Category: Oil and Gas business

Gas price parity is defined (as a percentage) as the relationship between gas prices compared to oil prices.

Parity = Gas Price divided by oil price * conversion factor

When oil is at $100 a barrel, gas price parity with oil would equate to around $17.2 per million British thermal unit of natural gas.

Some gas exporting countries believe that natural gas is too cheap and should be the same price as oil. These entities explain that gas is often more expensive to produce and has added qualities, such as environmental, to oil. Already the market for Asian long term LNG contracts is trending towards oil-price parity.
During certain periods, natural gas prices have been seen to follow the price of crude oil very closely, so that for instance in July 2008 when oil was $144/bbl the price of natural gas reached a peak of $13.69 mmbtu and when oil came crushing down within six months, thus natural gas fell to $3 mmbtu, a fall of 80%. However, over the last couple of years this link has been severed and oil and gas trade based on their own unique fundamentals

Exploration offshore Israel focused on six main plays: Syrian Arc anticlines; Mesozoic platform-edge, structural-stratigraphic traps; the Dead Sea graben; Early Mesozoic structures; Saqiye Group biogenic gas; and Hula Group biogenic gas.

A type of rock containing organic matter that produces large amounts of oil when heated to high temperatures. A dark-colored shale containing an unusual amount of solid organic material. This shale can be crushed and heated to liberate gaseous and liquid hydrocarbons.

The term offshore indicates a portion of open sea and, by induction, the activities carried out in such area, while onshore refers to land operations

Accumulation pool or group of pools of oil in the subsurface. An oil field consists of a reservoir in a shape that will trap hydrocarbons and that is covered by an impermeable or sealing rock. The geographic area above an underground accumulation of oil and natural gas

A formation or horizon of a well from which oil may be produced. The oil zone is usually immediately under the gas zone and on top of the water zone if all three fluids are present and segregated

The drilling mechanism used for drilling into the sea floor is much the same as can be found on an onshore rig. However, while with onshore drilling the ground provides a platform from which to drill, at sea an artificial drilling platform must be constructed. Drilling offshore dates back to 1869, when one of the first patents was granted to T.F. Rowland for his offshore drilling rig design. It wasn’t until after 1947 that the first offshore well was drilled in the Gulf of Mexico.