Category: Oil and Gas business

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

Positive and negative revisions, extensions, new reservoir discoveries in old fields, and new field discoveries that occurred during the report year

Term to define that a rig has arrived to its required location, an announcement which is often made by an O&G company prior to rigging up and start of operations

A permeable rock that may contain oil or gas in appreciable quantity and through which petroleum may migrate. For rocks to contain oil and gas they must have two important properties: (1) a place to store the oil and gas, namely the pores. The more pores the more oil or gas that can be contained in the rock which is measured in terms of a rock’s porosity. Porosity is expressed as the volume percent of the rock that contains open space and can range from 5 to 30%. (2) Permeability – The pores must be connected so that the oil and gas can move through the rock, which is known as the rock’s permeability. Permeability is measured in thousandths of a darcy or millidarcys. Sandstone and carbonate rocks are generally the most porous and permeable rocks

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.

Traditional measures of profitability. Profit returns divided by the volume of resources devoted to the activity. Although oil and gas companies’ profits have risen to record highs as the price of oil has soared, their profitability as measured by return on capital employed has stagnated. In the upstream side of the business average return on capital in 2007 was just 1% point higher than in 2004 even though the average price of a barrel of oil was $30 higher. One of the reasons for this is because capacity shortages in the supply chain, in everything from drilling rigs to steel pipes to skilled staff, have caused costs of exploration and production to rise in line with their revenues. Indeed, services companies, which work for the oil producers have typically done much better out of the boom in the industry.

The disclosure of an O&G company’s reserves should provide a better reflection of the underlying value of the company than its balance sheet. The balance sheet records the historical costs associated with drilling for, development of or acquisition of oil, and not the value of the oil and gas interests. The reserves disclosure, while not perfect, helps investors to fill this information gap. Thus by monitoring movements in the reserves report in terms of both volume and value, the investor should have a clearer understanding of both the current value and the historical performance of the management in adding value (see also reserves report). Some reserves are booked at project sanction – normally a low case number – then more reserves are usually booked during field life as more production data becomes available – these are known as reserves addition or reserves growth. Booking is done in accordance with the US SEC guidelines as well as the national guidelines in some countries. Most important, for booking to take place, the reserves must be economically recoverable using current technology and economic assumptions within a sanctioned project which has all the regulatory approvals in place

Agreement to reserve a slot for the use of a rig