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Search Bar: Glossary of Key Oil and Gas Terms and Concepts:
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A
Abt –
Acreage
Land leased for oil and gas exploration and/or land for which ConocoPhillips owns the mineral rights. American Petroleum Institute (API). The American Petroleum Institute is the oil and gas industry’s trade organization. API’s research and engineering work provides a basis for establishing operating and safety standard issues and specifications for the manufacturing of oil field equipment and furnishes statistical and other information to related agencies. Visit API at www.api.org.
Anticline
A convex-upward formation of rock layers, which may form a trap for hydrocarbons.
Aquifer
An underground layer of water-bearing permeable rock or unconsolidated materials (gravel, sand, silt or clay) from which groundwater can be extracted using a water well.
Agreement
The Crude Oil Sales / Purchase Contract of which these specific provisions agreed between Buyer and Seller form the conditions of Sales and Purchase.
Allocations
Production Refinery Contracts
Affiliate
Shall mean any company or corporation of seller or buyer which owns directly or indirectly fifty (50) present or more of the shares carrying voting rights of such party (party company) and any company or corporation other than such party of which such parent company or such party owns directly or indirectly fifty (50) percent or more of the shares carrying voting rights.
API
American Petroleum Institute – creates Petroleum Measurement Tables
API/ASTM
Standards referenced to this Agreement are those in effect as of July 1st, 1993. In the event that such Standards are subsequently revised or modified or new standards are issued, the new revised or modified standards will apply. Each party must advise the other party to this Agreement, within three (3) months after such revisions, new or modified standards are introduced, and until such these standards shall be used.
API Gravity
Is a measure of how heavy or light a petroleum liquid is compared to water.
Light Crude Oil – has an API Gravity of more than 31.1°
Medium Crude Oil – has an API Gravity between 22.3° and 31.1°
Heavy Crude Oil – has an API Gravity of less than 22.3°
ASTM
American Society of Testing and Materials
ASWP
Any Safe World Port
ATI
Tank Farm Storage Authorization (Letter to Inject)
ATS
Authority to Sell Letter (Refinery)
ATV
Authority to Verify
B
Barrels (Bbls)
Used for International trades – a volume of forty – two (42) US gallons corrected for temperature to (60) degrees Fahrenheit.
Basin
A large, natural depression on the Earth’s surface in which sediments, generally brought by water, accumulate.
BBL
One stock tank barrel, of 42 U.S. gallons liquid volume, used in reference to crude oil, bitumen, condensate or natural gas liquids.
BCF
One Billion Cubic Feet of natural gas
BCFE
One Billion Cubic Feet of natural gas Equivalent
BCL
Bank Comfort Letter
Bill of Lading
The official document, issued at the load port after completion of the loading operations, stating, among other things, the ship’s loaded quality, expressed in Cubic Meters (M3) and in Metric Tons (MT) or barrels per the definitions herein. this document has to be signed in original by the ship’s Master and made out in accordance with the instruction hereinafter specified in the agreement.
Bitumen
A highly viscous form of crude oil (greater than 10,000 centipoise) resembling cold molasses (at room temperature). Bitumen must be heated or combined with lighter hydrocarbons for it to be produced. Contains sulfur, metals and other nonhydrocarbons in its natural form.
BLC
Bank Letter of Credit
BLCO
Bonny Light Crude Oil (Nigeria)
BOE
Barrel of Oil (one barrel of oil equals 6,000 cubic feet of natural gas)
BOED
Barrels of oil equivalent per day.
Borehole
A hole in the earth made by a drilling rig
BP
Benchmark Price – the price per unit of quality of a commodity traded in the International Marketplace.
BPG
Bank Performance Guarantee
BR
Bank Reference
BTU
British Thermal Unit – The amount of energy required to raise the temperature of one pound of water by one Fahrenheit degree. One BTU is equivalent to 252 calories, 0.293 watt-hours, or 1,055 joules.
C
Cargo
Any particular quantity of the oil loaded into the vessel as set out in this agreement includes Part Cargo.
CAPEX
Capital expenditures.
Carbon capture and storage (CCS)
Process by which carbon dioxide emissions are captured and removed from the atmosphere and then stored, normally via injection into a secure underground geological formation.
Carbon dioxide equivalents (CO2e)
The quantity that describes, for a given mixture and amount of greenhouse gas, the amount of CO2 that would have the same global warming potential (GWP) when measured over a specified timescale (generally 100 years).
Carbon intensity
The quantity of greenhouse gas emissions associated with producing an intermediate or final product. For the oil and gas industry, carbon intensity is commonly expressed in units of Tonnes CO2e per product volume (e.g.Tonnes CO2e/bbl or Tonnes CO2e/MCF).
Carbon sequestration
The fixation of atmospheric carbon dioxide in a carbon sink through biological or physical processes.
Carbon sink
A reservoir that absorbs or takes up released carbon from another part of the carbon cycle. The four sinks, which are regions of the Earth within which carbon behaves in a systematic manner, are the atmosphere, terrestrial biosphere (usually including freshwater systems), oceans and sediments (including fossil fuels).
Casing
Thick walled steel pipe placed in wells to isolate formation fluids (such as fresh water) and to prevent borehole collapse.
CBM
Coal bed methane – natural gas generated and trapped in coal seams.
CCI
Conditional Commercial Invoice
CCF
One Hundred Cubic Feet – One CCF is one hundred cubic feet of natural gas at standard distribution pressure of 14.73 pounds per square inch and 60° Fahrenheit.
CI
Commercial invoice / Dip Test (Storage Tank)/ Pay (Pay Invoice)
CIF
Cost, Interest, Freight – strictly as referred to in the interpretations defined by INCOTERMS, Edition 2010 with latest amendments.
CIQ
Certificate of Quality (Inspection)
Commodity
Referred to as being Nigerian Bonny Light Crude Oil, elsewhere in the agreement also referred to as Nigerian Light, which specifications, as specified by NNPC will be furnished by the Seller and added as Appendix “A” to this contract agreement.
Completion of Discharge
In respect of cargo, means the final disconnection of vessel’s discharge hose(s) following the discharge thereof.
CNG
Compressed Natural Gas
Corporate Indemnity
Ordinarily stem from a contractual agreement, which generally protects against liability, loss, or damage.
Crude Oil
There are 4 types of Crude Oil, liquid petroleum that is found accumulated in various porous rock formations in Earth’s crust and is extracted for burning as fuel or for processing into chemical products. A summary treatment of crude oil follows. For full treatment, see petroleum, petroleum production, and petroleum refining. The petrochemical industry received its chief impetus in 1913 from the development of the thermal-cracking process by which crude petroleum was refined.
- Class A: Light, Volatile Oils. These oils are:
- Class B: Non-Sticky Oils. These oils have a waxy or oily feel.
- Class C: Heavy, Sticky Oils. Class C oils are characteristically:
- Class D: Nonfluid Oils. Class D oils are:
CP
Company (Customer) Profile
D
D6
See wording under LPFO
Day
Calendar day
D/D
Due Diligence
Discharge Port (s)
The port(s) nominated by buyer and accepted by seller for discharge of such cargo in accordance with the agreement.
DLC
Documentary Letter of Credit
DOE
Department of Energy. A cabinet-level federal agency was created in 1977 to replace the Federal Energy Administration. The DOE manages national energy policy, nuclear power and nuclear weapons programs, and the national energy research labs.
Dollars
USD – dollars of the United States of America
DTA
Dip Test Authorization
DTAR
Dip Test Analysis Report
E
EIA
Energy Information Administration. An agency within the U.S. Department of Energy. EIA provides energy data, forecasts, and analyses.
ETA
Estimated Time of Arrival
EU
Europe or European
Execution Date
The date on which the seller and the buyer receive their respective faxed copies of this agreement, or as may be indicated otherwise in The Agreement.
EXW
Ex-Work’s – Buyer pays for all costs of transport from pick up at Supplier’s premises.
F
FAS
Free Alongside Ship Supplier pays the cost to the Port and Buyer pays loading and shipment.
FCO
Full Corporate Offer (Contract)
FOB
Freight on Board
Fiduciary Account
Fiduciary accounts are deposit accounts established by a person or entity for the benefit of one or more other parties, also known as principals. The deposit account can be established for the benefit of a single owner or a commingled account may be established for the benefit of multiple owners. The individual or entity opening the account does not have an ownership interest in the deposit. Fiduciary relationships include, but are not limited to, arrangements involving: • a trustee • an agent • a nominee • a custodian • a guardian
G
Gallons
used for Domestic trades (not Metric Tons) – a unit of volume equivalent to 231 cubic inches or 0.3785 cubic meters, all measured at 60 degrees F.
GGE
Gasoline Gallon Equivalent
Grade
Any grade of the oil specified in the agreement.
H
I
ICPO
Irrevocable Corporate Purchase Offer
IDLC or IRDLC
Irrevocable Documentary Letter of Credit
IMFPA
Irrevocable Master Fee Payment Agreement
IPOP
Initial Proof of Product
IR
Initial Readiness
ISP
International Standby Practice
J
J.A 21
Terms for Jet Aviation Fuel (Commercial Aviation Fuel)
J.A – 2
Terms for Jet Aviation Fuel (International Commercial Aviation Fuel)
J.P 54
Aviation Kerosene Colonial Grade Jet Fuel (International)
JFT
Jurassic Fuel Trading, LLC
K
Kerosene
A mixture of hydrocarbons produced by distilling petroleum, that is used as lamp oil or jet fuel.
KYC
Know Your Customer
L
LDC
Local Distribution Company
LDD
Late Delivery Discount
LDS
Low Sulphur Diesel (D2)
LGN
Liquefied Natural Gas (Methane & CH4)
LNG
liquefied natural gas- super-cooled natural gas that is maintained as a liquid at – 160′ Celsius; LNG occupies 1/640th of its original volume and is, therefore, easier to transport if pipelines cannot be used.
Loading Date – the date mutually accepted by both the Seller and the Buyer as the date on which the nominated international Surveyor Company has ascertained the quantity and the quality of the product pumped into the Buyer’s designated vessel.
LOI
Letter of Indemnity
LPFO/D6 Virgin
Light Petroleum Fuel Oil (untouched) / Diesel Fuel Oil Used (used in the diesel engines in most freight trucks, trains, buses, boats, and farm and construction vehicles.
LPG
Liquefied Petroleum Gas – Propane, butane, or propane-butane mixtures derived from crude oil refining or natural gas fractionation. For the convenience of transportation, these gases are liquefied through pressurization.
M
MATB
Marine Authority to Board
Mandate
An agent acting on half of an undisclosed Principal. (Buyer or Seller)
MCF
One thousand cubic feet of natural gas
Metric Ton
A unit of weight equal to one thousand (1000) kilograms and 7.57 Barrels shall be equal to one (1) metric Ton, measured at 60 degrees Fahrenheit.
MMCF
One million cubic feet of natural gas
MMCF/D
Millions of cubic feet of gas per day
MBOE
One thousand barrels of oil equivalent
MMBOE
One million barrels of oil equivalent
MMCFE
One million cubic feet of natural gas equivalent
Methane (CH4)
The simplest hydrocarbon and the main component of natural gas; methane is also produced when organic matter decomposes.
MOU
Memorandum of Understanding, is a formal agreement between two or more parties. Companies and organizations can use MOUs to establish official partnerships.
Month
A calendar month
MT 103
Bank Wire Transfer Procedures
MT 760
Bank Wire Transfer Procedures
MWD
Measurement-while-drilling tool – technology that transmits information from downhole measuring devices to the surface while drilling is ongoing.
N
NCNDA
Non-Circumvention Non-Disclosure Agreement
NGLs
Natural Gas Liquids – liquids obtained during natural gas production and processing; they include ethane, propane, butane, and condensate.
NGV
Natural Gas Vehicle
Nitrous Oxide (N20)
A very potent greenhouse gas that has a large number of natural sources and is a secondary product of the burning of organic material and fossil fuels.
NNPC/JVC
Nigeria National Petroleum Company/ Joint Venture Company – Used by companies like Mobil, Royal Dutch Shell, Elf, Chevron, Texaco, and Jurassic Fuel Trading, LLC, etc.
NOR
Notice of Readiness – to commence injection into Buyer’s tanks
O
Octane
A performance rating of gasoline; the higher the octane number, the greater the anti-knock quality of the gasoline.
Oil
Crude oil specified in this agreement
P
Party
Seller or Buyer
PB
Performance Bond
Petroleum
A naturally occurring mixture composed predominantly of hydrocarbons in the gaseous, liquid, or solid phase.
PEMEX
Petroleos Mexicanos S.A. de C.V. – Mexico’s state oil company engaged in the exploration, production, transportation, refining, storage, and sale of crude oil and derivatives.
PG
Performance Guarantee
Platt’s
Platt’s McGraw Hill – London is the organization internationally recognized and accepted who publishes official market prices of petroleum products on a daily basis.
POA
Pump out Authority
POD
Proof of Documents
POF
Proof of Funds
POP
Proof of Product
Port Cargo
When cargo is discharged in more than one Discharge Port or received by more than one receiver at the Discharge Port
PPOP
Partial Proof of Product
PVT
Pit Volume Totalizer – equipment used to measure the volume of drilling mud in the mud tanks/pits.
Q
Q & Q
Quantity and Quality
Qatar
Sovereign Country along Persians Gulf- Leader in Petroleum / Natural Gas Production.
Quarter
Period of the three (3) consecutive months commencing on twelve (1st) April, or First (1st) May, or First (1st) June.
R
RFQ
Request for Quote
R & E
Contract Rollover and Extensions
Rotterdam
Rotterdam, Netherlands
RWA
Ready, Willing, and Financially able to Pay
S
SBLC
Standby Bank Letter of Credit
SCF
Standard Cubic Feet
SCO
Soft Corporate Offer
SGS
Certificate of Inspection
SPA
Sales Purchase Agreement
SPOT Price
First Market Price
STA
Leased Tank Storage Agreement
STASCO
Shell Western Supply & Trading, Ltd. (Shell Trading Desk)
Sulfur
A yellow mineral extracted from petroleum for making fertilizers, pharmaceuticals, and other products.
Sulfur dioxide (S02)
A poisonous gas formed by burning hydrogen sulphide.
Sweeten
Remove hydrogen sulphide and carbon dioxide from sour gas to make it marketable
SWIFT – Society for Worldwide Interbank Financial Telecommunication – A worldwide messaging system (MT- Message Type) for internal bank applications for transferring money.
Synthetic crude oil – a mixture of hydrocarbons, similar to crude oil, derived by upgrading bitumen from oil sands
T
TCF
One trillion cubic feet of natural gas
TDLC
Transferable Documentary Letter of Credit
TRANSEFT
Russian government-owned pipeline company (monopoly)
Transshipment
The transfer of oil from a vessel into another vessel.
TSA
Tank Storage Lease Agreement or Tank Storage Farm
TSR
Tank Storage Receipt
TT
Wired Funds
TTO
Tank Take Over
U
UDTA
Unconditional Dip Test Authorization. UDTA is non-existent. Just because the procedures state UDTA, doesn’t mean that the Port Authority will let you enter to dip the product, without the Port Authorities “condition” that your TSA be endorsed. Why? Because if your Exit buyer fails to pay for the fuel in a timely manner or has a problem with their TSR, the fuel will be moved into your leased tank farm and you as a flipper need to have the money to pay for the tanks.
ULDS
Ultra-Low Sulphur Diesel
V
Virgin
Untouched
Vessel
The ship whether owned or chartered or otherwise obtained by seller and employed by the seller to ship the oil to the discharge port.
W
WTI
West Texas Intermediate (Oil Price Index)