3G (Géologie – Géophysique – Gisement)
A
API
Assessment - Appreciation
C
Carrying out exploration and assessment work
Completion
Concession
Cost Oil
D
DeGolyer and MacNaughton
Density
Deposit
Developing fields
Developing hydrocarbon reserves
Drilling
L
Labor and materials contract
O
Obtaining exploration permits
P
Paraffin
Pipeline
Producing hydrocarbons
Production profile
Production sharing
"Profit Oil"
Proven and Probable Reserves
R
Recovery rate
Reserves
Reservoir
Restoring production sites to their original state
Rig
Royalties
S
Seal
Seismic
Specific gravity
STOOIP
U
Ultimately extractable reserves
W
WTI
3G (Geology – Geophysics – Gisement (reservoir):
Disciplines that, when used together, gives a better understanding of the reservoir.
Top
API :
API, as in American Petroleum Institute.
Assessment - Appreciation:
After an initial borehole has shown the presence of hydrocarbons in a structure being explored, the operator need to appraise the discovery thanks to subsequent drilling programs to define and delimit possibly productive formations.
Barrel :
This is the standard measure in the oil industry. The expression comes from the small barrels in which oil used to be stored before being loaded into the holds of ships. When tankers were introduced, barrels disappeared, but the barrel remains as unit of measurement, equal to 159 litres (42 American gallons). A tonne of oil equals approximately 7.5 barrels.
- BOEPD : Barrel of Oil Equivalent Per Day
Brent :
Crude oil produced in the North Sea; the transactions (physical and on paper– forward market, futures market on the IPE) on Brent and the quotations resulting therefrom are used as a benchmark in Europe and in many other regions to set the prices of other crudes.
Carrying out exploration and assessment work :
When the permit is obtained, Maurel & Prom can undertake the exploration and assessment work (acquisition of seismic surveys, geology and geophysics, reservoir engineering, exploration drilling, etc) to assess the potential of the prospects being explored (see Appendix 1 - Glossary). In accounting terms, the surveys and exploration work, including the geological and geophysics expenses, are recorded as assets on the balance sheet under intangible fixed assets so long as they are not considered completed and an operating permit has not been obtained. Costs of exploration that has not ended in a commercial discovery for a given permit and that culminated in the decision to put a definitive end to the work in that region or on that geological structure are booked as expenses in the year in which the failure is ascertained. Provisions or extraordinary amortizations are booked when the accumulated costs are greater than the discounted cash flow estimates or when technical difficulties are encountered. Depreciations are determined for each exploration permit. Amortization of the exploration expenses is deferred until the date on which production begins.
Completion :
The operation involving the installation of production equipment in a well.
Concession :
The arrangement by which the hydrocarbon exploration and exploitation rights in a given area are granted by the Government to a holder who, in the case of commercial production, becomes the owner of all the production in return for payment to the government of the tax oil applicable (essentially royalties on production and tax on the profits). Concession also means the hydrocarbon mining rights authorizing exploitation, or any agreement that may be attached to these mining rights in certain countries.
"Cost Oil" :
In a production sharing agreement, the fraction of production allocated to the recovery of the contractor’s costs.
DeGolyer and MacNaughton :
A company assessing the hydrocarbon and exploration potential.
Density :
The density API is a classification of oils according to their density, defined by the American Petroleum Institute. To calculate its value, we apply the following formula:( 141,5: d in 16°C) - 131,5, in whom d is the density expressed in grams by cubic centimeter. The degree of density API, varies ""from 0 to 101. The more it is raised, and the more the oil is light.
Deposit :
This can be defined as a receptacle made from permeable and porous reservoir rock and enclosed by an impermeable rock, known as the seal, and by special subsoil, known as the trap. The reservoir rock must have sufficient interior volume to hold a large enough quantity of hydrocarbons to justify exploitation. It is not uncommon to find hydrocarbons during exploration drilling. On the other hand, it is very rare to find an accumulation that would constitute a real deposit.
Developing fields :
The development phase is the phase during which Maurel & Prom provides the architecture and begins construction of the hydrocarbon production and transport infrastructures.
Developing hydrocarbon reserves :
Maurel & Prom must renew its hydrocarbon reserves. Maurel & Prom’s reserves can be renewed by working on new oil or gas prospects or by acquiring additional interests in permits on which Maurel & Prom is already operating. The cost of obtaining these supplementary interests, corresponding in reality to the acquisition of new reserves, is recorded as an intangible asset and amortized by the unit of production method.
Drilling :
Drilling consists of making a passageway through the earth, in order to take samples from the subsoil or to extract fluid substances. Originally, drilling was always done vertically. Today, however, when this cannot be done, inclined holes are drilled and directed, or not, towards specific targets, as in directional drilling.
Exploration :
Oil exploration (or prospecting) is aimed at discovering accumulations of exploitable gas or liquid hydrocarbons. These reservoirs are found at varying depths in sedimentary basins where they are found by drilling. The oil and gas cannot usually be detected directly from the surface. So the locating of exploration drilling is preceded by a series of reconnaissance operations culminating in the definition of a sounding installation.
Fixed price, turnkey contract :
A type of contract, signed between an oil-related services company and an oil company. Unlike the contract on a labor, materials and price list basis, the contractor is responsible for the operations and is paid for services rendered.
Geological Cut :
The earth is formed by successive geological layers. A geological cut is a vertical diagram of these different stacked layers, with their characteristics, as they are seen on the surface, or during drilling.
GOR :
Comme Gaz oil ratio
Hydrocarbons :
Hydrogen carbides, or hydrocarbons, exist in very large quantities. Crude oil consists mainly of carbon and hydrogen, but different arrangements of these molecules give natural hydrocarbons very different properties. The simplest hydrocarbons – those with the smallest molecules – are the constituents of natural gas and gas oil.
Injection :
Method consisting in returning used geothermal fluids to the Earth. Also called "reinjection".
Labor and materials contract :
The type of contract, signed between the oil-related services company and an oil company by which the oil company controls the operations and the contractor receives a fixed daily payment.
Obtaining exploration permits :
To be able to do the exploration work, Maurel & Prom has to obtain exploration or mining permits from the host states. These permits give the Company the right to do the exploration work in a particular region, in return for a commitment to the government of the host state to complete a certain volume of work and/or pay an amount in cash. This amount is recorded in intangible assets and is amortized on a straight line basis throughout the estimated duration of the permit or in line with the amortization of the oil production installations. If the permit is withdrawn or the prospecting fails, the remaining amortization is recorded all at once.
Paraffin :
Paraffin is an undesirable element in lubricating oils, because it reduces fluidity at low temperature. The paraffin must therefore be removed, by dissolving it – generally using propane – and then filtering it out at a very low temperature (from - 35° to - 45°). The effect of the cold separates it from the oil by crystallisation.
Pipeline :
This is a pipeline for the transportation of fluids. Specially designed, these pipelines can be called “oil mains” or “gas mains”. Generally reserved for transport over long distances, pipelines are made of high grade steel and may reach up to 1.5 metres in diameter. With the exception of some desert regions, they are generally buried underground.
Producing hydrocarbons :
Production may begin when Maurel & Prom has obtained an operating permit and is sure of a commercial outlet. At the time of the transition to the production phase, the exploration expenses are transferred to tangible assets. The fixed assets of petroleum production include all the expenses relating to the exploration and development of the fields (exploration and operation drilling, surface installations, oil pumping systems, etc) as soon as they are considered complete. The fixed assets that are not yet complete at year end are recorded as fixed assets in progress, their amortization being deferred until the end of the work in progress. Completed fixed assets are amortized by unit of production. For those concerning a complete field (pipelines - surface units, etc), the rate of amortization equals the ratio of hydrocarbon production of the field during the year over the proven and probable reserves at the beginning of the year that they are capable of handling. For the fixed assets dedicated to specific regions of the field, the level of reserves used in calculating the rate of amortization is the level of proven reserves developed in the region. Where appropriate, if insufficient data is available to determine the developed proven reserves, the proven reserves are used in the amortization calculation. The reserves included are the reserves based on analyses by independent organizations. Provisions for extraordinary depreciation or amortization are booked when the total costs are greater than the discounted cash flow estimates or when technical difficulties are encountered. Depreciations are determined for each operating permit.
Production profile :
The evolution over time of the production level of a reservoir. When exploitation of a reservoir begins, production increases sharply before leveling out for a few years (production plateau) and then declines gradually.
Production sharing :
An arrangement whereby the hydrocarbon exploration and exploitation rights in a given zone are granted by the State to a holder who, in the event of commercial production, can be reimbursed to cover his costs over a fraction of the production (cost oil) and is paid over a part of the remaining fraction (profit oil), the other portion going to the State.
"Profit Oil" :
In a production sharing agreement, the fraction of production that remains after cost oil. This fraction is shared between the contractor and the State according to the terms agreed in the contract.
Proven and Probable Reserves :
Proven reserves are the quantities of hydrocarbons that it is thought can be extracted from a known reservoir. They are calculated on the basis of geological and physical knowledge of the reservoir, the extraction methods used, and according to current economic conditions. In the best cases, proven reserves can be validated to within 10%. Probable reserves are the quantities of hydrocarbons that it is hoped will be extracted from a given reservoir, but with less certainty than with proven reserves.
Recovery rate :
The ratio between reserves and resources (approximately 20 to 30% for oil and 80% for gas).
Reserves :
All resources available for presentation and future requirements.
1P = P1 = proven ; P2 = probable ; P3 = possible
2P = P1 + P2 = proven + probable
3P = P1 + P2 + P3 = proven + probable + possible
Reservoir :
This term refers to the layer that contains the hydrocarbons in a deposit. The reservoir may be made of a number of productive layers, of very different types, separated by sterile layers.
Restoring production sites to their original state :
When production on a deposit is complete, Maurel & Prom is contractually bound to restore the production sites to their original state. Consequently, Maurel & Prom makes provisions for site restoration and records them as provisions for contingencies and charges at the rate of amortization of the oil production installations. They are estimated by country and by field.
Rig :
Drilling rig.
Royalties :
In the concession system, the owner of the subsoil grants an operator the right to produce oil in return for payment of royalties, fixed as a percentage of the crude price. The royalties may vary depending on the price of the crude and the features of the reservoir.
Seal :
See deposit.
Seismic :
This is an essential geophysical method that involves emitting waves, or series of waves, into the substrata and recording their return using groups of sensors. These waves are then combined, in an extremely complex manner, using very powerful computers, to obtain “images” of the sub-strata (comparable to scanner images of the human body). Seismic is one of the basic and essential methods used in oil exploration.
Specific gravity :
API specific gravity is a classification of oils based on their specific gravity, as defined by the American Petroleum Institute. To calculate its value, the following formula is applied: (141.5: sg at 16°C) – 131.5, in which sg is the specific gravity expressed in grams per cubic centimetre. The degree of API specific gravity varies from “0” to “101”. The higher its value, the lighter the oil.
STOOIP :
STOOIP as in Stock Tank Original Oil In Place. Reserves in place, or STOOIP, refers to the amount of oil originally contained in a rock formation, expressed as barrels at stock-tank conditions (i.e., under atmospheric pressure and room temperature).
Ultimately extractable reserves :
(or oil in place) These are non-extracted reserves, added to production under standard conditions.
WTI :
West Texas Intermediate, the crude benchmark in the United States.
