05.07.2009

Term used by international oil companies to describe a new trend by nation states, such as in the Middle East, Russia and in South America, by governments determined to keep full control of their petroleum resources and not to share profits, even at the expense of more efficient exploitation techniques and greater financial ability of the IOCs and thus increasingly shutting out the IOC from promising regions. Saudi Arabia for instance the top holder of oil reserves does not allow foreign exploration. Even where IOCs are still welcome, such as in Nigeria, Algeria and Angola the governments attempt to renegotiate the contracts to capture a bigger share of the profits

R/P ratios represent the length of time that remaining reserves would last if production were to continue at the previous year’s rate.

It is calculated by dividing remaining reserves at the end of the year by the production in that year. The world’s oil R/P ratio in 2006 was 40.5 years compared to 41 years in 1996 and 39.8 years in 1986. The world’s natural gas R/P ratio was 63.3 years in 2006

Amount of oil or gas in a reserve that can be produced. Generally reserves refer to the volume of technically and commercially recoverable hydrocarbons in an oil and/or gas reservoir (as opposed to the total volume of oil or gas in place, much of which may not be recoverable using current technology and in current market conditions). In general, reserves can be broken down into two main categories – proved reserves, and other reserves. Proved reserves are those reserves that geological and engineering data indicate with reasonable certainty to be recoverable today, or in the near future, with current technology and under current economic conditions.

According to the EIA reasonable certainty’ implies that there is a 90 percent probability that the natural gas actually recovered from those reserves will exceed the amount that is estimated beforehand to be recoverable. Proved reserves can be found as the ‘on the books’ reserves in operational and financial data of natural gas exploration and production companies, carrying with them economic implications for the company.

These companies have economic incentives to not overstate these ‘on the books’ estimations of their reserves as this classification carries with it a high degree of certainty. Other reserves are those that are less well known than proved reserves. This classification goes by many names. They may be called probable reserves, possible reserves, indicated reserves, or inferred reserves, to name just a few. Because the quantity and characteristics of these reserves are less well known, the extraction of this natural gas is not completely assured, although there is a relatively high probability that they will be recoverable.

Reserves need to be “booked” in order to go on the Company’s balance sheet. The term “reserves’ is not to be confused with “resources” which denotes oil and gas that may be present even though there is no specific data supporting the estimate, such as when conditions appear to be geologically favorable. Reserves form the key assets in an oil and gas company.

O&G reserves cannot be measured precisely. The estimation process involves subjective judgments & may be subject to revisions, changing regulations, guidelines, tax rules or a decline in the price of oil or gas may also have an effect on reserves & resources. Changes to gas and prices in fields subject to PSC may result in revised entitlements. Changes in perspectives on political risk may also result in R&R changes arising from PSC extension expectations and/or equity reductions.

This is the amount of electricity capacity available in a country over and above consumption during peak hours. In Israel reserves (as of 2008) are about 5% which is extremely low, especially considering that consumption is growing annually at between 3-5%. Currently, IEC’s capacity stands at 11,300 MW

The ratio of additions to reserves divided by production. It is a measure of the extent to which production is being replaced and is an important element of oil and gas companies’ portfolio.

Reserve changes from all sources divided by total production for a given time period.

Drill crew members who handle the loading and unloading of equipment and assist in general operations around the rig

The complete operation of removing the drillstring from the wellbore and running it back in the hole. The operation is usually done when the bit becomes dull or broken and thus no longer drills the rock efficiently

Drill crew members who work on the derrick floor, screwing together the sections of drillpipe when running or pulling a drillstring.

One of the two main markets for oil products. The Rotterdam market is a wholesale market in which the oil companies trade products between themselves