SpeakingOilGas

FOB – free on board, where a buyer of a cargo of petroleum or petroleum product arranges the shipping from the seller’s port.

formation interval test – see wireline test.

FPSO – a floating production storage and offtake (offloading) vessel

fraccing – a process used to improve the permeability of a tight reservoir. A specially blended fluid, charged with proppants like sand or aluminium pellets, is pumped down a well at high pressure to force passageways into the rock. The proppants keep them open once the pressure is released.

gas cap – the natural accumulation of associated gas in the top of an oil reservoir.

gas oil – a medium distilled oil from the refining process that is intermediate between light lubricating oils and kerosene. Used to produce diesel fuel and in heating and air conditioning systems.

gas/oil ratio (GOR) – the ratio of gas to oil by volume, measured during a production test.

gazettal – the advertisement of permits by the government calling for applications for exploration licences.

geophones – microphones used in seismic surveys to electronically pick up returning shock waves and pass them on to the recording equipment.

geo-steering – a modern drilling technique in which a hydraulic motor turns the drilling bit independently of the drill string. A bend in the motor housing enables the trajectory of the well to be changed as the full weight of the drill string bears down on the bit.

gross pay – the total thickness of a reservoir rock, including the impervious layers which do not contain hydrocarbons.

guyed tower – a type of offshore production platform surrounded by a series of cables anchored in the sea bed to hold it in place, much like the guy ropes of a tent.

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heavy crude – crude oil with high viscosity and high specific gravity. The API classifies heavy oil as crudes with a gravity below 22.3° API.

hedging – forward selling of petroleum shipments at a price believed to be competitive when the physical cargo is available.

heli-rig – a land rig capable of being broken down into loads small enough to be carried by a helicopter. Usually used in inaccessible terrain to replace land transport.

horizontal drilling – a technique for deviating wells through up to 90 degrees from the vertical, usually to produce thin reservoirs by exposing more of the oil zone to the well perforations.

hydrocarbon kitchen – the part of a sedimentary basin containing mature petroleum source rocks.Ageneral term for conditions deep in the subsurface rich in organic sediments which, with the necessary burial history (heat and pressure) generate significant amounts of hydrocarbons.

hydrophones – the marine equivalent of geophones.

infill drilling – production wells drilled between existing wells to increase hydrocarbon recovery. Often the wells are drilled to reach oil or gas stranded by the rising water drive in a reservoir and unable to flow to the original wells.

injection well – a well through which water or gas is injected to maintain reservoir pressure.

in situ (in place) – refers to total oil or gas reserves contained in a reservoir in the ground as opposed to those reserves which may be recovered.

isogals – contour lines drawn through points of equal gravity values and referring to the ‘gal’ which is the unit of gravity measurement.

jacket – the leg section of an offshore production platform, so called because it surrounds and protects the well conductors as well as supporting the deck and its equipment.

jack-up – a type of mobile drilling rig which jacks its legs down to the sea bed and then hoists its deck and drill floor above the sea surface.

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jet bit – a drilling bit with nozzles through which fluids like air, mud or water are forced under pressure, thus breaking up the formation to be penetrated.

J-lay – an offshore pipe laying technique in which the pipeline is lowered vertically to the sea bed from the lay barge and then allowed to bend in a J-curve shape as the vessel moves forward adding new sections of pipe.

joint venture – a group of companies or individuals who share the cost and rewards of exploring for and producing oil or gas from a permit.

kelly – hexagonal or square pipe about 15 metres long attached to the top of the drill string and turned by the rotary table. It is used to transmit the twisting movement from the rotary machinery to the drill string and thus the bit.

kelly bushing – a piece of equipment which fits around the kelly at the point where it passes through the rotary table. It is often used as a datum from which to measure the depth of a well.

kerogen – the organic matter which is the base for the formation of oil or gas.

kick – a sudden influx of high pressure into a well, usually experienced while drilling.

kill – the process of increasing drilling fluid weight to control a potential blowout.

landmen – generally only applicable in the USA where the rights to subsurface minerals are often owned by private individuals. These individuals are entitled to ask for a royalty on any oil or gas production from their portion of the subsurface. These subsurface rights began by being attached to the surface landholding of the original landholder. However, they can be bequeathed or sold and onsold separately to the surface rights, such that after a period of time it is difficult for an oil explorer to trace who actually owns the rights in question and who to deal with when negotiating royalties. Landmen are employed by the oil explorers specifically to unravel the paper trail and find the royalty holders in the lease they want to drill.

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lay barge – a specially designed vessel used to lay a pipeline along the sea bed.

lease – a specific area of land or sea bed marked out by a government and usually put up for tender. The successful bidder is given exclusive right to explore for oil and gas for a specified length of time provided it upholds the work program mentioned in the winning bid and obeys the set conditions of the leasehold agreement.

light crude – generally refers to crude oil with an API gravity of 30 degrees or more.

liner – steel tube of small diameter extending into a producing reservoir from the bottom of the last string of casing in a well.

lithology – a study of the rock types in a given region, including descriptions of mineral content.

LNG – liquefied natural gas.

LNG train – the liquefaction of natural gas to form LNG is carried out in a refrigeration unit that has four main elements in the cooling cycle — a compressor, a condenser, a pressure-expansion valve and an evaporator. A single liquefaction unit is called a train. An LNG plant may comprise just one train. Larger plants comprise a number of trains arranged side by side each doing exactly that same liquefaction task.

logging tools – devices lowered down a well to measure various parameters and properties of the formations being drilled (electric loop).

LPG – liquefied petroleum gas, usually refers to propane and butane.

marine riser – the conductor pipe for offshore wells. It extends from the drill floor to the sea bed.

marker crude – a commonly traded crude oil in a particular region that is used as a quality standard to price other crudes.

mercaptans – compounds of carbon, hydrogen and sulphur found in sour crude and natural gas which have a strong, repulsive odour. They are re-introduced in small amounts as a safety measure so that the presence of sales (retail) gas can be detected by smell.

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migration – the movement of oil/gas from a petroleum source rock into and then within a reservoir rock.

monkey board – the small platform high in the derrick of a rig occupied by the derrickman when guiding stands of drill pipe and casing to and from storage racks during drilling operations.

moonpool – the open hole in the centre of the hull of a drillship through which drilling takes place.

mud logging – this includes routine geological examination of drill cuttings from a well, plus a record of the variations in drilling rate, mud pumping pressure, depths of formation changes and an analysis of the mud for oil and gas traces.

naphtha – a collective name given to a range of distillates covering the heavier end of the gaseous fuel and the light end of the kerosene range.

net pay – the aggregate thickness of only those parts of the reservoir which contain and produce hydrocarbons.

nuclear logs – a measurement of gamma rays and thermal neutrons from downhole formations which can be used to determine rock porosity and lithology.

on stream – in production.

open hole – refers to a well which has no casing or which is cased only to the top of the reservoir section.

operator – the company which organises the exploration and production programs in a permit on behalf of all the interest holders in the permit.

override interest – this occurs when a company holding the permit sells all its working interest to an incoming party in return for an agreed percentage of the proceeds from any commercial discovery.

P1 reserves – see proved reserves.

P2 reserves – see probable reserves.

P3 reserves – see possible reserves.

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packer – a device (often rubber) which seals off a section of the well during testing.

paper crude – crude oil which is sold on the futures market, but which will not be physically produced for several months or longer.

pay zone – a formation within a reservoir containing producible hydrocarbons.

percussion drilling – a system whereby the drill bit penetrates rock with a hammer action. The drill can either be dropped using its own weight and gravity or it can be pressure driven into a rock face.

perforations – holes punched through the casing of a well at the pay zone to allow oil and gas to enter the well.

permeability – the degree to which fluids can move through a rock.

permit – an area of specified size within a sedimentary basin which is licensed or allocated to a company or companies by the government for the purpose of exploring for and producing oil and gas. In Australia separate licences are issued for exploration and production.

petroleum resource rent tax (PRRT) – a form of profit-based tax which applies after a producing oil/gas project has reached a set rate of return. The tax itself is levied at specified percentage. Usually exploration and development costs can be deducted from cash flow so they are recouped before tax trigger or threshold is reached.

pig – a mechanical device sent through a pipeline to scour the inside walls or to run internal checks on the integrity of the line.

plug – a seal deliberately placed in a well to prevent escape of high pressure material from the substance after it has been abandoned. Usually plugs are of cement.

plugged and abandoned – where all the reservoir and high pressure zones in a well are sealed off with cement so that no fluids can escape after the drilling rig leaves the location.

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porosity – a measure of the pore space within a rock and expressed as a percentage of volume.

possible reserves – those unproved reserves which analysis of geological and engineering data suggests are less likely to be recoverable than probable reserves. In this context, when probabilistic methods are used, there should be at least a 10 per cent probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable plus possible reserves. [Society of Petroleum Engineers, www.spe.org]

probable reserves – are those unproved reserves which analysis of geological and engineering data suggests are more likely than not to be recoverable. In this context, when probabilistic methods are used, there should be at least a 50 per cent probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable reserves. [Society of Petroleum Engineers, www.spe.org]

production platform – a fixed facility on an offshore field from which development wells are drilled. It carries all the associated processing plant and other equipment needed to keep the wells flowing and treat the oil and gas once it reaches the onboard wellheads, as well as accommodation. See also jacket.

production sharing contract – see PSC.

production test – a test conducted in a well to assess its production potential by measuring pressures and fluid volumes produced through various choke sizes at specified time intervals.

production well – see development well.

proppant (propping agent) – a granular substance such as sand grains, aluminium pellets, glass balls and in the early days even walnut shells, that are carried in suspension in a fluid that is injected into a formation at high pressure during a well fraccing program to improve the permeability of a reservoir. The proppant keeps the newly made fractures open when the fluid is withdrawn.

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proved reserves – are those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods, and government regulations. If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90 per cent probability that the quantities actually recovered will equal or exceed the estimate. [Society of Petroleum Engineers, www.spe.org]

PSC – production sharing contract, where an oil company is contracted to explore for and produce oil and gas under pre-set arrangements to share the proceeds with the host government or its national petroleum company.

recovery factor – the amount of oil or gas that can be recovered from a reservoir is considerably less than the total volume of hydrocarbons actually in place. Recovery factor is expressed as a percentage of the total reserves believed to be in place.

refinery – an installation that manufactures finished petroleum products from crude oil, unfinished oils, natural gas liquids and other hydrocarbons.

reservoir – a rock or formation which holds hydrocarbons within the pore spaces between individual grains.

retention lease – a permit enabling a company to keep ownership of a hydrocarbon discovery that is not commercial at the time of discovery, but that may be in the future if parameters change, such as a higher oil price or the discovery of significant new fields nearby.

rolling cutter bit – a bit with hardened steel or tungsten carbide teeth of varying lengths and spacings mounted on three roller cones.

rotary drilling – a system whereby a bit is forced against a rock face and mechanically rotated to penetrate the various formations.

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rotary swivel – the part of a rotary drilling rig which connects the travelling block to the drill string.

rotary table – a flat plate in the drill floor which is turned mechanically at varying speeds and directions imparting the rotary action to the drill string which passes through its centre.

roughneck – a rig worker who handles the drill pipe and other equipment on the drill floor.

round trip – the complete operation of pulling out the drill string from a well (for instance to change a bit) and then running it back into the well.

roustabout – a general labourer on a rig.

safety case – where government sets broad safety goals to be attained at industrial facilities and the companies concerned develop the most appropriate methods for achieving those goals. The basic tenet is that the ongoing management of safety is the responsibility of the operator and not the regulator.

sales gas – natural gas that is sold into the distributor/retail market after being treated to remove impurities.

sand lenses – porous sandstone reservoirs that are completely surrounded by fine-grained impervious rocks. The lenses are often buried river beds or deltas.

sedimentary cycle – the period encompassing an encroachment of the sea over the land and then a subsequent withdrawal of the sea.

seep – a point where migrating oil or gas, not already trapped, reaches the earth’s surface.

seismic survey – a method of determining the subsurface features by sending sound waves into the various buried rock layers in the earth and measuring the time they take to return to the surface.

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semi-submersible – an offshore drilling vessel which has its deck supported by columns fixed to pontoons which can be ballasted below the wave action and provide a stable drilling base.

shale shaker – equipment near the rig floor which separates the drill cuttings from the drilling mud.

side wall coring – is the extraction of a small core of rock from the side of a drill hole. It is obtained by lowering a percussion gun to the required depth and firing a small core tube into the well wall. The core in the tube is then pulled back to the surface.

sidetracking – when a well is deliberately deviated around an obstruction or branched off part way down a completed well to reach another part of the reservoir.

slim hole drilling – drilling a hole where 90 per cent of its length has a diameter of seven inches (180 millimetres) or less. The smaller hole and casing sizes result in reduced costs and are sometimes used in the initial phase of an exploration drilling program.

slug catcher – a device which uses a very long length of pipe to create a pressure drop in an incoming natural gas pipeline sufficient to allow ‘slugs’ of associated heavier hydrocarbons like condensate to drop out and be separated from the gas flow.

sour crude – crude oil that contains appreciable amounts of sulphur compounds.

spot market – the sale of individual shipments of crude oil priced at the international market rate at the time of sale.

spud date – the date when drilling of a well begins.

spud in – to begin drilling. To start a well.

stinger – a ramp or boom mounted on the stern of a lay barge used to gradually lower the pipe onto the sea bed.

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