists in many other countriesThe theft of oil ndash known in Nigeria as ldquobunkeringrdquo ndash along with fraud in the al-location of a controversial fuel subsidy may together have cost the state US $14 billion in 2011
- Financial Times 2010
cap rockA layer of impermeable rock which may trap oil gas or water beneath it
coal bed methane (CBM) NATURAL GAS found in coal beds during underground mining operations Sometimes referred to as coal seam gas (CSG) it is already in significant production in the United States and Canada and enormous resources are proven in Australia and China Glob-ally it makes a modest contribution to the ENERGY MIX but this is expected to increase See also UNCONVENTIONAL ENERGY SOURCES
commerciality A legal term widely applied in con-tracts to describe a situation in which hydrocarbon reserves exist in suffi-cient quantities to justify further in-vestment to bring a field to produc-tion From the moment an operating company declares commerciality a set of regulatory and fiscal conditions kicks in See also RESERVES APPRAISAL WELL GIANT FIELD Further drilling will be required to establish the commerciality of the block SL 2007-01-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
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- Jargon Buster Glossary
-
JARGON BUSTER GLOSSARY 40
001 discovery- Petroleum Economist 2011
completionThe final stage in the installation and development of an oil or gas well en-abling it to begin producing often taken on by oilfield SERVICE COMPANIES
concessionA lease agreement by which an oil company can enjoy the exclusive right to produce oil in any given area as ownership of the oil is transferred from the natural owner such as the state or landowner to the lease hold-er at the WELLHEAD Concessions were used widely in the early days of the oil industry and came to be viewed as symptomatic of exploitation by IOCS particularly the SEVEN SISTERS and were replaced in many countries by PRODUCTION SHARING CONTRACTS But some countries such as the United King-dom and Norway still operate them today See also SERVICE CONTRACT
condensates natural gasLiquid fuels such as ethane butane and pentane which are present in the mix of NATURAL GAS when it comes out of the ground These liquids are con-densed out of gas before they are shipped by PIPELINE and captured for separate sale Also known as natural gas liquids (NGLs) See also WET GAS
consortiumA group of companies which join forces to pursue a joint project and may submit joint bids for projects during a LICENSING ROUND The trend in the oil industry over the last genera-tion is for companies to collaborate more and more on a case by case basis forming consortia to share the risk of projects which demand ever high amounts of investment See also JOINT VENTURE PROJECT FINANCING WORKING INTEREST
contingent resourcesRESOURCES estimated to be potentially recoverable but at a given date not commercially viable There is acknow-ledged lack of clarity within the in-
dustry between contingent resources and UNPROVEN RESOURCES
cost recoveryPart of a PRODUCTION SHARING AGREEMENT which allows IOCs to claim and recov-er the investments they made to ex-plore develop and start producing oil The important point to note is that cost recovery comes before any split of profits Cost recovery can often reach billions of dollars It is usually capped at a certain percentage of the value of production in any given year Cost recovery can become a point of contention between companies and governments since governments are often unable to verify the reasonable-ness of costs submitted by the IOCs with their sophisticated accounting and hundreds of global affiliates Such disputes have recently occurred in Indonesia India and Iraq See also PROFIT OIL COST OIL
crackingA second stage refining process which has become widespread in the last 20 years After FRACTIONAL DISTILLATION has produced a range of commer-cially valuable fuel products there are byproducts like tar and bitumen Since demand for these is limited cracking is applied to convert them into more in-demand products such as gasoline and diesel oil by subject-ing them to high temperatures and pressures The term is chemical in origin as the process involves break-ing up or cracking the longer HYDROCARBON chains in the lower value products into the shorter ones in fuel products
crude blendsA mixture of different CRUDE OIL GRADES designed to raise the value of the grades For example a certain grade of HEAVY OIL may not be so commer-cially valuable alone but when mixed with LIGHT OIL the blend produced may be more valuable than the value of the initial volumes of individual heavy and light crude so overall the com-mercial value is increased Blending
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
41 JARGON BUSTER GLOSSARY
can happen either in PIPELINES or at the REFINING stage where a company may seek to be producing a particular mix of fuel products in response to fluctu-ating market demand
crude oilA fossil fuel formed from organic ma-terial over millions of years and ex-tracted directly from the rocks where it is found which can be further pro-cessed into various fuels and PETROCHEMICAL products for consumers NATURAL GAS is often found dissolved in the oil See also PETROLEUM PETROLEUM PRODUCTS ASSOCIATED GAS
crude oil gradesThe qualities of oil from a particular field which determine the steps needed to process it into usable products and its marketability Crude oils can be light or heavy depend-ing on their API GRAVITY INDEX They can also be sour if they contain a lot of sulphur or sweet if they do not Beyond these major characteristics which dictate a crude grades market value when sold against BENCHMARK CRUDES there so many other character-istics that every crude can be chem-ically fingerprinted See also LIGHT OIL HEAVY OIL
dependency natural resourceAlthough the dependency of econom-ies and government spending in many countries has been widely re-ported the International Monetary Fund has provided a formal definition of the concept where natural re-source exports have accounted for either at least 25 of a countrys ex-ports over the previous few years or at least 25 of a governments budget The IMF identified 34 coun-tries which fit that definition in 2008 Natural resource dependency is linked to the concept of RESOURCE CURSE
depletionThe decline in production that begins to appear in oil reservoirs as RESOURCES become exhausted Global depletion is currently estimated at between 3 and 5 per year The impact can be
managed by implementing suitable depletion policies such as ENHANCED OIL RECOVERY See also HUBBERT CURVE PEAK OIL PLATEAU PRODUCTIONThe most important depletion policy instru-ments have been the frequency in licens-ing rounds awards of licenses and use of the fiscal system
- Chatham House 2010
development wellA well drilled at an existing oil field which is already producing Many fields require continuous drilling of new wells to maximise production and development wells can far out-number the WILD CAT WELLS that were made to discover the resource in the first place
dieselOne of a series of PETROLEUM PRODUCTS produced out of CRUDE OIL during FRACTIONAL DISTILLATION commonly used to power our cars as a heavier alternat-ive to PETROL using a special compres-sion engine Diesel is also widely used by military vehicles
discovery wellsee WILDCAT WELL
downstreamThe series of operations that take place once oil has been found and produced out of the wellhead Some-times divided into midstream and downstream with transport and the REFINING process taking place mid-stream and marketing and distribu-tion occurring in the downstream phase See also UPSTREAM INTEGRATED ENERGY COMPANYConocoPhillips announced it would separ-ate its profitable upstream oil exploration and production business from the low-mar-gin ldquodownstreamrdquo jobs of refining and mar-keting
- Economist 2011
drilling mudA mixture of clay water and chemic-als pumped down a well to make drilling more effective by lubricating and cooling the mechanism and flushing rock cuttings to the surface
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
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- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
JARGON BUSTER GLOSSARY 42
Also known as drilling fluids
dry wellA well which is drilled but fails to pro-duce oil or gas in commercially viable quantities Sometimes known as a DRY HOLE See also COMMERCIALITY APPRAISAL WELL DEVELOPMENT WELL
Dubai crudeOne of three global BENCHMARK CRUDE oils Also known as Fateh it is produced in the United Arab Emirates and was for many years the only CRUDE OIL GRADE in the Middle East freely traded on the SPOT MARKET
Dutch diseaseA factor in the RESOURCE CURSE so named after the crisis following large gas dis-coveries in the Netherlands in the 1960s whereby large inflows of for-eign PETRODOLLARS can have damaging consequences for an economy As the local currency appreciates the produ-cing countrys non-commodity ex-ports become less competitive on world markets and inflation can oc-cur on the domestic market
elephant fieldA field with RESERVES totalling over 1 bil-lion barrels See also GIANT FIELD
energy mix The combination of energy sources used to satisfy a country or regions energy consumption The energy mix evolves over time in response to changing lifestyles and technologies For example oil has dropped from about half of global primary energy consumption in 1973 when the oil crisis tripled prices overnight to about a third today while use of NATURAL GAS has risen particularly with the development of SHALE GAS Many countries are now trying to diversify their mix to maximise modern renew-ables such as solar and wind power which now account for 3 of total global energy consumption A diversified mix of energies will increase security of supply
- European Commission 2007
energy securityThe concept that energy is so essen-tial to modern economies that gov-ernments need to plan to ensure se-curity of access even when the in-dustry itself is in the hands of the private sector This often involves try-ing to diversify energy sources For example the USA seeks to diversify from Middle Eastern oil or Europe from Russian gas
enhanced oil recovery (EOR) A set of technologies to increase the RECOVERY RATE of a producing field and offset DEPLETION Methods can include injecting natural gas chemicals or water into a field to increase pres-sure as well as HORIZONTAL DRILLING They account for an increasingly important part of global oil production See also DEPLETION
environmental impact assessments (EIA)
Carried out by companies before be-ginning a project to identify any pos-sible environmental social or eco-nomic impacts both positive and negative and any measures needed to mitigate Contracts now often spe-cify the implementation of such stud-ies but although various best practice initiatives exist at a global level such as those of the Global Reporting Initi-ative in Amsterdam or the Interna-tional Petroleum Industry Environ-mental Conservation Association (IPIECA) in London they are rarely specified in contract EIAs are rarely made public existing as a document held between companies and host governments
Extractive Industries Transparency Initiative (EITI)
The major existing TRANSPARENCY mech-anism in the oil industry EITI started in 2002 and now has 35 countries as members or candidates To achieve compliance a government and the oil companies have to release informa-tion about the payments they have made to each other in a process overseen by civil society EITIs cur-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
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- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
43 JARGON BUSTER GLOSSARY
rent chair is the British politician Clare Short
farmout agreementThe sale of rights to a discovery once oil has been struck Also known as a farm-down this is a common prac-tice among smaller exploration com-panies funded by seed and venture capital but who cannot then bear the costs of getting the oil out of the ground alone The farmee usually pays the farmor a sum on signature and bears a proportion of operational costs There may or may not be an agreement for the farmee to be in-volved in actual production activities See also WORKING INTEREST
flaring gas Oil production is sometimes accom-panied by ASSOCIATED GAS When infra-structure to capture the gas does not exist the gas is often burned at the wellhead or flared to get rid of it This is a waste of energy as well as a source of greenhouse gas According to the World Bank the top five gas flaring countries in the world are Rus-sia (26) Nigeria (11) Iran (8) Iraq (7) and Algeria (4) The Glob-al Gas Flaring Reduction partnership was set up in 2002 to address the problem grouping companies gov-ernments and international agencies such as the UN The World Bank es-timates the total amount of gas flared was reduced by 22 between 2005 and 2010The annual 35 bcm of gas flared in Africa alone is equal to half the continentrsquos power consumption
- Financial Times 2012
floating liquefied natural gas (FLNG)A concept being developed by Royal Dutch Shell to access OFFSHORE gas fields which might otherwise remain stranded Instead of the need for costly seabed PIPELINES to onshore pro-cessing facilities the idea is to build a platform which floats above the field on the sea surface and can liquify the gas into LNG ready for shipping dir-ectly to market The first FLNG facility
is due to be completed in 2017
frackingsee HYDRAULIC FRACTURING
fractional distillationHow crude oil is refined into usable products like PETROL and NATURAL GAS Crude oil enters one of a series of chambers each one hotter than the last Individual products such as DIESEL or GAS OIL are distilled out of the mix at each stage
frontier explorationHigh-risk exploration activities in un-chartered territories or in challenging environments such as Somalia See also WILDCAT WELL
fuel oilOne of the heavier more viscous products obtained from the FRACTIONAL DISTILLATION of crude oil Fuel oil mostly has industrial uses in engines and fur-naces
futures contractAn agreement between two parties to buy and sell a specified quantity of CRUDE OIL with the price agreed today and the delivery and payment to take place at a specified date in the fu-ture The main crude oil futures mar-kets are the New York Mercantile Ex-change (NYMEX) and the Intercontin-ental Exchange (ICE) Futures com-bine with the SPOT MARKET to form the overall trading environment for oil and gas
gas to liquids (GTL)see LIQUEFACTION
gasolinesee PETROL
giant fieldSometimes defined in terms of RESERVES (exceeding one billion barrels) and sometimes in terms of production output (exceeding 100000 BARRELS PER DAY) Even larger super-giant fields are generally those whose reserves ex-ceed five or even ten billion barrels However the definitions remain con-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
JARGON BUSTER GLOSSARY 44
tested See also ELEPHANT FIELD
groundwaterWater held in rocks beneath the wa-ter table It can be polluted or de-pleted during the drilling process particularly HYDRAULIC FRACTURING See also ENVIRONMENTAL IMPACT ASSESSMENT
gusherA well from which oil gushes without being pumped and an icon of oil ex-ploration during the 19th and 20th centuries perhaps most memorably depicted in the 1956 film Giant star-ring James Dean Nowadays thought of as wasteful and polluting gushers usually happen as the result of tech-nical failures
heavy oilMore viscous grade of crude oil with a lower API GRAVITY than LIGHT OIL Produc-tion of heavy oil is becoming more common around the world despite greater extraction and processing costs because light oil supplies have dwindled Extra-heavy oil such as that found in the Orinoco belt of Venezuela is generally defined as having an even lower API Gravity of 7 to 11deg See also OIL SANDS
horizontal drillingA type of directional drilling which al-lows drillers to access pockets of re-serves that are harder to reach by a vertical well often used as a cost-ef-fective technique at OFFSHORE locations In 1990 Iraqi leader Saddam Hussein accused Kuwait of using horizontal drilling to steal Iraqi oil and used it as a pretext to invade in the first Gulf War See also ENHANCED RECOVERY
hydraulic fracturingAlso known as FRACKING it involves shooting water sand and other com-pounds at rock structures at such high velocity that they produce small fractures through which CRUDE OIL and NATURAL GAS can then be extracted The development of fracturing in the United States since 2005 has led to a massive increase in SHALE GAS produc-tion despite environmental and
safety concerns associated with the procedure See also ENHANCED OIL RECOVERY
hydrocarbonsCompound existing exclusively of hy-drogen and carbon the majority of naturally occurring hydrocarbons are found in CRUDE OIL and all oil and gas products as well as coal are hydrocar-bons
Hubberts curveA mathematical model developed in 1956 by the US geologist Marion King Hubbert which depicts the life cycle of a drilling operation as a bell shaped curve and predicts extraction rates will slow once peak production at a field has been reached It is widely disputed but is seen as the foundation of PEAK OIL theory See also DEPLETION PLATEAU PRODUCTION
International Energy Agency (IEA)Created in 1974 in response to the oil crisis the IEA first had the mandate of coordinating energy policy among consumer countries particularly glob-al disruptions of supply Based in Par-is it has evolved into an influential government-sponsored think tank and is sometimes seen as the con-sumers OPEC
integrated energy companyA company active in all stages of the value chain from exploration through production to shipping and refining to distribution and retail marketing of fuel products Most SUPERMAJORS are in-tegrated energy companies
international oil company (IOC)A private sector oil company with op-erations in many countries The largest IOCs are SUPERMAJORS and the largest historically were the SEVEN SISTERS The term is often used in con-trast to NATIONAL OIL COMPANIES state-owned entities created after waves of RESOURCE NATIONALISM in the 1960s and 1970s led to nationalisation of the sector in many countries
joint venture (JV)A well-established feature of the oil
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
45 JARGON BUSTER GLOSSARY
and gas industry whereby two or more companies agree to share profit loss and control in a certain project common in the UPSTREAM sec-tor where projects can be too big for a single company to finance on its own Partners can be from both the public and private sectorsJVs are a useful way of gaining the bene-fits of collaboration without the economic and political risk associated with a merger or other business combination
- Ernst amp Young 2011
kerosene The primary source of fuel for many types of aircraft produced from FRACTIONAL DISTILLATION Until the invention of electricity it was the main source of lighting in the home as it was used in lanterns and it was the most widely used product of PETROLEUM be-fore the invention of the motor car
LIBORThe London Interbank Overnight Rate a rate of interest often used in the financial terms which govern oil contracts
licensing roundAn event at which oil and gas acre-age is opened up by a government to competing bids by exploration and production companies or consorti-ums Licenses are then awarded to the most attractive bid Competitive and TRANSPARENT licensing rounds are seen as key to efficient management of a nations resources and are often implemented by using auctions which publicly state the criteria under which bids will be judged See also BLOCK WORKING INTEREST
light oilLight crude oil is made up of smaller molecules than HEAVY CRUDE OIL and therefore produces a higher percent-age of commercially valuable products (like gasoline and diesel) when refined thus fetching a higher price on global markets See also GRADES OF CRUDE OIL HEAVY OIL
liquefactionConversion of gases to liquid form usually for ease of storage andor transport
liquefied natural gas (LNG) NATURAL GAS which has been converted into liquid form by cooling it to ap-proximately minus162 degC (minus260 degF) for ease of storage and transport This expensive process is used when a gas pipeline is unavailable to transport the gas produced to the marketplace The first LNG plant was built in Alger-ia in 1962 Qatar accounts for 25 per-cent of global LNG production LNGs market position has been challenged in recent years by the explosive growth in SHALE GAS inside the United States leading to recalculations of how much gas the US once seen as a major LNG market will import in fu-ture years See also LIQUEFACTION
liquid petroleum gas (LPG)Often referred to as liquefied petro-leum gas an example of an ASSOCIATED GAS produced as a byproduct of oil ex-traction and refining which is popular as a fuel for domestic use in India and other countries without reliable oil or natural gas supplies
local contentThe purchasing of local goods and services and training and develop-ment of national staff as a result of oil production with the goal from the host government side of maximising broader economic growth as a result of the oil industry and building na-tional expertise which over time al-lows full national control of the in-dustry Local content is often a nego-tiation point between companies and governments stipulated in the terms of contracts Brazil is sometimes seen as one of the most successful ex-amples of local content application
meteringMeasuring the amount of oil or gas produced out of a well or flowing down a PIPELINE for commercial pur-poses Meters can now measure
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
JARGON BUSTER GLOSSARY 46
many different CRUDE OIL GRADES flowing down one pipe to up to 015 percent accuracy See also BUNKERING
midstream see DOWNSTREAM
migrationThe process whereby conventional oil and gas resources gradually migrate away from the SOURCE ROCK where they were generated into CAP ROCK which im-pedes their rising to the surface and leaking It can take millions of years for oil and gas deposits to migrate a few kilometres within rock forma-tions
mudssee DRILLING MUD
naphthaSimilar in form to petrol (gasoline) naphtha is produced from FRACTIONAL DISTILLATION It is primarily used in the chemical industry including to make lighter fluid cleaning solvents and fuel for camp stoves and can also be further refined through CRACKING to pro-duce more valuable products such as high octane gasoline
national oil company (NOC)A state-owned oil exploration and production company usually used in contrast to the idea of IOCS Because of the wave of nationalisations caused by RESOURCE NATIONALISM the NOCs now represent 18 out of the biggest 20 oil companies in the world measured in terms of their oil and gas assets Some NOCs are run on corpor-atised lines and have started to com-pete internationally notably CNPC from China Algerias Sonatrach Pet-ronas from Malaysia and Petrobras from Brazil Petrobras and Colombias Ecopetrol also have minority private sector shareholders
natural gasPrimarily methane It occurs naturally and is used as a fuel
natural gas condensatessee CONDENSATES NATURAL GAS
nodding donkeyA device used in oil production when the pressure inside a well is not suffi-cient to force oil to the surface con-sisting of a long beam which dips in and out of the well to extract crude A common feature of oil landscapes also known as a pumpjack or grasshopper pump
non-associated gasNATURAL GAS found in reservoirs where no liquid HYDROCARBONS are present or where no significant quantities of li-quid hydrocarbons exist Contrasts with ASSOCIATED GAS
offshoreThe drilling of wells into the seabed Offshore drilling began in the nine-teenth century and significant pro-duction was achieved on Venezuelas Lake Maracaibo in the 1920s but modern techniques began in the Gulf of Mexico in the 1940s Offshore is generally regarded as drilling that takes place on the continental shelf in less than 200 metres of water but in recent years deep offshore has evolved with drilling in water deeper than 2000 metres Offshore is often controversial because of environ-mental risks but is a growing com-ponent of global production and is particularly significant to production in Brazil West Africa the Gulf of Mex-ico and increasingly the Levantine basin See also PRE-SALT
oil in place (OIP) CRUDE OIL estimated to exist in a field or a reservoir Not all that oil will be extracted however because of the properties of a rock formation The exact percentage will depend on the RECOVERY RATE
oil sandsAn UNCONVENTIONAL ENERGY SOURCE made up of a mixture of sand water and BITUMEN Usual techniques cannot be applied here and extraction often re-sembles mining more than conven-tional drilling using techniques that are far more energy- and capital in-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
47 JARGON BUSTER GLOSSARY
tensive Oil sands have only recently been included in the worldacutes oil re-serves due to high oil prices and technological advances The largest deposits currently known are the Ath-abasca tar sands in Canada See also HEAVY OIL
oil-backed loanA loan in which future oil revenues are pledged as collateral by a produ-cing country A prominent feature of Chinese engagement in resource-rich African countries such as Angola and Nigeria and often used to finance large infrastructure projectsIf the Government of South Sudan feels that oil-backed loans are currently neces-sary to prevent economic collapse it is crit-ical that robust protections are put in place to minimize future costs and con-sequences
- Global Witness 2012
oilfield service companiessee SERVICE COMPANIES
OPECThe Organization of the Petroleum Ex-porting Countries a cartel formed in 1961 through which 12 member states agree on a shared quota for the production and sale of petroleum OPEC is intimately linked to the rise of RESOURCE NATIONALISM and the industry in all of its member states is domin-ated by NATIONAL OIL COMPANIES As of 2012 OPEC produced about 40 per-cent of the worldrsquos oil With its large share of global production OPEC has become effective in determining the price of oil on international markets but there can be sharp divergence of interests between its various mem-bers who are all in different situ-ations as regards their state of DEPLETION and degree of DEPENDENCY on oil revenues See also SWING PRODUCER
operator The company within a CONSORTIUM with overall decision-making authority at an operational level on an oil or gas project usually also with the greatest financial stake See also JOINT VENTURE WORKING INTEREST
Peak Oil The controversial idea that the world will soon run out of oil and gas Everyone agrees that oil and gas as depletable resources in contrast to re-newables will run out sometime But peak oil says that moment is very close because global oil production has already peaked The theory relies on HUBBERTS CURVE
petrochemicalsChemicals derived from PETROLEUM or other fossil fuels largely used in the plastics industry There are currently 4000 chemicals classified as petro-chemicals
petrodollarSince oil sales are generally denomin-ated in US dollars petrodollars are the funds from oil sales The dollar denomination has had implications for linkages between the oil industry and the US economy which has led some producers notably Venezuela in recent years to debate ending it
petrolOr gasoline one of the key products of crude oil used mostly for transport
petroleumThe term of art to denote both crude oil and petroleum products produced by REFINING The terms oil and petro-leum are sometimes used inter-changeably
pipelineA pipe usually underground used to transport oil or gas over long dis-tances Although pipelines can be constructed underwater most oil transport by sea is done by tankers Because pipelines are so expensive and significant ones often cross mul-tiple national borders pipeline nego-tiations often involve complex geo-politics
plateau productionKeeping production out of a mature oilfield steady for a number of years This usually involves using ENHANCED OIL RECOVERY techniques to mitigate
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
JARGON BUSTER GLOSSARY 48
DEPLETION
playA slang term commonly used in the industry for an investment decision International players are taking a closer look at Australias Cooper-basin shale play
- Petroleum Economist 2012
possible reservesHave a 10 percent certainty of being produced Combined with PROVEN RESERVES and PROBABLE RESERVES in the in-dustry term 3P See also RESERVES
pre-salt Oil and gas deposits that are found beneath huge layers of salt deep in the rocks Pre-salt deposits could not be exploited commercially until re-cently because of technological limit-ations but now represent a significant portion of projected future finds The most famous pre-salt region is Brazils Tupi field under 2000 metres of wa-ter and a further 5000 metres of salt sand and rock See also OFFSHORE
probable reservesHave a 50 percent certainty of being produced under current market condi-tions Probable and PROVEN RESERVES are often combined in a definition known as 2P which is the most common way to assess the amount of oil a field is likely to produce See also RESERVES
production sharing contract (PSC)An agreement between a company and a host country on the percentage of oil each party will receive after specified costs and expenses have been paid under COST RECOVERY Under a PSC the company generally gives the state cash payments in the form of ROYALTIES and income tax Also known as a production sharing agreement (PSA) See also CONCESSION SERVICE CONTRACT
profit oilThe portion of revenues divided up between participating parties and a host government in a PRODUCTION SHARING CONTRACT once the operator has re-
covered its investment by deducting COST OIL productionAs the profit oil is split between the com-panies and the state the cost of ldquoallowable expendituresrdquo is passed on to the state in the form of reduced profit oil
- Civil Society Coalition on Oil in Uganda 2010
project financing Arrangements for capital linked to in-dividual production projects Even SUPERMAJOR oil companies use financing from banks and financial instruments such as bonds extensively because of the increasingly capital-intensive nature of oil exploration and produc-tion Global investment in UPSTREAM has risen from about US $100 billion in 2000 to about $600 billion in 2011 a level which the industry anticipates is likely to hold or rise in the next dec-ade
prospective resources see RESOURCES
proven reservesClassified as having a 90 percent cer-tainty of being produced at current prices with current commercial terms and government consent and are also known in industry as 1P See also RESERVES
recovery rate The amount of oil that will be extrac-ted compared to the amount of oil in place Historically rates of 25 percent were common but rates are now rising to 50 percent and above be-cause of extensive use of ENHANCED OIL RECOVERY
refiningProcesses which convert crude oil and gas into usable products such as FRACTIONAL DISTILLATION and CRACKING Refin-ing is a huge industry in its own right but with volatile profit margins in re-cent years which have caused some INTEGRATED ENERGY COMPANIES to consider getting out of it
rentA revenue stream that accrues above
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
49 JARGON BUSTER GLOSSARY
and beyond a normal economic re-turn on activity or profit The concept was first developed by economists Adam Smith and David Ricardo in the 18th and 19th centuries It dominates the economics of the global oil in-dustry because of sharply varying costs of production for a commodity sold at roughly the same price For example it could cost US $5 to pro-duce a barrel of oil in Libya and $60 in some fields in Canada yet both sell for the same price meaning the mar-gins are massively different Econom-ists differentiate between rent and a normal return on capital or profit and argue that it should be treated differently Rent encourages rent-seeking an integral part of the concept of RESOURCE CURSE
reservesA subset of oil and gas RESOURCES which are commercially viable to ex-tract Definitions used around the world still differ somewhat but there is increasing standardisation under a series of definitions produced by the US Society of Petroleum Engineers (SPE) Reserves are further divided into the sub-categories PROVEN RESERVES PROBABLE RESERVES AND POSSIBLE RESERVES Classification of reserves can be cru-cial to the value of a company as it is a key way for a company to show its assets through BOOKING RESERVES
reserves-production ratio The number of years a country can continue producing at its current rate given the level of its PROVEN RESERVES BPs Statistical Analysis for 2012 es-timated the global RP ratio at 54 years At one end of the spectrum are the United States Norway and the United Kingdom with respectively 10 nine and seven years production left At the other Saudi Arabia has 65 years left Kuwait 97 years and Iran 99 years
resource diplomacyThe use of state diplomacy to negoti-ate access to natural resources For example the United States has used
resource diplomacy in the Gulf and China is increasingly using it in Africa
resource nationalismThe political feeling that control of natural resources should be in the hands of the countries which own them Resource nationalism grew in the oil industry as a result of domin-ance by the SEVEN SISTERS and led to the creation of OPEC and nationalisa-tion of the industry in many coun-tries leading to the rise of the NATIONAL OIL COMPANIES
resource-backed loanssee OIL-BACKED LOANS
resourcesAll quantities of petroleum which are known to exist including those which are not at that time considered to be commercially viable to extract This can change as technology develops and with higher oil prices For ex-ample the OIL SANDS were previously classified as RESOURCES but are now RESERVES
resource curse The theory that natural resource wealth can sometimes paradoxically create negative development out-comes in producing countries due to weakened government institutions neglect of other key sectors of the economy (known as DUTCH DISEASE) corruption high income inequality and pollution Sometimes called the paradox of plenty See also RENTSThe resource curse is not inevitable Whats needed is transparency and ac-countability
- Petroleum Economist 2011
royaltiesA percentage share of production or of the value of the production which goes to the government regardless of the rate of production or costs to the operator Royalty rates often change incrementally as production in-creases In calculating revenue flows from an oil project royalties take pre-cedence with other categories such as COST OIL and PROFIT OIL subordinate
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
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- Jargon Buster Glossary
-
JARGON BUSTER GLOSSARY 50
CONCESSION type contracts are almost entirely based on royalties
royalty interestIn contrast with a WORKING INTEREST the ownership of a portion of revenues produced from an operation without bearing the ongoing production costs See also ROYALTY PRODUCTION SHARING CONTRACTIts generally recommended that investors without deep pockets and a solid working knowledge of oil and gas exploration stick with limited liability royalty interests
- Investopedia
sedimentary basinGeologically areas where there have been huge deposits of organic matter millions of years ago which may then have become compacted and cooked into oil and gas Because of continental shifts and other geologic-al movements such areas can now be deep inland even if they were ori-ginally underwater For example the Texas and Oklahoma oilfields of the United States are part of a sediment-ary basin formed in what was an ex-tended Gulf of Mexico while in Libya oil-bearing formations of the Sirte Basin extend a thousand kilometres inland into the Sahara desert See also CAP ROCK ANTICLINEThe sedimentary basins in New Zealand that are likely to contain oil and gas are young (less than 80 million years old)
- Encyclopedia of New Zealand 2012
seismic surveyTechnology similar to ultrasound used to build a picture of underground rock structures during early stage oil and gas exploration Seismic works by sending out sound pulses and using the measurements of how and when they return to estimate rock struc-tures since different kinds of rock of-fer different levels of resistance to the signals Combined with informa-tion from an APPRAISAL WELL these sur-veys form the basis for further invest-ment decisions Seismic data has in-creased exponentially in recent years with the development of data acquisi-
tion and interpretation technology See also ANTICLINE SOURCE ROCK COMMERCIALITY
service companiesOil companies which do everything but actually own or bid on resources with governments The oil industry has been subject to outsourcing since the 1980s meaning that SUPERMAJORS of-ten contract large parts of their oper-ations to service companies The largest such as Schlumberger and Halliburton employ tens of thousands of employees and can win single field contracts worth hundreds of millions of dollars
service contractsAn agreement whereby a foreign oil company is contracted to produce a countrys oil reserves on a simple fee basis The state maintains sole rights over the RESERVES and the contractor is compensated by a fee per barrel plus COST RECOVERY See also PRODUCTION SHARING CONTRACT CONCESSION
Seven SistersA term coined in the 1950s to de-scribe the oil companies which dom-inated the early years of the global oil industry They were Anglo-Persian Oil Company (now BP) Gulf Oil Standard Oil of California (Socal) and Texaco (now Chevron) Royal Dutch Shell Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil) See also INTERNATIONAL OIL COMPANY
shale gasNATURAL GAS formed from being trapped within shale rock formations cur-rently the source of 20 percent of US natural gas production due to the in-crease in HYDRAULIC FRACTURING or FRACKING and predicted to increase in import-ance in the future by the EIA
showing oil or gasWhen a company announces that oil has been found in an exploratory well Exploration companies often use showings to make dramatic public an-nouncements to boost their profile
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
51 JARGON BUSTER GLOSSARY
and share price but a showing does not necessarily mean that COMMERCIALITY will be declared
signature bonus Lump sum of money paid up front by companies to governments upon signing a PRODUCTION SHARING CONTRACT or CONCESSION agreement Sometimes used as the deciding factor in a tie-breaker between biddersUnder the last bid round in Libya Occi-dental paid $1 billion as a signature bonus
slant drillingsee HORIZONTAL DRILLING
sour oilCRUDE OIL GRADES which have high sul-phur decreasing their market value in contrast to SWEET OIL
source rockOrganic-matter rich rocks- typically shales sandstones or carbonates- in which petroleum forms if it is subjec-ted to high temperatures over pro-longed periods of time See also CAP ROCK
sovereign wealth fund (SWF)Government-held investment funds to hold budgetary surplus often result-ing from RENTS as a method of better managing resource revenues by in-vesting rather than spending and in-creasingly popular as an attempt to shield against the RESOURCE CURSE In 2012 SWFs were estimated to hold nearly US $5 trillionAlthough sovereign-wealth funds hold a bare 2 of the assets traded throughout the world they are growing fast
- Economist 2008
spot marketThe global market where oil can be traded dynamically Before the spot market appeared in the 1970s oil was traded largely in long-term fixed contracts But now a single shipment of oil can be traded up to ten times from the time it leaves a producing country to the time it reaches port
spuddingThe very start of the drilling process at a new well by getting rid of any bits of rock dirt or other sediment
stabilisation fundA fund used to smooth government income between one year and the next to mitigate the high volatility of revenues that economies with natural resource DEPENDENCY suffer from Stabil-isation funds are different to SOVEREIGN WEALTH FUNDS
strategic reservesGovernment-held stocks of crude to guarantee a country against econom-ic breakdown in the case of major world turbulence and a key part of ENERGY SECURITY These reserves were de-veloped after the 1973 oil crisis Up to five billion barrels are held globally in such reserves with the United States alone holding nearly a billion barrels
subsidies energy Most oil exporting countries have tra-ditionally heavily subsidised energy at home Over time the cost of these subsidies has become crippling to many state budgets but they are al-most impossible to remove politically
subsoil rights Who owns resources under the ground In many countries subsoil rights belong to the state which is why the state develops an oil industry when deposits are found In the United States by contrast subsoil rights attach to the landowner at the surface which is what triggered oil rushes in Texas Oklahoma and else-where
super-giant fieldsee GIANT FIELD
supermajorThe worlds largest publicly owned oil and gas companies and the modern day equivalent of the SEVEN SISTERS considered to be BP Chevron Exxon-Mobil Royal Dutch Shell and Total with ConocoPhillips sometimes also
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
JARGON BUSTER GLOSSARY 52
included See also INTERNATIONAL OIL COMPANY
sweet oilCRUDE OIL GRADES which have low sul-phur increasing their market value in contrast to SOUR OIL
swing producer A country which has production capa-city significantly above what its actu-al levels of production are allowing it to raise production overnight and therefore lower market prices Saudi Arabia has been the sole swing pro-ducer for the last 30 years Other countries such as Iraq and Libya sometimes debate a similar role
tar sandssee OIL SANDS
tight hole A drilling well about which all inform-ation is kept confidential most often used for APPRAISAL WELLS
transit feesFees charged by a country to allow oil or gas to be transported across its territory either by pipeline or through shipping channels such as the Suez and Panama Canals
transparencyImproved access to information such as revenues prices and contract terms helping to follow the money and prevent corruption Transparency first emerged as a high profile norm in the 1990s as issues of governance came to dominate the global debate on development A growing move-ment demanding greater transpar-ency in the oil and gas industry centres around the EITI initiative See also RENT AND RENT-SEEKINGTransparency of payments made from a company to a government can help to demonstrate the contribution that their in-vestment makes to a country
- EITI
unconventional energy sourcesAny resources accessed by means other than the conventional oil well
method This is an umbrella term that shifts over time but currently used to refer to sources such as SHALE GAS COAL BED METHANE and OIL SANDSWhile these reserves may hold the key to the future oil supply companies must deal with the additional time cost and resources it takes to extract the unconventional oil
- Financial Times 2010
unitisationThe way a single oil bearing rock formation is divided by two countries when it straddles a border For ex-ample the United Kingdom and Nor-way have a unitisation agreement in the North Sea Unitisation requires agreed borders but since the oil could be sucked from one side of the border to the other also goes beyond it to require agreement and coopera-tion on geological studies and produc-tion figures
unproven reserves
An umbrella term for PROBABLE RESERVES and POSSIBLE RESERVESsee RESERVES
upstreamThe capital-intensive high risk-high reward initial stages of the industry involving exploration and production See also MIDSTREAM DOWNSTREAM INTEGRATED ENERGY COMPANY
ventingWhen ASSOCIATED GAS is simply released into the atmosphere Venting is even more harmful to the environment than FLARING since methane is many times more potent as a greenhouse gas than the carbon dioxide produced when it is burned
well completionsee COMPLETION
West Texas Intermediate (WTI)The US crude oil BENCHMARK tradition-ally trading within a few dollars of BRENT CRUDE It is a LIGHT OIL with a low sulphur content so it is considered to be a high quality crude See also BENCHMARK CRUDES
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-
53 JARGON BUSTER GLOSSARY
wet gasNATURAL GAS containing other hydrocar-bons that condense as the gas rises to the surface and lower temperat-ures than existed in the reservoir Typically wet gas contains less than 85 percent methane The natural gas liquids are generally separated from the methane to ensure that the nat-ural gas sent to consumers has a con-sistent thermal energy content though wet gas is sometimes more valuable than DRY GAS as the liquids are themselves sellable commodities such as butane See also DRY GAS CONDENSATES
wildcat wellAn exploratory well into rock struc-tures not known to contain oil RESOURCES under conditions of little or no geological certainty A high risk make or break venture for drilling companies If the well is in a field that has not produced before it is known as a new-field wildcat If it is more than 3 kilometres away from any pro-ducing well it is called a rank wild-cat If the well discovers oil it is known as the discovery well of that field See also APPRAISAL WELL DEVELOPMENT WELL
working interestThe percentage stake taken by a company in an oil or gas operation where they are liable for a proportion of the ongoing operating costs but also has a claim to a share of the profits This contrasts with a ROYALTY INTEREST See also PRODUCTION SHARING CONTRACT COST RECOVERY
- Foreword
- Big Data to Play With
- Oil and Gas Media
- Top 10 Blogs
- Top 20 Twitter Feeds
- What the Wonks Say
- What the Suits Say
- Jargon Buster Glossary
-