Category: Oil and Gas business

The difference between the cost of the crude oil purchased by an oil refinery and the sale price of the refined products

Computer Teacher

Fuel moisture content is a measure of the amount of moisture (water) that is present in a fuel.

Crude oil washing is a system whereby oil tanks on a tanker are cleaned out between voyages not with water, but with crude oil – the cargo itself.  The solvent action of the crude oil makes the cleaning process far more effective than when water is used. There is usually a final water rinse but the amount of water involved is very low. The system helps prevent pollution of the seas from operational measures. COW is mandatory on new tankers under the International Convention for the Prevention of Pollution by Ships

An oil or gas reservoir has to be capped by impervious rock in order to form an effective seal that prevents the gas from escaping upward or laterally

The United States Gasoline Fund is a new way for investors and hedgers to manage their exposure to energy. The United States Gasoline Fund is an exchange traded security that is designed to track in percentage terms the movements of gasoline prices. UGA issues units that may be purchased and sold on the NYSE Arca. The investment objective of UGA is for the changes in percentage terms of its units’ net asset value to reflect the changes in percentage terms of the price of gasoline, as measured by the changes in the price of the futures contract on unleaded gasoline traded on the New York Mercantile Exchange that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire, less UGA’s expenses

A number of risks are associated with these activities including inaccurate interpretation of data; unexpected drilling conditions; inadequate human or technical resource; subsurface risks; engineering, technical and mechanical risks; stakeholder risk, including misalignment of objectives; commercial risk; legal and regulatory risks, including the risk of compliance failures; political risks; failure to assess accurately the project schedule and cost; failure to select the most suitable development concept; cost and time overruns; health, safety, security and environmental (HSSE) risks; equipment shortages; unscheduled outages; and gas pipeline system constraints. In addition, Inflation in raw materials and in the costs of goods and services from industry suppliers and manufacturers presents risks to project economics. In addition, a company’s production volumes (and therefore revenues) are dependent on the continued performance of its production assets which are subject to a number of operational risks including those relating to equipment or limited plant availability due to plant maintenance or shutdowns; asset integrity and HSSE incidents (Hydrocarbon production and operations in harsh and remote working environments present a number of HSSE risks. These risks could result in injury or loss of life, damage to the environment or loss of certain facilities); adverse reserves recovery from the field; the performance of joint venture partners; and exposure to natural hazards such as extreme weather events.

There is what is known as the horns of the classic dilemma all developing world oil and gas producers eventually face. Namely, the delicate balance of how to determine how best to satisfy domestic energy demand whilst still leaving sufficient oil and gas left over for export. This is a circle few hydrocarbon producers have managed to square, as it involves juggling a number of balls. As a country’s national revenue rises from the sale of oil and gas, the domestic demand for energy rises as its wealthier citizens demand more cars, electrical consumer goods, etc. However, given that national oil and gas resources are expensive to develop it is inevitable that tension between an increasingly energy hungry population and the state’s need to earn greater amounts of foreign exchange will rise until a tipping point is reached. Indonesia for instance reached the tipping point for oil leading it to leave OPEC in 2008 on the grounds that it was no longer a net exporter. Analysts believe that it could reach a similar point for gas as the government decides to sacrifice LNG exports in favor or satisfying its rising domestic market.

All these terms refer to long term LNG contracts. LNG projects require substantial capital investments in liquefaction trains and other supply infrastructure, which developers must have assurance that they can recover. Therefore most LNG is traded under long term contracts, typically of 10-20 years duration.

The term was coined in 1977 by the Economist. The deindustrialization of a country’s economy that occurs when the discovery of a natural resource such as oil or gas raises the value of that nation’s currency vis-a-vis foreign currency, making goods manufactured in that country less competitive with other nations, increasing imports and decreasing exports. The term originated in Holland after the discovery of North Sea gas.