Month: July 2009

The landowner’s share of net oil / gas production, taken in the form of crude oil / natural gas rather than in cash

Europe’s largest oil company. In 2004 Shell was gripped by a scandal when it admitted it had overstated their proven reserves and had to revise them down by 20%, which lead to regulatory probes and law suites as well as fines of $150 million.

The UK’s main natural gas storage facility on the Rough Field in the North Sea. It is an offshore storage that originally belonged to BG which set it up as a storage facility about 20 years ago as a strategic storage to support the grid if it failed or if one of their major gas fields fell over. It can supply about 1.5 bcf of gas per day for approximately 100 days. The gas is received from the national transmission system and it is mainly used today as a trading pool, namely to buy gas and store it when it is cheaper and sell it off on days when the gas is more expensive.

There are two main types of onshore drilling for natural gas. Rotary drilling consists of a sharp, rotating metal bit used to drill through the Earth’s crust. The drill bit is connected to and rotated by a drill stem, which also provides a passageway through which the drilling fluid (mud usually) is circulated. This type of drilling is used primarily for deeper wells that may be under high downhole pressure. The other method, percussion /cable tool drilling, consists of raising and dropping a heavy metal bit into the ground, effectively punching a hole down through the Earth.

Russian State-owned integrated oil giant Rosneft conducts oil and gas exploration and production activities on Sakhalin Island, in Siberia, in the Timan-Pechora region, and in southern Russia. The company has proved reserves of 14.9 billion barrels of oil equivalent. It also owns and operates two refineries. Rosneft also operates shipping and pipeline companies, as well as more than 680 gasoline stations. BP acquired a $1 billion stake in the company.

Uneven and steep seabed conditions may require the use of rock to support and stabilize the seafloor for pipeline construction. Pipelines can also sometimes be protected (such as from ships’ anchors) through mattressing and spot rock dumping. >

Prices of oil have been rising due to several reasons: Supply issues with production declines in certain oil producing countries such as Mexico, an unstable oil industry in Venezuela and Nigeria and possible shrinking production capacity in the Middle East; a weak dollar and political instability in some oil-producing countries; a tight market due to increasing demand in developing countries such as China and India, speculative traders bidding up the price as a hedge against inflation and as protection from the sinking U.S. dollar; the fact that it is becoming harder and more expensive for oil companies to find and tap new petroleum reserves; forecasts that the world’s energy needs will escalate by more than 50 percent in the next two decades, etc. Several other factors contributed to the run-up in oil prices. World oil production decreased slightly between 2005 and 2007. Declining production from mature oil fields in the North Sea and Mexico played a role, as did political instability in Nigeria. Saudi Arabian production, which many analysts had expected to increase to meet rising demand, fell by 850,000 bbl a day between 2005 and 2007. These declines were enough to offset production gains in places such as Angola and Central Asia, with the result that total global oil production dropped slightly. Meanwhile, demand continued to grow, with world petroleum consumption increasing by 5 million b/d during 2004 and 2005 driven largely by a 9.4% increase in global gross domestic product. Over the next two years, 2006 and 2007, world GDP grew an additional 10.1% which, in the absence of an increase in the price of oil, would have produced further big increases in quantities consumed. Even with price increases, Chinese oil consumption increased by 870,000 b/d between 2005 and 2007. With no more oil being produced, that meant that residents of the US, Europe, and Japan had to reduce consumption by a comparable amount. The price of oil needed to rise by whatever it took for these western consumers to do so. Consumers finally began to respond when gasoline’s US average price was more than $4/gal > >

In property law, an easement to use another’s land for passage. The land and legal right to use and service the land along which a transmission line is located. For the OCS, a right-of-way is most commonly used for pipelines that cross lands that the operator does not control entirely by lease.

An interest in a well or property that becomes effective at a specified time in the future or on the occurrence of a specified future event. The right of future possession of an interest in a property when a specified condition has been met. Such as when Australian company Origin acquired its CSG assets from Tri-Star Petroleum in 2002, it gave Tri-Star the right to take back 45 per cent of its share in each field once it had achieved payback, which is judged on a formula linked to Origin’s capital and other costs, which mean Origin could be compelled to hand a significant proportion back to Tri-Star Petroleum.