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Glossary
This glossary contains commonly used terms in oil and gas leasing and exploration activities. Many of these terms are interesting and unique to the drilling industry.A
- Abandoned
-
A dry hole in which no producible oil or gas was present, or a well that has stopped producing. Abandoned wells must be plugged to prevent seepage of oil, gas, or water from one formation to another.
- Active well
-
A well in mechanical condition for production or service use (i.e., in active production or service use).
- Anticline
-
An upfold or arch of stratified rock in which the beds or
layers bend downward in opposite directions form the crest or axis of
the fold.
- API
-
The American Petroleum Institute is the oil industry's trade organization. API's
research and engineering work provides a basis for establishing
operating and safety standard issues; specifications for the
manufacturing of oil field equipment; and furnishes statistical and other information to related agencies.
- Associated gas
-
Gas combined with oil. Known also as gas cap gas and
solution gas, it provides the drive mechanism needed to force oil to the
surface of a well. Associated gas is normally present in an oil reservoir in the early stages of production.
B
- Barrel
-
The standard unit of measure of liquids in the petroleum industry; it contains 42 U.S. standard gallons.
- Barrel of Oil Equivalent (BOE)
-
The amount of energy resource (in this document, natural gas) that is equal to one barrel
of oil on an energy basis. The conversion is based on the assumption
that one barrel of oil produces the same amount of energy when burned as
5,620 cubic feet of natural gas.
- Basin
-
A depression of the earth's surface into which sediments are
deposited, usually characterized by sediment accumulation over a long
interval; a broad area of the earth beneath which layers of rock are
inclined, usually from the sides toward the center.
- Bed
-
A layer of rock, usually sediments, which is homogeneous (the same) in composition. One bed is separated from another by a bedding plane.
- Bid
-
An offer for an OCS lease submitted by a potential lessee in the form of a cash bonus dollar amount or other commitments as specified in the final notice of sale.
- Block
-
A numbered area on an OCS leasing map or official
protraction diagram (OPD). Blocks are portions of OCS leasing maps and
OPD's that are themselves portions of planning areas. Blocks vary in
size, but typical ones are 5,000 to 5,760 acres (about 9 square miles or
2,304 hectares). Each block has a specific identifying number, area, and latitude and longitude coordinates that can be pinpointed on a leasing map of OPD.
- Blowout
-
An uncontrolled flow of gas, oil, or other fluids from a well to the atmosphere. A well may blow out when formation pressure exceeds the pressure overburden of a column of drilling fluid.
- Blowout preventer
-
A special assembly of heavy-duty valves, commonly called the BOP stack, installed on top of a well which can be closed to prevent high-pressure oil or gas from escaping (a blowout) from the well hole during drilling operations.
- Bonus
-
The cash consideration paid to the United States by the successful bidder for a mineral lease. The payment is made in addition to the rent and royalty obligations specified in the lease.
- Borehole
-
The hole in the earth made by the drill; the uncased drill hole from the surface to the bottom of the well.
C
- Casing
-
Steel pipe used in oil wells to seal off fluids in the rocks
from the bore hole and to prevent the walls of the hole from caving.
- Casinghead
-
The top of the casing set in a well; the part of the casing that protrudes above the surface and to which the control valves and flow pipes are attached.
- Casinghead gas
-
Gas produced from an oil well as distinguished from gas from a gas well. The casinghead gas is taken off at the top of the well or at the separator.
- Choke
-
A type of orifice installed at the surface on the tubing string to adjust and control the amount of oil or gas flowing from a well. It is customary to refer to the production of a well as so many barrels or thousands of cubic feet through a 1/4-inch or 1/2-inch choke,
or whatever the size of the opening. The flowing pressure exerted by
the well's production give an indication of the strength of the well,
and is helpful in determining whether a well is commercial.
- Commercial well
-
A well of sufficient net production that it could be expected to pay out in a reasonable time and yield a profit from the operation. A shallow 50-barrel-a-day well in a readily accessible location onshore could be a commercial well.
Such a well in virtually any offshore area where enormously expensive
producing facilities and pipe lines would have to be constructed would
not be considered commercial.
- Completed well
-
A well that has been mechanically completed for production or service use. There may be more than one completed zone in the well. (See Active well.)
- Concession
-
Usually used in foreign operations and refers to a large block of acreage granted to the operator
by the host government for a certain time and under certain government
conditions which allows the operator to conduct exploratory and/or development operations. The Concession Agreement assures the holder of certain rights under the law.
- Condensate
-
#1. A natural gas liquid with a low vapor pressure, compared
with natural gasoline and liquified petroleum gas. It is produced from a
deep well where the temperature and pressure are high. Gas condenses as it rises up the wellbore and reaches the surface as condensate. Similarly, condensate separates out naturally in pipelines or in a separation plant by the normal process of condensation.
#2. Liquid hydrocarbons produced with natural gas which are separated from it by cooling, expansion, and various other means (also called 'distillate').
- Continental margin
-
A zone separating the emergent continents from the deep sea bottoms.
- Continental shelf
-
A broad, gently sloping, shallow feature extending from the shore to the continental slope.
- Continental slope
-
A relatively steep, narrow feature paralleling the continental shelf; the region in which the steepest descent of the ocean bottom occurs.
- COST
-
Continental Offshore Stratigraphic Test. These tests under
the direction of the Minerals Management Service are wells deliberately
drilled to provide geological information pertinent to competitive
bidding for offshore tracts.
D
- Demonstrated reserves (American Petroleum Institute)
-
A collective term for the sum of proved and indicated
reserves. Proved reserves are estimated with reasonable certainty to be
recovered under current economic conditions. Indicated reserves are
economic reserves in known productive reservoirs in existing fields
expected to respond to improved recovery techniques where (1) an
improved technique has been installed but its effect cannot yet be fully
evaluated, or (2) an improved technique has not been installed but
knowledge of reservoir characteristics and the results of a known
technique installed in a similar situation are available for use in the
estimating procedure.
- Development
-
Activities following exploration including the installation of facilities and the drilling and completion of wells for production purposes.
- Diapir
-
A mass of rock, usually salt, which has come from a slightly
deeper part of the earth's surface by piercing through overlying layers
of sediment through a zone of weakness.
- Directional drilling
-
The technique of drilling at an angle from the vertical by
deflecting the drill bit. Directional wells are drilled to develop an
offshore lease from one drilling platform; to reach a pay zone where drilling cannot be done, such as beneath a shipping lane.
- Discovery
-
A find of significant quantities of gas or oil.
- Dispersants
-
Those chemical agents that emulsify, disperse, or solubilize
oil into the water column or promote the surface spreading of oil
slicks to facilitate dispersal of the oil into the water column.
- Dome
-
A roughly symmetrical upfold of the layers of rock in which
the beds dip in all directions more or less equally from a common point;
any deformation characterized by local uplift and approximately
circular in outline; e.g. the salt domes of Louisiana and Texas.
- Drill cuttings
-
Chips and small fragments of drilled rock that are brought to the surface by the flow of the drilling mud as it is circulated.
- Drill pipe
-
Heavy, thich walled, hollow steel pipe used in rotary drilling to turn the drill bit and to provide a conduit for the drilling mud.
- Drilling contractor
-
A person or company whose business is drilling wells. Wells
are drilled on several contract specifications: per foot, day rate, or
turnkey (that is, upon completion). Most major oil companies do not own
drilling rigs. Exploration and development drilling is contracted. Personnel manning the rigs work for the contractor.
- Drilling mud
-
A special mixture of clay, water, or refined oil, and chemical additives pumped downhole through the drill pipe and drill bit. The mud cools the rapidly rotating bit; lubricates the drill pipe as it turns in the well bore; carries rock cuttings to the surface; serves as a plaster to prevent the wall of the borehole
from crumbling or collapsing; and provides the weight or hydrostatic
head to prevent extraneous fluids from entering the well bore and to
control downhole pressures that may be encountered.
- Dry gas
-
Natural gas from the well that is free of liquid hydrocarbons; gas that has been treated to remove all liquids; pipeline gas.
- Dry hole
-
A well drilled to a certain depth without finding commercially exploitable hydrocarbons.
E
- Economically Recoverable Resource Estimate
-
An assessment of hydrocarbon potential that takes into account (1) physical and technological constraints on production and (2) the influence of exploration and development costs and market price on industry investment in OCS exploration and production.
- Electric logging tool
-
A tool attached to a cable which is lowered into a well to survey the borehole
before it is cased. An electrical impulse is emitted which is reflected
from the rock strata. The degree of resistance to the current allows
geologists to determine the nature of the rock penetrated by the drill
and some indication of its permeability, porosity, and content (gas,
oil, or water).
- Environmental impact statement
-
A statement required by the National Environmental Policy
Act of 1969 (NEPA) or similar state law in relation to any action
significantly affecting the environment, including certain exploration and drilling activities.
- Erosion/scour
-
The removal or dissolution of parts of the seabed by bottom
currents, particularly those by storms. Transportation by currents of
the removed material can result in significant movement of masses of
sand, silt , and mud on the sea floor. This migration of sediment can
'strand' drilling platform supports or wellhead plumbing by erosion of
the surrounding support sediments.
- Exclusive Economic Zone (EEZ)
-
An area contiguous to the territorial sea of the United
States, the Commonwealth of Puerto Rico, the Commonwealth of Northern
Mariana Islands, and the U.S. overseas territories and possessions and
extending 200 nautical miles from the coastline.
- Exploration
-
The process of searching for minerals preliminary to development. Exploration
activities include (1) geophysical surveys, (2) drilling to locate an
oil or gas reservoir, and (3) the drilling of additional wells after a discovery to delineate a reservoir. It enables the lessee to determine whether to proceed with development and production.
F
- Federal Jurisdiction
-
Defined under accepted principles of international law. The
seaward limit is defined as the farthest of 200 nautical miles seaward
of the baseline from which the breadth of the territorial sea is
measured or, if the continental shelf
can be shown to exceed 200 nautical miles, a distance not greater than a
line 100 nautical miles from the 2,500-meter isobath or a line 350
nautical miles from the baseline.
Outer Continental Shelf limits greater than 200 nautical miles but less than either the 2,500 meter isobath plus 100 nautical miles or 350 nautical miles are defined by a line 60 nautical miles seaward of the foot of the continental slope or by a line seaward of the foot of the continental slope connecting points where the sediment thickness divided by the distance to the foot of the slope equals 0.01, whichever is farthest.
- Field
-
A geographical area in which one or more oil or gas wells produce. A field
may refer to surface area only or to underground productive formation. A
single field may include several reservoirs separated either
horizontally or vertically.
G
- Gas lost
-
Avoidably lost natural gas which is flared or vented (i.e., natural gas not retained in the production system for sale or use).
I
- In-Situ Burning
-
In-Situ (Latin for In Place) Burning is one method of
responding to an oil spill. It refers to a controlled burn of oil on
the water surface where it spilled from a vessel or a facility such as a
platform or pipeline. Authorities evaluate the impact on the
environment and the safety of people and vessels before authorizing In-Situ burning.
- Incident of Noncompliance (INC)
-
If an inspector finds a violation of BSEE regulations as
they are outlined in the PINC checklists,, the Bureau Inspector issues
an Incident of Noncompliance (INC) citation to the operator. Depending on the severity of the violation, the inspector can declare either a Warning or Shut-In INC.
- If the violation is not severe or threatening, a warning INC is issued. The warning INC must be corrected within a reasonable amount of time specified on the INC.
- The shut-in INC may be for a single component (a portion of the facility) or the entire facility. The violation must be corrected before the operator is allowed to continue the activity in question.
L
- Lease
-
A legal document executed between a landowner, as lessor,
and a company or individual (as lessee) that conveys the right to
exploit the premises for minerals or other products for a specified
period of time over a given area.
- Lease Sale (also called lease offering)
-
An BOEM proceeding by which leases of certain OCS tracts are offered for lease by competitive sealed bidding and during which bids are received, announced, and recorded.
M
- Marginal probability of hydrocarbons (MPHC)
-
The probability that oil and gas occur in commercial
quantities, using existing recovery technology under current economic
conditions
- Minimum royalty
-
The lowest payment a lessee can pay on an OCS lease after production
begins. It is equivalent to the yearly rental, typically $3 per acre or
$8 per hectare (2.47 acres). Rentals are paid annually before a discovery; royalties are paid on production after a discovery. If the total royalty payments amount to less than the yearly rental, the minimum royalty payments make up the difference. (See Rent and Royalty.)
N
- Net Profit Share lease
-
An OCS lease that provides for payment to the U.S. of a percentage share of the net profits for production of oil and gas from the tract. The percentage share may be fixed in the notice of the lease sale or may be a variable of the bid, depending on the bidding system used for the lease sale.
- Nonassociated gas
-
Dry gas that is not associated with oil in a productive reservoir, as opposed to associated gas or solution gas.
- NRC Reports
-
The primary function of the National Response Center is
to serve as the sole national point of contact for reporting all oil,
chemical, radiological, biological, and etiological discharges into the
environment anywhere in the United States and its territories. NRC Reports
are generally available online for spills which have occurred since
1990. NRC reports contain information available at the time of
notification and do not reflect corrections in spill volume or other
information collected after the time NRC was notified.
O
- OCS Reports
-
The Bureau forms an Accident Investigation Panel for
incidents that are major in nature and normally involve fatalities,
serious injuries, substantial property, or a particularly large
pollution event. The investigative report contains information damaged
on the circumstances surrounding the accident, the root cause or causes
of the accident, and recommendations to prevent a recurrence of such an
incident. When complete, the report is assigned an OCS Report number.
GOM OCS Investigation Reports prepared since 1992 are available online, and GOM reports prepared between 1984-1991 are available through the Gulf of Mexico OCS Region Public Information Unit (Call 1-800-200-GULF).
- Oil lost
-
Oil that is spilled or burned (i.e., oil not retained in the production system for sale).
- Operator
-
The individual, partnership, firm, or corporation having
control or management of operations on a leased area or a portion
thereof. The operator
may be a lessee, designated agent of the lessee, holder of rights under
an approved operation agreement, or an agent of an operating rights
holder.
- Outer Continental Shelf (OCS)
-
All submerged lands seaward and outside the area of lands
beneath navigable waters. Lands beneath navigable waters are interpreted
as extending from the coastline 3 nautical miles into the Atlantic
Ocean, the Pacific Ocean, the Arctic Ocean, and the Gulf of Mexico
excluding the coastal waters off Texas and western Florida. Lands
beneath navigable waters are interpreted as extending from the coastline
3 marine leagues into the Gulf of Mexico off Texas and western Florida.
P
- Panel Investigation
-
BSEE typically convenes a 'panel' to investigate incidents
that result in death, serious injury, or a significant pollution event.
At the conclusion of all panel investigations, BSEE will publish a
report that seeks to explain why and how an incident occurred, detail
the causes of the incident, address possible regulatory violations and
offer recommendations to prevent a recurrence.
- Planning area
-
A subdivision of an offshore area used as the initial basis for considering blocks to be offered for lease.
- Plugged and abandoned
-
Wells in which casings have been removed, and the well bore sealed with mechanical or cement plugs.
- Potential Incident of Noncompliance (PINC)
-
Checklist items which BSEE inspects to pursue safe operations on the Outer Continental Shelf. This list of inspection items is derived from all regulations for safety and environmental standards. Categorized lists may be viewed here.
- Producible lease
-
A lease where one well or several wells have discovered hydrocarbons in paying quantities, but for which there is no production during the reporting period.
- Producible zone completion
-
The interval in a wellbore that has been mechanically prepared to produce oil, gas, or sulphur. There can be more than one zone completed for production in a wellbore.
- Producing lease
-
A lease that is producing oil, gas, or sulphur in quantities sufficient to generate royalties.
- Production
-
The phase of oil and gas operations involved with well fluids extraction, separation, treatment, measurement, etc.
- Proven reserves (Society of Petroleum Engineers)
-
Reserves that can be estimated with reasonable certainty to
be recovered under current economic conditions. Current economic
conditions include processing costs prevailing at the time of the
estimate. Proved reserves must either have facilities that are
operational at the time of the estimate to process and transport those
reserves to market, or a commitment of reasonable expectation to install
such facilities in the future. Proved reserves can be subdivided into
undeveloped and developed.
R
- Rent
-
Periodic payments made by the holder of a lease, during the primary lease term for the right to use the land or resources for purposes established in the lease.
- Risk Management
-
Operating on the American Outer Continental Shelf (OCS)
is inherently risky. Both BSEE and industry face operational,
financial, geologic and technical risks on a daily basis. BSEE's mission
is to mitigate these risks while at the same time taking account of
America's energy and environmental needs. The goal of risk management is to efficiently reduce these risks by understanding them from a holistic perspective.
Risk management involves identification, assessment and prioritization of risks inherent in offshore energy activities. The risk management process analyzes aspects of risk in four main areas:
- Strategic ability to support BSEE's mission
- Operational effectiveness and efficiency
- Reporting reliability
- Compliance with applicable laws and regulations
BSEE works with industry, scholars, scientists, lawmakers, other government agencies and partner nations to develop comprehensive plans and laws to minimize risk on the OCS.
- Royalty
-
Payment, in value (money) or in kind, of a stated proportionate interest in production from mineral deposits by the lessees to the lessor. The royalty
rate may be an established minimum, a sliding-scale, or a step-scale. A
step-scale royalty rate increases by steps as the average production on
the lease increases. A sliding-scale royalty rate is based on average production and applies to all production from the lease.
S
- Sales value
-
The proceeds received for the sale of the mineral.
- Service zone completion
-
The interval in a well bore that has been mechanically prepared for service use, usually water or gas injection to stimulate production from other wells or for water or other waste disposal.
- Shut-in payments
-
Payments made for any producible well on the Federal OCS that is temporarily closed down. (See Shut-in zone completion.)
- State Jurisdiction
-
- Texas and the Gulf coast of Florida are extended 3 marine leagues (9 nautical miles) seaward from the baseline from which the breadth of the territorial sea is measured.
- Louisiana is extended 3 imperial nautical miles (imperial nautical mile = 6080.2 feet) seaward of the baseline from which the breadth of the territorial sea is measured.
- All other States' seaward limits are extended 3 nautical miles (approximately 3.3 statute miles) seaward of the baseline from which the breadth of the territorial sea is measured.
- Sulphur
-
A nonmetallic element that occurs in association with salt
diapirs throughout much of the onshore and offshore Gulf of Mexico
region. All offshore sulphur
is mined by the Frasch process, which uses hot brine to melt sulphur
out of the enclosing rock so the molten sulphur can be recovered.
- Suspended well
-
A well
on which operations have been discontinued. The usual context is an
uncompleted well in which operations ceased during drilling but which
has not been plugged and abandoned permanently.
U
- Unified Command
-
An emergency response command structure the United States government forms to respond to incidents.
- Unitization
-
The combining or consolidation of separately owned lease interests for joint exploration or development of a reservoir or potential hydrocarbon accumulation under the terms of a Unit Agreement. See more here.
W
- Well
-
A hole drilled or bored into the earth, usually cased with metal pipe, for the production of gas or oil. A hole for the injection under pressure of water or gas into a subsurface rock formation.
- Workover
-
Operation on a shut-in or producing well to restore or increase its production.
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