Category: Oil and Gas business

When a license holder gives up/sales and another entity acquires/buys an interest in a block by taking over all or part of the financial commitment for drilling an exploration well

This is the term used to described that distance which is considered the safe minimum distance that needs to be kept between natural gas infrastructure works and other infrastructure and/or activities, due to the risks involved should an explosion occur as a result of gas works.

Estimate of the producing capacity of a field during a 24-hour period

The reduction in volume of natural gas due to the removal of natural gas liquid constituents such as ethane, propane, and butane at natural gas processing plants

That exploration phase of an oil and gas right (such as the budget, programs) are usually agreed between the partners on an annually basis

The percentage of participating interest in a license that is assigned and transferred from the farmor to the farmee in a farmout agreement

Additions to an enterprise’s proved reserves that result from (1) extension of the proved acreage of previously discovered (old) reserves through additional drilling in periods subsequent to discovery and (2) discovery of new fields with proved reserves or of new reservoirs of proved reserves in old fields.

The pressure of the natural gas as it is found in the underground formations from which it is produced

Oil exporting countries such as many within OPEC talk about a “fair” price for oil, rather than what the market is willing to pay. Saudi Arabia has put a fair price tag at about $75 a barrel. Venezuela’s President Chavez has set a fair oil price at between $80-$100. Algeria is believed to require a price of $75-80 to finance its $80 billion budget without having to tap into reserves, borrow or raise taxes. GCC countries have much lower break evens prices, ranging from <$20 (Qatar) to $40 or so (Saudi Arabia) with the others in between. In fact, many believe that Saudi Arabia is content with the current (2009) low cost of oil and that it is in the GCC’s long term economic interest to see lower prices to spur economic growth and petroleum demand. The Saudis seem willing to protect $40 and to limit price increases to $75. On the other hand, there are those who believe that it is not only OPEC that thinks that depressed oil prices may be setting the globe up for another price shock when the economy rebounds: the IEA and the US Department of Energy are among the believers as well, reasoning that crude at such low levels (end of 2008 prices) can lead to a massive pullback on investments in new projects and supply sources. OPEC has recently stated (Dec. 2008) that the bottom price below which the barrel should not drop is between $70-90. Oil prices need to be at levels to help sustain economic growth, by supporting longer-term energy industry investments across the board. Each energy source, each technology, and each project, has a price when it is viable; and a price when it is not. Low oil prices inevitably mean less investment. The cost of developing new oil-production capacity in the Middle East is not more than $10/bbl. However, the economies of the oil-producing countries remain so dependent upon oil revenues that, for many of them, there is little or no money left to invest in new capacity after meeting the costs of running the country when oil prices are at $50/bbl. The Arab Petroleum Investments Corp. concluded that a fair price for oil 'lies at the confluence of oil companies' investment options and oil-producing countries' fiscal needs', implying that it has little or nothing to do with the actual cost of extracting conventional oil in the high reserves countries. >

Drilling carried out to determine whether hydrocarbons are present