The energy industry is full of industry specific jargon that can make it difficult for an outsider to understand exactly what they are reading. Have you ever wondered exactly what the difference is between tight oil, shale oil and oil shale? Read on for those terms and more explained in a succinct, easy to digest form.
API gravity - The American Petroleum Institute gravity is a measure of how heavy or light a petroleum liquid is compared to water.
Barrel of oil (bbl) – A unit of volume for oil that equates to 42 US gallons or 159 litres.
Barrel of oil equivalent (BOE) – A unit equivalent to the amount of energy found in a barrel of crude oil. This is approximately 5.8 million British Thermal Units (MBtus) or 1,700 kilowatt hours (kWh).
Brent oil – A light, sweet crude oil sourced from fifteen fields in the North Sea. Brent is the traditional benchmark of global supply and demand for oil.
British Thermal Units (BTU) – The amount of heat energy needed to raise the temperature of one pound of water by one degree Fahrenheit. This is the standard measurement used to state the amount of energy that a fuel has as well as the amount of output of any heat generating device.
Conventional oil – Oil produced by a traditional well requiring a relatively low energy input. Conventional oil flows through a well without stimulation and through a pipeline without processing or dilution.
Crude oil – Synonymous with petroleum.
Development Well - A well drilled in a proven producing area for the production of oil or gas.
Downstream – The sector of the oil and gas industry that is involved with the refining of crude oil and the processing and purifying of raw natural gas as well as the marketing of the products derived from fossil fuels.
Economically recoverable reserves - The volume of petroleum which is recoverable using current exploration and production technology while still being economically viable. Synonymous with proved reserves.
EIA – United States Energy Information Administration. They provide official energy statistics from the U.S. Government.
Exploratory Well – A well drilled in an unproven area that an oil or gas company hopes will be successful.
Fracking – Short for hydraulic fracturing, the process of injecting a high pressure mixture of sand, water and chemicals into rock formations in an effort to increase the flow of oil and gas by creating and widening cracks in the rock.
Futures – A financial contract that obligates the buyer to purchase an asset (or the seller to sell an asset) such as oil at a predetermined future date and price.
IEA – International Energy Agency. Implements an international program of energy cooperation among 28 member countries. Established in 1974 in the wake of the 1973 oil crisis.
Light oil- Refers to the ability of the oil to flow freely which makes it easier to transport and refine.
Natural Gas Liquids (NGL) - Components of natural gas that are artificially separated from the gas state in the form of liquids. Natural gas liquids as classified based on their vapour pressure:
Low = condensate
Intermediate = natural gas
High = liquefied petroleum gas
Low = condensate
Intermediate = natural gas
High = liquefied petroleum gas
Oil in place - The total estimated amount of oil in an oil reservoir, including both producible and non-producible oil.
Oil shale – Any fine-grained sedimentary rock that contains solid organic matter (kerogen) and yields significant quantities of oil when heated.
Oil sands - Sand and rock material which contains crude bitumen (a heavy, viscous form of crude oil).
OPEC – Organization of the Petroleum Exporting Countries. An intergovernmental organization originally formed in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela to coordinate and unify petroleum policies amongst member countries.
Peak oil – The point at which the maximum amount of oil possible is produced after which oil production enters terminal decline. While proven for individual wells and countries it has yet to be conclusively proven on a global scale.
Play – A group of oil or gas fields or prospects in the same geographical area that display similar geological properties.
Possible reserves -– Reserves which cannot be regarded as “probable” and are estimated to have a significant but less than 50 percent chance of being technically and economically recoverable. Referred to as P10 or P20 reserves
Petroleum – Synonymous with crude oil.
Proved reserves - The volume of petroleum which is recoverable using current exploration and production technology while still being economically viable. Synonymous with proved reserves. Referred to as P90 reserves.
Probable reserves – Reserves which are estimated to have a better than 50% chance of being technically and economically producible. Referred to as P50 reserves.
Liquefied Natural Gas (LNG) – A natural gas consisting mainly of methane (CH4) that has been converted to a liquid form for ease of transport or storage.
Reserves – The producible fraction of oil that can be brought to the surface due to reservoir characteristics and limitations in petroleum extraction technologies.
Shale Oil – An unconventional oil produced from oil shale in an energy intensive process.
Sour oil - Oil that has a relatively high sulphur content, typically over 0.42 percent.
Sweet oil – Oil that has a low sulphur content, typically lower than 0.42 percent. This oil sells at a premium to sour oil as it easier to process into high quality products.
Tight oil – Light crude oil contained in petroleum-bearing formations of relatively low porosity and permeability. Commonly extracted by using hydraulic fracturing. It should not be confused with shale oil as it differs by the API gravity and viscosity of the fluids, as well as the method of extraction.
Tar sands - Synonymous with oil sands but typically not used by the oil industry due to the negative connotations of the word “tar.” More commonly used by environmental groups.
Technically recoverable reserves - The volume of petroleum which is recoverable using current exploration and production technology without regard to cost, which is a proportion of the estimated in-place resource.
Upstream - The sector of the oil and gas industry responsible for exploration, drilling of exploratory wells, and subsequently drilling and operating the wells that recover and bring the crude oil and/or raw natural gas to the surface.
Unconventional oil – Oil that is produced by techniques other than traditional oil well extraction. The primary sources of unconventional oil are oil sands, oil shale and tight sands.
Undulating plateau - A phase where oil production and consumption cycle around the horizontal over a period of time. This appears to have been the state of the global oil supply since 2005.
URR – Ultimately recoverable resource. An estimate of the total amount of oil that will ever be recovered and produced. It is a subjective estimate based on only partial information.
WTI – West Texas Oil is lighter and sweeter than Brent and sourced from around North America. It is priced from the trading hub of Cushing, Oklahoma.
