OIL & GAS TERMINOLOGY

Barrel The basic unit for measuring oil. A barrel is equal to 42 U.S. gallons.
Bit A drilling tool that cuts the hole. Bits are designed on two basic and different principles. The
cable tool bit moves up and down to pulverize. The rotary bit revolves to grind.
Blow-Out Preventer A heavy casinghead control, filled with special gates or rams, which can
be closed around the drill pipe, or which completely closes the top of the casing.
Boyle's Law A law of physics stating that when gas is subject to compression and kept at a
constant temperature, the product of the pressure and volume is a constant quantity, i.e., the
volume is inversely proportional to the pressure.
BTU British Thermal Unit, a generalized measure of heating value, also used to compare
energy potential in different types of fuels.
Casing Heavy steel pipe used to seal off fluids from the hole or to keep the hole from caving in.
Casinghead Gas Gas produced with oil in oil wells. The gas is taken from the well through the
casinghead at the top of the well.
Catalytic Cracking A refining process for breaking down large, complex hydrocarbon
molecules into smaller ones. A catalyst is used to accelerate the chemical reactions in the cracking
process.
Christmas Tree The assembly of valves, pipes and fittings used to control the flow of oil and
gas from the casinghead.
Condensate Liquid hydrocarbons recovered by surface separators from natural gas. It is also
referred to as natural gasoline and distillate.
Correlative Rights Theory The theory adopted by the courts in several states that all
landowners whose tracts overlay a producing formation have correlative rights in the formation.
This theory is termed the "qualified ownership" theory.
Crude Oil Liquid petroleum as it comes out of the ground. Crude oil varies radically in its
properties, such as specific gravity and viscosity.
Derrick A tapering tower, usually of open steel framework, used in the drilling of oil and gas
wells as support for the equipment lowered into the well.
Distillate Fuel Oils Fuel oils which are products of distillation. They include fuels used for
diesel fuel and space heating.
Directional Drilling The drilling of a well that departs materially from the vertical direction.
Downstream Those activities in the oil and gas industry which take place away from the source
of the supply. Downstream operations commonly include refining and marketing endeavors.
Drilling Fluids Special chemical fluids, usually called mud, introduced into the hole to
lubricate the action of a rotary bit, to remove the cuttings and to prevent blowouts.
Dry Gas Natural gas which does not contain dissolved liquid hydrocarbons.
Dry Hole A completed well which is not productive of oil and/or gas or which is not productive
of oil or gas in paying quantities.
Enhanced Recovery The increased recovery from an oil pool achieved by artificial means or
by the application of outside energy sources to the pool.
Equivalent Barrels Quantities of natural gas and natural gas liquids translated into barrels of
oil based on equal energy content. The energy content of six thousand cubic feet of gas (6 MCF)
is the rough equivalent of one barrel of oil.
Exploration The search for oil and gas. Exploration operations include aerial surveys,
geophysical surveys, geological studies, core testing and the drilling of test (wildcat) wells.
Fault Trap A structural trap in the earth, favorable for the retention of petroleum, formed by
the cracking and breaking of a rock plane.

Gusher An oil well that comes in with such great pressure that oil flows out of the well head
into the air. Such wells used to be commonplace, but with improved drilling methods, notably the
use of drilling mud, gushers are a rarity today.
Horizontal Drilling A method of drilling where the drill bit is turned in a horizontal direction
in an effort to produce hydrocarbons from a number of areas located at the same approximate
depth.
Independent A company involved only in the exploration and production of oil and gas and
possibly in the transportation. An independent will not be involved in the refining of oil.
Injection well A well employed for the introduction into an underground stratum of water or
gas under pressure. Injection wells are employed for the disposal of produced water from oil and
gas wells.
Integrated Company A company involved in virtually all aspects of the oil and gas industry
including exploration, production, transportation, refining and marketing. These companies are
also referred to as major oil companies.
Lease The instrument by which a leaseholder or working interest is created in minerals.
LNG Liquefied natural gas. Natural gas becomes a liquid at a temperature of minus 258
degrees F and may be stored and transported in the liquid state.
MCF Thousand Cubic Feet. The standard unit for measuring the volume of natural gas.
Natural Gas Hydrocarbons, which at atmospheric conditions of temperatures and pressure, are
in a gaseous phase.
Natural Gas Liquids Hydrocarbons found in natural gas which may be extracted or isolated as
liquefied petroleum gas and natural gasoline.
OCS The Outer Continental Shelf. Generally the area outside the territorial boundaries of the
coastal state over which the federal government exercises control.
Oil Field An area which is underlain by one or more reservoirs containing oil.
Oil Pool An underground reservoir or trap containing oil.
Overboard Water Another name for produced water or brine produced from oil and gas wells.
Platform Structure used in offshore drilling on which the drilling rig, crew quarters and other
related items are located.
Plugging of Well The sealing off of the fluids in the stratum penetrated by a well so that the
fluid from one stratum will not escape into another or to the surface.
Probable Reserves An estimate of reserves taking into consideration known geology, previous
experience with similar types of reservoirs and seismic data, if available.
Processing Plant A plant to remove liquefiable hydrocarbons from wet gas or casinghead gas.
This process yields the propanes, butanes and other products taken from natural gas.
Produced Water Water that comes up a well with the oil and gas. Produced water is usually
high in salinity. It is often the force that drives the oil and gas to the surface. After leaving the
well, the produced water is separated from the oil and gas. Also referred to as overboard water,
formation water, saltwater and oilfield brine.
Proration The restriction of production by a state regulatory commission, usually on the basis
of market demand. In Louisiana the proration of natural gas is allowed to prevent physical and
economic waste and to protect correlative rights.
Proven Reserves Oil which is still in the ground, but which has been located and determined to
be recoverable.
Quad A quadrillion of BTU's. This unit of measurement is used in connection with energy
consumption. A barrel of crude oil contains 5.8 million BTU's. Natural gas contains about one
million BTU's per MCF.

Recomplete - To move the primary completion from one zone to another. May involve
reperforating, running other tubulars or setting a new packer.
Redrill footage - Occasionally, a hole is lost or junked and a second hole may be drilled from the
surface in close proximity to the first. Footage drilled for the second hole is defined as "redrill
footage." Under these circumstances, the first hole is reported as a dry hole (explanatory or
developmental) and the total footage is reported as dry hole footage. The second hole is reported
as an oil well, gas well, or dry hole according to the result. The redrill footage is included in the
appropriate classification of total footage, but is not reported as a separate classification.
Refinery The facility where the characteristics of petroleum or petroleum products are
changed.
Reservoir A porous and permeable sedimentary rock containing commercial quantities of oil
and gas. Three types of reservoirs are encountered including structural traps, stratigraphic traps
and combination traps.
Rig The structures and equipment used in drilling an oil and gas well including the derrick,
engine, engine house and other equipment.
Roughneck A driller's helper and general worker on a drilling rig.
Roustabout A common laborer around a drilling or a producing well.
Royalty The landowner's share of production, before the expenses of production.
Severance Tax A tax on the removal of minerals from the ground. The tax can be levied either
as a tax on volume or a tax on value. In Louisiana oil is taxed at 12.5 percent of value. Natural
gas is taxed at 7 cents per MCF with the rate adjusted annually to reflect the changes in the spot
market price of gas sold in Louisiana.
Shut In To close down a producing well temporarily for repairs, cleaning out, building up
reservoir pressure, lack of market, etc.
Sour Gas Natural gas contaminated with chemical impurities, notably hydrogen sulfide or
other sulfur compounds, which cause a foul odor.
Specific Gravity In the case of liquids, the ratio between the weight of equal volumes of water
and another substance, measured at standard temperature and where the weight of the water is
assigned a value of 1. However, the specific gravity of oil is normally expressed in the industry in
degrees of API gravity.
Spudding In The first boring of the hole in the drilling of an oil well.
Stripper Production The final stage of production in the life of an oil well or oil field. This
stage is characterized by low rates of production, sometimes no more than a barrel of oil per day.
Tension Leg Platform A type of platform generally used in deep waters. Instead of a stationary
platform attached to the ocean floor, the surface platform is tethered to a templet on the ocean
floor by flexible steel tendons.
Upstream Activities in the oil and gas industry which take place close to the supply. This
normally includes exploration and production activities.
Well A hole drilled in the earth for the purpose of finding or producing crude oil or natural gas
or providing services related to the production of crude oil or natural gas.
Wellhead A term usually defined as being at the Christmas Tree but, which under exceptional
circumstances, may be defined as located at some other place.
Wellhead Revenues The total dollar value of crude oil and natural gas at the wellhead.
Wellhead revenues are calculated, based on the production volumes of crude oil and natural gas,
multiplied by their respective average wellhead price.
Wet Gas Natural gas containing liquid hydrocarbons in solution, which may be removed by a
reduction of temperature and pressure or by a relatively simple extraction process.

Wildcat Well An exploratory well being drilled in unproven territory, that is, in a horizon from
which there is no production in the general area.
Work Overs Operations on a producing well to restore or increase production. A typical work
over is cleaning out a well that has sanded up.

GLOSSARY OF PETROLEUM INDUSTRY COMMON TERMS & SYMBOLS

Abel tester:
Absolute
pressure:
Acidity:

Air-Fuel Ratio:
Aliphatic:
Aniline Point:
API:
API Gravity:

A closed-cup flash tester for kerosene and other oils

Total pressure equal to gauge pressure plus 14.7 lbs./sq. in at sea level
The presence of acid-type constituents whose concentration is usually defined in terms
of neutralization number. The constituents vary in nature and may or may not
markedly influence the behavior of the oil. (see neutralization number)
The ratio of air weight to fuel wight consumed in an internal combustion engine or
furnace.
A class of saturated or unsaturated carbon compounds, in which the carbon atoms are
joined in open chains.
The aniline point of a petroleum product is the minimum equilibrium solution
temperature with an equal volume of freshly distilled aniline.
American Petroleum Institute.
Gravity (weight per unit volume) of oils as measured by the API scale.
This standard was adopted by the API 5/4/22 as the standard for the American
petroleum industries

Aromatics:
Ash:
Asphaltenes:

ASTM:
Atomization
characteristics:
Barrel:
Bbl:
Benzene:

BHP:
Blender:
Blending:
BS & W:
BS & W Monitor:

Group of hydrocarbons of which benzene is the parent. They are called "aromatics"
because many of their derivatives have sweet or aromatic odors.
Inorganic residue remaining after ignition of combustible substances determined by
definite prescribed methods.
Insoluble, semi-solid, or solid particles which are combustible and are highly aromatic.
Asphaltenes contain a high carbon to hydrogen ratio and entrap water, fuel ashes and
other impurities.
American Society for Testing Materials. Grade and quality specifications for
petroleum products are determined by ASTM test methods.
The ability of an oil to be broken up into a fine spray by some mechanical means.

A unit of volume measurement used for petroleum and its products. 1

barrel = 42 U.S. gallons or 35 British gallons
Abbreviation for barrel.
An aromatic hydrocarbon which is a colorless, volatile, flammable
liquid. Benzene is obtained chiefly from coal tar and is used as a
solvent for resins and fats in dye manufacture.
Brake horsepower
A device for mixing two fuel oils to achieve a less viscous and more
uniform fuel.
Mixing of two compatible fuels having different properties in order to
produce an intermediate fuel
Bottom sediment and water.
An instrument which detects entrained water content in petroleum

Calorie:
BTU:
Calorific
Value:
Bunker Fuel
Oil:
Catalyst:
Catalytic Fines

Cat Cracker:

Celsius
Centigrade:

Centipoise:
Centistoke:
Centrifuge:

Cetane Index:

CCR:
CFR Diesel fuel testing
unit:
C/H Ratio:
Clarifier:

Cloud Point:
Corrosion:

Cracked:

cSt:
Cutter stock:

products wherein the water changes the capacitive reactance as a

function of the dielectric constant.
TheBritish
amount
of heat Unit.
required
raise the
gramthe
of water
Thermal
Thetoamount
of temperature
heat requiredofto1raise
by 1temperature
degree centigrade,
at orofnear
maximum
density.
of 1 pound
water
by 1 degree
Fahrenheit.
Amount
of
heat
produced
by
the
complete
combustion
of a unit weight
Heavy, residual fuel oil used in ships.
of fuel. Usually expressed
in
calories
per
gram
or
BTU's
per pound, the
.
latter being numerically
1.8resistance
times theof
former.
The
an oil to emulsification, or the
A substance which promotes
a
chemical
but does
itself
ability of an oil to reaction,
separate from
any not
water
with
enter into the reaction.which it is mixed. The better the demulsibility
Hard, abrasive crystalline
particles
of alumina,
silica,
alumina
rating,
the more
quickly the
oil and/or
separates
from
silica that can be carried
over
from
the
fluidic
catalytic
cracking
process
water
of residual fuel stocks. Particle size can range from sub-micron to
greater than sixty (60) microns in size. These particles become more
common in the higher viscosity marine bunker fuels.
A large refinery vessel for processing reduced crudes or other feedstocks in the presence of a catalyst, as opposed to the older method of
thermal cracking, which employs heat and pressure only. Catalytic
cracking is generally preferred since it produces less gas and other
highly volatile byproducts. It produces a motor fuel of higher octane
than the thermal process.
Europeans use this term instead of centigrade (see below) to honor
Physicist Anders Celsius. who developed a temperature reference that
uses the freezing and boiling point of water as references.
Temperature based on 0 for the temperature at which water freezes and
100 for the temperature at which water boils. Europeans do not accept
this term for Celcius. See that term above. This term is accepted and
used in North American chemical texbrooks, so which term you use may
depend on your location, but both are abbreviated with a degree symbol
and capital C, so at least you now know what it means.
0.01 poise or centistokes times specific gravity at the test temperature.
0.01 stoke (see stoke)
A machine using centrifugal force produced by high-speed rotation for
separating materials of different densities. Applied to Diesel engine fuels
and lubricating oils to remove moisture and other extraneous materials.
An empirical measure of ignition quality. Defined as the percentage by
volume of cetane in a mixture of cetane and methyl naphthalene which
has the same ignition quality when used in an engine as a fuel under test.
Conradson carbon residue
A standard engine employed in making cetane number tests of Diesel
engine fuels.
Carbon/Hydrogen ratio
A machine used for a liquid-sludge separation in which the particles
with a higher specific gravity are separated form the lower specific
gravity of the liquid. A clarifier bowl has one outlet for the light phase
oil; the heavier phase particles are retained on the bowl wall.
Temperature at which wax begins to crystallize from a distillate fuel.
Detrimental change in the size or characteristics of material under
conditions of exposure or use. It usually results from chemical action
either regularly and slowly, as in rusting (oxidation), or rapidly, as in
metal pickling.
Refers to a petroleum product produced by a secondary refining process
such as thermal cracking or vis-breaking processes which yield very low
quality residue.
Centistokes @ 50 Centigrade
Flux Stock. A petroleum stock which is used to reduce the viscosity of a
heavier residual stock by dilution.

Demulsibility:

Density:

Desalter:

Detonation:

Diesel index:

Distillation:
Doctor test:

Electrolytic process:
Emulsion:

Engler viscosity:

Fahrenheit:

Final Boiling Point

FBP:
Fire Point:

Density is the term meaning the mass of a unit of volume. Its numerical
expression varies with the units selected.
The desalter mixes the hydrocarbon stream with a small amount of fresh
water (e.g. 10% by volume) forming a water-in-oil emulsion. The resulting
emulsion is subjected to an electric field wherein the water is coalesced as
an under flow from the upper flow of a relatively water-free, continuous
hydrocarbon phase. The desalted hydrocarbon stream is produced at
relatively low cost and has a very small residual salt content. The
performance of this unit can be improved with a demulsifier, such as Alken
860 Demulsifier.
A violent explosion involving high-velocity pressure waves; in a gasoline
engine, the spontaneous combustion of part of the compresses charge after
spark occurs. Detonation usually produces a characteristic metallic sound,
or knock.
Product of the API gravity and the aniline point (in degrees Fahrenheit) of a
Diesel fuel, divided by 100; an indication of the ignition quality of the fuel.
The process of heating a liquid to its boiling point and condensing and
collecting the vapors
A qualitative method of detecting undesirable sulfur compounds in
petroleum distillates, that is, of determining whether oil is "sour" or "sweet".
A process that causes the decomposition of a
chemical compound by the use of electricity.
A liquid mixture of two or more liquid substances not normally
dissolved in one another, one liquid held in suspension in the other.
Water-in-oil emulsions have water as the internal phase and oil as the
external, while oil-in-water have oil as the internal phase and water as
the external.
A viscosity obtained by dividing the out-flow time in seconds for 200
ml. of the material being tested, by the time in seconds for 200 ml. of
water at 68F (20C) to flow out of an Engler viscosimeter.
Temperature scale based on 32F for the temperature at which water
freezes and 212F for the temperature at which water boils (180
difference). Conversion to Farhenheit from Celsius (centigrade)
temperature scale is by the following formula: F = 9/5C + 32, where C
is the temperature in Celsius degrees.
The highest temperature indicated on the thermometer inserted in the
flask during a standard laboratory distillation. This is generally the
temperature at which no more vapor can be driven over into the
condensing apparatus.
The lowest temperature at which an oil vaporizes rapidly enough to
burn for at least 5 seconds after ignition, under standard conditions.

Flash point:
Force Majeure:

Fraction:
Fuel oil:
Fungible:

Gasoil:

The lowest temperature at which a liquid will generate sufficient vapor

to flash (ignite) when exposed to a source of ignition.
A standard clause which indemnifies either or both parties to a
transaction whenever events reasonably beyond the control of either or
both parties occur to prevent fulfillment of the terms of the contract.
A separate identifiable part of crude oil; the product of a refining or
The heavy distillates from the oil refining process; used as fuel for
power stations, marine boilers.
Interchangeable. Products which can be commingled for purposes of
pipeline shipment.
Designation for No.2 heating oils and diesel
fuels. Acomplete
clean distillate
fuel oil.
Total heat evolved during
combustion
of unit weight of a

Heat of Combustion
substance, usually expresses in BTU per pound.
Gross:
Heat of Combustion Net: Gross heat of combustion minus the latent heat of condensation of
any water produced.
Heavy crude:
Crude oil with a high specific gravity and a low API gravity due to
the presence of a high proportion of heavy hydrocarbon fractions and
metallic content.
Homogenizer:
A mechanical device which is used to create a stable, uniform
dispersion of an insoluble phase (asphaltenes) within a liquid phase
(fuel oil).
HP:
Horsepower
HHV:
Higher heating value
Hydrometer:
An instrument for determining the gravity of a liquid.
IBP:

Innage:
IP:
Ionization:

Initial Boiling Point. In a standard laboratory distillation, the

temperature on the distillation thermometer at the moment the first
drop of distillate falls from the condenser.
Space occupied in a product container.
British Institute of Petroleum.
The process of adding electrons to, or removing electrons from,
atoms or molecules, thereby creating ions. High temperatures,
electrical discharges, and nuclear radiation can cause ionization.

Kinematic Viscosity:
The ratio of the absolute viscosity of a liquid to its specific gravity at
the temperature at which the viscosity is measured. Expressed in
Stokes or Centistokes.
Latent heat:

Example: Viscosity, kinematic,

cS @to100F.....5.2
Heat required
change the state of a unit

weight of a substance from solid to liquid or

from liquid to vapor without change of
temperature.
Layering: This occurs in tanks when a high density fuel is mixed with a low density fuel.
LHV:
Lower Heating Value
Lifting:
Refers to tankers and barges taking on cargoes of oil or refined product at the
Marine Diesel
Oil Marine
Diesel oil point.
is a middle distillate fuel oil which can contain traces
terminal
or transshipment
Light
Crude oiloften
withpercent
a low specific
gravity
high fuel
API oil
gravity
to the presence of a
(MDO):
(10%) or
more and
residual
fromdue
transportation
Crude:
high proportion of light hydrocarbon fractions and low metallic compound.
Light
The more volatile products of petroleum refining; eg. butane, propane, gasoline.
Ends:
Liter:
A measure of capacity in the metric system equal to 61,022 cubic inches, 0.908 US
quarts dry and 1.0567 US quarts wet.
Long Ton: An avoirdupois weight measure equalling 2,240 pounds.

contamination and/or heavy fuel oil blending. The MDO does not require
heated storage.
MCR:
Maximum continuous rating
MDO:
Marine Diesel Oil
Metric Ton:
A weight measure equal to 1,000 kilograms, 2,204.62 pounds, and 0.9842
long tons.
Mg/L:
Milligrams per liter = ppm (parts per million) - expresses a measure of the
concentration by weight of a substance per unit volume.
Middle Distillate: Term applied to hydrocarbons in the so-called "middle range" of refinery
distillation. Examples: heating oil, diesel fuels, and kerosene.
Micron:
A unit of length. One millionth of a meter or one thousandth of a
millimeter. One micron equals 0.00004 of an inch.
Molecule:
The smallest division of a compound that still retains or exhibits all the
properties of the substance.
Motor Gasoline: A complex mixture of relatively volatile hydrocarbons with or without
small quantities of additives, that have been blended to form a fuel suitable
for use in spark-ignition engines.
mm:
Millimeter
MSDS:
Material safety data sheet - a document that provides pertinent information
and a profile of a particular hazardous substance or mixture. An MSDS is
normally developed by the manufacturer or formulator of the hazardous
substance or mixture. The MSDS is required to be made available to
employees and operators whenever there is the likelihood of the hazardous
substance or mixture being introduced into the workplace. Some
manufacturers prepare MSDS for products that are NOT considered to be
hazardous to show that the product or substance is NOT hazardous.
Naphtha:
A volatile, colorless product of petroleum distillation. Used primarily as
paint solvent, cleaning fluid, and blendstock in gasoline production, to
produce motor gasoline by blending with straight-run gasoline.
Naphthenes:
One of three basic hydrocarbon classifications found naturally in crude oil.
Naphthenes are widely used as petrochemical feedstock. Examples are:
cyclopentane; methyl-,ethyl, and propylcyclopentane.
Neutralization
The number that expresses the weight in milligrams of an alkali needed to
number:
neutralize the acidic material in one gram of oil. The neutralization number
of an oil is an indication of its acidity.
NH3N:
Ammonia nitrogen.
NPDES permit:
National Pollutant Discharge Elimination System permit is the regulatory
agency document issued by either a federal or state agency which is
designated to control all discharges of pollutants from point sources into
U.S. waterways. NPDES permits regulate discharges into navigable waters
from all point sources of pollution, including industries, municipal
wastewater treatment plants, sanitary landfills, large agricultural feed lots
and return irrigation flows.
Oil:
Olefins:
OSHA:

Crude petroleum and other hydrocarbons produced at the wellhead in

liquid form
Class of unsaturated paraffin hydrocarbons recovered from petroleum.
Typical examples include: butene, ethylene and propylene.
The Williams-Steiger Occupational Safety and Health Act of 1970
(OSHA) is a law designed to protect the health and safety of industrial

workers and treatment plant operators. It regulates the design,

construction, operation and maintenance of industrial plants and
wastewater treatment plants. The Act does not apply directly to
municipalities, EXCEPT in those states that have approved plans and have
asserted jurisdiction under Section 18 of the OSHA Act. Wastewater
treatment plants have come under stricter regulation in all phases of
activity as a result of OSHA standards. OSHA also refers to the federal
and state agencies which administer the OSHA regulations.
Oxidation: Combining elemental compounds with oxygen to form a new compound.
A part of the metabolic reaction.
Oxidizing
Any substance such as oxygen and chlorine , that can accept electrons.
agent:
When oxygen or chlorine is added to wastewater, organic substances are
oxidized. These oxidized organic substances are more stable and less
likely to give off odors or to contain disease bacteria.
Outage:
Space left in a product container to allow for expansion during the
temperature changes it may undergo during shipment and application.
Measurement of space that is NOT occupied in a drum.
Ozonation: The application of ozone to water, wastewater, or air, generally for the
purposes of disinfection or odor control.

Particulate:
PAH:
PCB:

Free suspended solids.

Polycyclic aromatic hydrocarbons. (occasionally polyaluminum hydroxide)
Polychlorinated biphenyls; polychloro-biphenyls. Difficult to remediate
chemical used in old-style transformers. Concentrated PCBs used to be
referred to as "1268".
A closed-cup test for flash points of oil.

PenskyMartens:
Peristaltic
A type of positive displacement pump.
pump:
Petrochemical: An intermediate chemical derived from petroleum, hydrocarbon liquids or
natural gas, such as: ethylene, propylene, benzene, toluene and xylene.
Petroleum:
A generic name for hydrocarbons, including crude oil, natural gas liquids,
natural gas and their products.
pH:
pH is an expression of the intensity of the basic or acidic condition of a
liquid. Mathematically, pH is the logarithm (base 10) of the reciprocal of the
hydrogen ion concentration. The pH may range from 0 to 14, where 0 is
most acidic, 14 most basic, and 7 is neutral. Natural waters usually have a
pH between 6.5 and 8.5.
Phenol:
An organic compound that is an alcohol derivative of benzene.
PIB:
Product Information Bulletin. General information on a product.
Pollution:
The impairment (reduction) of water quality by agriculture, domestic or
industrial wastes (including thermal and radioactive wastes) to such a
degree as to hinder any beneficial use of the water or render it offensive to
the senses of sight, taste, or smell or when sufficient amounts of waste
creates or poses a potential threat to human health or the environment.
Polymer:
A chemical formed by the union of many monomers (a molecule of low
molecular weight). Polymers are used with other chemical coagulants to aid
in binding small suspended particles to form larger chemical flocs for easier
removal from water. All polyelectrolytes are polymers, but not all polymers

are polyelectrolytes.
Polymerization: Process of combining two or more simple molecules of the same type,
called monomers, to form a single molecule having the same elements in the
same proportion as in the original molecules, but having increased
molecular weight. The product of the combination is a polymer.
Pour Point:
Lowest temperature at which an oil will pour or flow under certain
prescribed conditions.
ppm:
Parts per million - the unit commonly used to designate the concentration of
a substance in a wastewater in terms of weight ie. one pound per million
pounds, etc. PPM is synonymous with the more commonly used term mg/L
(milligrams per liter).
Purifier:
A machine used for a liquid-liquid separation in which the two intermixed
liquids which are insoluble in each other have different specific gravities.
Solids with specific gravities higher than those of the liquids can be
separated off at the same time. A purifier bowl has two outlets; one for the
light phase liquid and one for the heavy phase liquid.
Ramsbottom coke: A carbon residue test originated by Dr. J.R. Ramsbottom in England.
Reagent:
A pure chemical substance that is used to make new products or is
used in chemical tests to measure, detect, or examine other substances.
Recycle:
The use of water or wastewater within (internally) a facility before it is
discharged to a treatment system.
Reduced Crude Oil: Crude oil that has undergone at least one distillation process to
separate some of the lighter hydrocarbons. Reducing crude lowers its
API gravity, but increases the handling safety by raising the flash
point.
Reducing agent:
Any substance, such as the base metal (iron) or the sulfide ion that will
readily donate (give up) electrons. The opposite of an oxidizing agent.
Redwood viscosity: The number of seconds required for 50 ml. of an oil to flow out of a
standard Redwood viscosimeter at a definite temperature; British
viscosity standard.
Refinery:
A plan used to separate the various components present in crude oil
and convert them into usable products or feedstock for other processes.
Heavy fuel oils produced from the non-volatile residue from the
Residual
fractional distillation process. Heavy oils that are "leftovers" from
various refining processes. Heavy black oils used in marine boilers and
Fuel Oil:
in heating plants.
A viscosity test similar in nature to the Saybolt Universal viscosity
Saybolt Furol viscosity: test but one more appropriate for testing high=viscosity oils.
Certain transmission and gear oils, and heavy fuel oils are rated by
this method. The results obtained are approximately 1/10th the
viscosity which would be shown by the Saybolt Universal method.
SSF:
Seconds Saybolt Furol
SSU:
Seconds Saybolt Universal
Short ton:
An avoirdupois measure of weight equal to 2,000 lbs.
Slagging:
Formation of hard deposits on boiler tubes and/or piston crowns,
usually due to the presence of sodium, vanadium and sulfur.
Sludge:
Deposits in fuel tanks and caused by the presence of wax, sand,
scale, asphaltenes, tars, water, etc. The "sludge" formed in a #6
fuel oil storage tank is mostly composed of heavy

Soluble:
Solvent:

hydrocarbons. Alken Even-Flo 905eliminates this type of sludge

by breaking the sludge into small particles and re-suspending them
in the fuel for more efficient combustion. The "sludge" formed in
diesel storage tanks is a combination of water with fungus and
bacteria, which grow on the unevenly mixed water/fuel interface.
AddingAlken Even-Flo 910 and 910S to stored fuel promotes a
clean separation of water and fuel, reducing the substrate upon
which bacteria and fungus can grow. Since the bacteria and fungus
bind to the separated water, they can be removed by draining the
water from the storage tank. If draining the storage tank is
impossible, EF 905 and 910E will emulsify the water into tiny
droplets and break the sludge into such small particles that they
will no longer clog filters and will efficiently burn.
Matter or compounds capable of dissolving into a solution.
A substance, normally a liquid, which is capable of absorbing
another liquid, gas, or solid to form a homogeneous mixture.

Specifications:
Term referring to the properties of a given crude oil or petroleum
product, which are "specified" since they often vary widely even
within the same grade of product. In the normal process of
negotiation, seller will guarantee buyer that product or crude to be
sold will meet certain specified limits, and will agree to have such
limits certified in writing.

Generally the major qualities of oil for which a buyer would

demand a guarantee are: API gravity (or specific gravity, in some
cases), sulfur percentage measured by weight, pour point measured
by degrees C maximum, viscosity min./max., BS&W percentage
by weight, etc.
Specific gravity:
Specific heat:

Spec. Sheet:

SIT:

SR1:
Stabilize:

Static mixer:

Weight of a particle, substance or chemical solution in relation to

an equal volume of water at 15C. Abbreviated as Sp.Gr.
The quantity of heat required to raise the temperature of a unit
weight of a substance by 1 degree; usually expresses as
calories/gram/C or BTU/lb./F.
Specification Sheet. Detailed information of a product including,
tests, color, odor, specific gravity, bacterial strains, other major
ingredients, etc.
Spontaneous Ignition Temperature. The temperature at which an oil
ignites of its own accord in the presence of air or oxygen under
standard conditions.
Seconds Redwood # 1 @ 100 F
To convert to a form that resists change. Organic material is
stabilized by bacteria which convert the material to gases and other
relatively inert substances. Stabilized organic material generally
will not give off obnoxious odors.
A motionless mixer which has a series of fixed, geometric elements

Stoke:
Straight-Run:
Stratification:

STP:
Sulfur:
Surfactant:

enclosed within a tubular housing. The internal elements impart

flow division and radial mixing to the media flowing through the
housing to produce a uniform dilution of the production.
The unit of kinematic viscosity
Refers to a petroleum product produced by the primary distillation
of crude oil, free of cracked components.
Occurs in blended fuels that have a compatibility problem. It is
usually experienced when paraffinic based oils are mixed with
asphaltic based oils, causing asphaltenes to precipitate and settle to
the bottom of the tank.
Standard Temperature (25C) and Pressure (300 mm Mercury).
An element that is present in crude oil and natural gas as an
impurity in the form of its various compounds.
Surface-active agent. The active agent in detergents that possesses
a high cleaning ability. Used in a spray solution to improve its
sticking and wetting properties when applied to plants, algae, or
petroleum.

Tag-Robinson Colorimeter:

An instrument used to determine the color of

oils. Also a scale of color values.
Ubbehohde
A suspended level apparatus for accurately determining the viscosity of a
TBN:
Total Base Number. ASTM D2896. This is measured in mg. KOH
viscosimeter:
liquid.
needed to neutralize an acidic solution through a reverse titration.
Ullage:
which aand/or
tank orinorganic
vessel lacks
ofbearing
being full.
Vanadium
Inhibitor:The amount
An organic
metal
chemical intended to
TBN is the ability of the product to neutralize acid. In a motor oil,
chemically and/or physically combine with the compounds
this is a property which allows the oil to neutralize acids from
formed during combustion of heavy fuel oil to improve the
combustion that would otherwise degrade the oil.
surface
of the
treated
ash compounds.
Thermal Value:
Calories per
gramproperties
of BTU per
pound
produced
by burning fuels.
Viscosimeter:
A
device
for
determining
the
viscosity
of by
oil.a There
Topped Crude Oil:
Oil from which the light ends have been removed
simpleare several
methodsAlso
or devices
into
general
use. Basically,
a fixed quantity of
refining process.
referred
as "reduced
crude oil".
oil
is
allowed
to
pass
through
a
fixed
orifice
at
a specified
Combination of inorganic and hydrocarbon sediments existing
in a
temperature
over
a
measured
time
span
and
then
compared
to a
Total Existent
fuel as delivered.
standard liquid such as a calibration oil or water.
Viscosity:
Measure of the internal friction or resistance of an oil to flow. As
Sediment:
the temperature of an oil is increased, its viscosity decreases and
it iswhich
therefore
able to flow
Viscosity is measured on
Toxic:
A substance
is poisonous
to amore
livingreadily.
organism.
several
different
scales,
including
Redwood
No. 1 atwhich
100F, Engler
Toxicity:
The relative
degree
of being
poisonous
or toxic.
A condition
Seconds,
etc.destroy
The most
commonormethod for
may existDegrees,
in wastesSaybolt
and will
inhibit or
the growth
designation
of viscosity is kinematic viscosity, measured in
function of
certain organisms.
centistokes, cst @ 50Centigrade. (See Saybolt Furol, Saybolt
Universal, Engler, Redwood, Kinematic)
Vis-Breaking:
A light thermal cracking process carried out on a fuel oil during
the refining process to reduce product viscosity without
blending.
Volatile:
A volatile substance is one that is capable of being evaporated or
changed to a vapor at a relatively low temperature. Volatile
substances also can be partially removed by air stripping.
HISTORY OF THE OIL INDUSTRY IN INDIA
The history of the Indian oil industry extends back to the period of the British Raj, at a time
when petroleum first became a primary global energy source.

Contents

Colonial rule, 1858-1947

Independence, 1947-1991

Liberalisation, 1991-present

Colonial rule, 1858-1947

The first oil deposits in India were discovered in 1889 near the town of Digboi in the state of Assam. This
discovery came on the heels of industrial development. The Assam Railways and Trading Company
(ARTC) had recently opened the area for trade by building a railway and later finding oil nearby. The first
well was completed in 1890 and the Assam Oil Company was established in 1899 to oversee production.
At its peak during the Second World War the Digboi oil fields were producing 7,000 barrels per day.At
the turn of the century however as the best and most profitable uses for oil were still being debated, India
was seen not as a producer but as a market, most notably for fuel oil for cooking. As the potential
applications for oil shifted from domestic to industrial and military usage [ this was no longer the case and
apart from its small domestic production India was largely ignored in terms of oil diplomacy and even
written off by some as hydrocarbon barren. Despite this however British colonial rule laid down much of
the countrys infrastructure, most notably the railways.
Independence, 1947-1991
After India won independence in 1947, the new government naturally wanted to move away from the
colonial experience which was regarded as exploitative. In terms of economic policy this meant a far
bigger role for the state. This resulted in a focus on domestic industrial and agricultural production and
consumption, a large public sector, economic protectionism, and central economic planning.
The foreign companies continued to play a key role in the oil industry. Oil India Limited was still a joint
venture involving the Indian government and the British owned Burmah Oil Company (presently, BP)
whilst the Indo-Stanvac Petroleum project in West Bengal was between the Indian government and the
American company SOCONY-Vacuum (presently, ExxonMobil). This changed in 1956 when the
government adopted an industrial policy that placed oil as a schedule A industry and put its future
development in the hands of the state. [5] In October 1959 an Act of Parliament was passed which gave the
state owned Oil and Natural Gas Commission (ONGC) the powers to plan, organise, and implement
programmes for the development of oil resources and the sale of petroleum products and also to perform
plans sent down from central government.

In order to find the expertise necessary to reach these goals foreign experts from West Germany,
Romania, the US, and the Soviet Union were brought in.The Soviet experts were the most influential and
they drew up detailed plans for further oil exploration which were to form part of the second five-year
plan. India thus adopted the Soviet model of economic development and the state continues to implement
five-year plans as part of its drive towards modernity. [6] The increased focus on exploration resulted in the
discovery of several new oil fields most notably the off-shore Bombay High field which remains by a
long margin Indias most productive well.
Liberalisation, 1991-present
The process of economic liberalisation in India began in 1991 when India defaulted on her loans and
asked for a $1.8 billion bailout from the IMF.[7] This was a trickle-down effect of the culmination of
the cold war era; marked by the 1991 collapse of the Soviet Union, Indias main trading partner. The
bailout was done on the condition that the government initiate further reforms, thus paving the way for
Indias emergence as a free market economy.
For the ONGC this meant being reorganised into a public limited company (it is now called for Oil and
Natural Gas Corporation) and around 2% of government held stocks were sold off. [5] Despite this however
the government still plays a pivotal role and ONGC is still responsible for 77% of oil and 81% of gas
production while the Indian Oil Corporation (IOC) owns most of the refineries putting it within the top 20
oil companies in the world.[8] The government also maintains subsidised prices. [8] As a net importer of oil
however India faces the problem of meeting the energy demands for its rapidly expanding population and
economy and to this the ONGC has pursued drilling rights in Iran and Kazakhstan and has acquired
shares in exploration ventures in Indonesia, Libya, Nigeria, and Sudan. [8]
Indias choice of energy partners however, most notably Iran led to concerns radiating from the US. [8] A
key issue today is the proposed gas pipeline that will run from Turkmenistan to India through politically
unstable Afghanistan and also through Pakistan. [8] However despite Indias strong economic links with
Iran, India voted with the US when Irans nuclear program was discussed by the International Atomic
Energy Agency although there are still very real differences between the two countries when it comes to
dealing with Iran.[8]

Introduction- New Exploration Licensing Policy (NELP)

New Exploration Licensing Policy (NELP) was conceptualised by Amit B Singh (co-founder of Standard
Oil) after request by the Government of India, during 1997-98 to provide an equal platform to both Public
and Private sector companies in exploration and production of hydrocarbons with Directorate General of
Hydrocarbons (DGH) as a nodal agency for its implementation. India has an estimated sedimentary area
of 3.14 million km2. consisting of 26 sedimentary basins, of which, 57% (1.79 million km 2.) area is in
deepwater and remaining 43% (1.35 million km2.) area is in onland and shallow offshore. At present 1.06
million km2 area is held under Petroleum Exploration Licenses in 18 basins by national oil companies viz.
Oil and Natural Gas Corporation Limited (ONGC), OIL India Limited (OIL) and Private/Joint Venture

companies. Before implementation of the New Exploration Licensing Policy (NELP) in 1999, a mere
11% of Indian sedimentary basins were under exploration, which has now increased extensively over the
years.
Recently, bidding process was completed in NELP-IX. Till 2010, 8 rounds of NELP have been completed.
400 PSCs have been signed, out of which 168 are in operation. The private / JV companies contribute
about 46% of gas and 16% oil to the national Oil & Gas production. The Mangala fields in
Rajasthan and Krishna-Godavari Basins have been the major source for oil and gas fields.
History
New Exploration Licensing Policy (NELP) was formulated by the Government of India, during 1997-98
to provide level playing field for all the investors and providing several concessions and incentives to
both Public and Private sector companies in exploration and production of hydrocarbons with Directorate
General of Hydrocarbons (DGH) acting as a nodal agency for its implementation.
Need for NELP
India is the fifth largest consumer of primary energy and the third largest consumer of oil in the Asia
Pacific region after China and Japan. Due to high economic growth, there is a huge need for enhancing
supply of energy resources. Also, dependence on imported petroleum continues to grow and is ultimately
impacting the countrys long term growth. Of the 26 sedimentary basins identified in India, so far, only
20% of the total area has been well explored. The remaining areas need to be extensively explored with
the best of technologies, with special emphasis on the frontier basins. With the introduction of the New
Exploration Licensing Policy (NELP), the introduction of much-needed capital and state-of-the-art
technology to explore the sector could be made possible. With the policies and regulations being some of
the most transparent in the world, the NELP has revived a healthy spirit of competition between National
Oil Companies and private and multinational companies. The development of the exploration sector has
been significantly boosted through this policy, which brought major liberalization in the sector and
created pathways for private and foreign investment, where 100% Foreign Direct Investment (FDI) is
allowed. Under NELP, which became effective in February 1999, the process of competitive bidding is
followed wherein acreages are offered to the participating companies. By mid-2012, the ninth round of
bidding has been concluded along with fourth round for Coal Bed Methane (CBM) blocks. The
Government of India offered the highest ever number of 70 oil & gas exploration blocks covering an area
of about 1,63,535 km. and also making a parallel offer of 10 blocks under the fourth round of Coal Bed
Methane Policy (CBM-IV) for exploration and production of Coal Bed Methane. The Government of
India launched the Ninth round of offers for exploration acreages, NELP IX on 15 October 2010.

NELP-I
Under the First round of New Exploration Licensing Policy, bids were invited by the Government of India
on 8 January 1999 for 48 blocks for exploration of oil and natural gas. Of these, 12 blocks were
deepwater (beyond 400m isobath), 26 shallow offshore and 10 were onshore blocks. The PSCs were
signed for 24 exploration blocks comprising 7 deepwater, 16 shallow offshore and 1 onshore. At present,
11 exploration blocks are under operation and 13 blocks have been relinquished.
NELP-II
Under the second round of New Exploration Licensing Policy, bids were invited by the Government of
India 15 December 2000 for 25 blocks for exploration of oil and natural gas. Of these, 8 blocks were
deepwater (beyond 400m isobath), 8 shallow offshore and 9 were onland blocks. The PSCs were signed
for 23 exploration blocks comprising 8 deepwater, 8 shallow offshore and 7 onland. At present, 4
exploration blocks are under operation and 19 blocks have been relinquished. [3]
NELP-III
Under the third round of New Exploration Licensing Policy, bids were invited by the Government of
India on 27 March 2002 for 27 blocks for exploration of oil and natural gas. [4] Of these, 9 blocks were
deepwater (beyond 400m isobath), 7 shallow offshore and 11 were onland blocks The PSCs were signed
for 23 exploration blocks comprising 9 deepwater, 6 shallow offshore and 8 onland. The exploration
activities are going on in 19 awarded blocks and 4 blocks had been relinquished.
NELP-IV
Under the Fourth round of New Exploration Licensing Policy, bids were invited by the Government of
India on 8 May 2003 for 24 blocks for exploration of oil and natural gas. Of these, 12 blocks were
deepwater (beyond 400m isobath), 1 shallow offshore and 11 were onland blocks. The PSCs were signed
for 20 exploration blocks. At present 19 exploration blocks are operating, comprising 9 deepwater and 10
onland. The exploration activities are going on in all the 19 awarded blocks.
NELP-V
Under the Fifth round of New Exploration Licensing Policy, bids were invited by the Government of
India for 20 blocks for exploration of oil and natural gas. The Government received 69 bids from 48
global and domestic majors, including BP (formerly British Petroleum) and Reliance Industries, to
participate in the oil exploration activity under the fifth round for 20 oil exploration blocks. Of these, 6
blocks were deepwater (beyond 400m isobath), 2 shallow offshore and 12 were onland blocks. The largest
number of bids received were from Reliance which had bid for 12 of the 20 blocks, followed by ONGC
which had bid for 10 and Oil India Ltd which put in a bid for six blocks.

The PSCs were signed for all 20 exploration blocks. The exploration activity is going on in all the 20
awarded blocks.[7] As of 2012, ENI is still awaiting Drilling permission from the department of space due
to the blocks proximity to a rocket launch zone (in Andaman and Nicobar Islands) of Isro.
NELP-VI
A total of fifty five blocks (55) were offered during the NELP VI round for exploration of oil and natural
gas in 16 prospective sedimentary basins consists of 25 Onland, 6 Shallow Water and 24 Deep Water
blocks. 165 bids from 68 E&P companies (36 foreign and 32 Indian) had participated in the bidding
process as consortium/ individually.[8] The PSCs were signed for 52 exploration blocks comprising 21
deepwater, 6 shallow water and 25 onland. The exploration activities are going on in all the 52 awarded
blocks.
NELP-VII
A total of fifty Seven blocks (57) were offered during the NELP VII round for exploration of oil and
natural gas in 18 prospective sedimentary basins consists of 29 Onland, 9 Shallow Water and 19 Deep
Water blocks. On 22 December 2008 Contracts were signed for 41 blocks out of which 11 blocks in Deep
Water, 7 blocks in Shallow Water and 23 Onland blocks.[10]
NELP-VIII
Under the eighth round of New Exploration Licensing Policy (NELP-VIII), Government has offered 31
production sharing contracts on 30 June 2010. There are 8 deepwater blocks, 11 shallow water blocks and
12 onland blocks which are in the states of Assam (2), Gujarat (8), Madhya Pradesh (1) and Manipur (1).
NELP-IX
A total of 33 exploration blocks were offered during the bidding process. State-owned Oil and Natural
Gas Corp (ONGC) successfully bid for 10 of the 33 oil and gas exploration blocks, Oil India Ltd (OIL)
bid for as many as 29 blocks and managed to get 10. Reliance Industries bid for two deep-sea blocks in
the Andaman Basin in the Bay of Bengal and four onshore blocks in Rajasthan and Gujarat.
Chronology OF Exploration and Production Activities in India
India began its journey into Oil Exploration and Production just seven years after the famous Drake
Well, which heralded the beginning of the Petroleum era, which was drilled in Titus Ville, Pennsylvania,
USA (1859). The oil reserves were located in the dense jungles, swamps, damp and undulated terrain of
Brahmaputra Valley, Assam in the mid-19th century. The first well was drilled by Mr.Goodenough of
Mckillop, Stewart and Co.; in Upper Assam in 1866 following a hint of oil show detected by the fleet of
elephants carrying logs.

Oil reserves are the amount of technically and economically recoverable oil. Reserves may
be for a well, for a reservoir, for a field, for a nation, or for the world. Different classifications
of reserves are related to their degree of certainty.
All reserve estimates involve uncertainty, depending on the amount of reliable geologic and
engineering data available and the interpretation of those data. The relative degree of
uncertainty can be expressed by dividing reserves into two principal classifications
"proven" (or "proved") and "unproven" (or "unproved").Unproven reserves can further be
divided into two subcategories"probable" and "possible"to indicate the relative degree of
uncertainty about their existence.The most commonly accepted definitions of these are
based on those approved by the Society of Petroleum Engineers (SPE) and the World
Petroleum Council (WPC) in 1997.
Proven reserves are those reserves claimed to have a reasonable certainty (normally at
least 90% confidence) of being recoverable under existing economic and political conditions,
with existing technology. Industry specialists refer to this as P90 (that is, having a 90%
certainty of being produced). Proven reserves are also known in the industry as 1P.
Proven reserves are further subdivided into "proven developed" (PD) and "proven
undeveloped" (PUD). PD reserves are reserves that can be produced with existing wells and
perforations, or from additional reservoirs where minimal additional investment (operating
expense) is required. PUD reserves require additional capital investment (e.g., drilling new
wells) to bring the oil to the surface.

Unproven reserves
Unproven reserves are based on geological and/or engineering data similar to that used in
estimates of proven reserves, but technical, contractual, or regulatory uncertainties preclude
such reserves being classified as proven. [11] Unproven reserves may be used internally by oil
companies and government agencies for future planning purposes but are not routinely
compiled. They are sub-classified as probable and possible.[11]
Probable reserves are attributed to known accumulations and claim a 50% confidence level of
recovery. Industry specialists refer to them as "P50" (i.e., having a 50% certainty of being
produced). These reserves are also referred to in the industry as "2P" (proven plus probable).

Possible reserves are attributed to known accumulations that have a less likely chance of being
recovered than probable reserves. This term is often used for reserves which are claimed to
have at least a 10% certainty of being produced ("P10"). Reasons for classifying reserves as
possible include varying interpretations of geology, reserves not producible at commercial rates,

uncertainty due to reserve infill (seepage from adjacent areas) and projected reserves based on
future recovery methods. They are referred to in the industry as "3P" (proven plus probable plus
possible)

"1P reserves" = proven reserves (both proved developed reserves + proved undeveloped
reserves).

"2P reserves" = 1P (proven reserves) + probable reserves, hence "proved AND probable.

"3P reserves" = the sum of 2P (proven reserves + probable reserves) + possible

reserves, all 3Ps "proven AND probable AND possible.

OIL RESERVES:
Oil reserves are the amount of technically and economically recoverable oil.
Reserves may be for a well, for a reservoir, for a field, for a nation, or for the world.
Different classifications of reserves are related to their degree of certainty.
The total estimated amount of oil in an oil reservoir, including both producible and
non-producible

oil,

is

called oil

in

place.

However,

because

of reservoir

characteristics and limitations in petroleum extraction technologies, only a

fraction of this oil can be brought to the surface, and it is only this producible fraction
that is considered to be reserves. The ratio of reserves to the total amount of oil in a
particular reservoir is called the recovery factor. Determining a recovery factor for
a given field depends on several features of the operation, including method of oil
recovery used and technological developments.
Based on data from OPEC at the beginning of 2013 the highest proved oil reserves
including

non-conventional

oil

deposits

are

inVenezuela (20%

of

global

reserves), Saudi Arabia (18% of global reserves), Canada (13% of global reserves),
and Iran (9%).
Because the geology of the subsurface cannot be examined directly, indirect
techniques must be used to estimate the size and recoverability of the resource.
While new technologies have increased the accuracy of these techniques, significant
uncertainties still remain. In general, most early estimates of the reserves of an oil
field are

conservative

called reserves growth.

and tend to grow

with

time.

This phenomenon

is

Many oil-producing nations do not reveal their reservoir engineering field data and
instead provide unaudited claims for their oil reserves. The numbers disclosed by
some national governments are suspected of being manipulated for political reasons.
All reserve estimates involve uncertainty, depending on the amount of reliable
geologic and engineering data available and the interpretation of those data. The
relative degree of uncertainty can be expressed by dividing reserves into two
principal classifications"proven" (or "proved") and "unproven" (or "unproved").
[6]

Unproven reserves can further be divided into two subcategories"probable" and

"possible"to indicate the relative degree of uncertainty about their existence. The
most commonly accepted definitions of these are based on those approved by
the Society of Petroleum Engineers (SPE) and the World Petroleum Council (WPC) in
1997.
PROVEN RESERVES
Proven reserves are those reserves claimed to have a reasonable certainty (normally at least 90%
confidence) of being recoverable under existing economic and political conditions, with existing
technology. Industry specialists refer to this as P90 (that is, having a 90% certainty of being produced).
Proven reserves are also known in the industry as 1P.[8][9]
Proven reserves are further subdivided into "proven developed" (PD) and "proven undeveloped" (PUD). [9]
[10]

PD reserves are reserves that can be produced with existing wells and perforations, or from additional

reservoirs where minimal additional investment (operating expense) is required. [10] PUD reserves require
additional capital investment (e.g., drilling new wells) to bring the oil to the surface. [8][10]
Until December 2009 "1P" proven reserves were the only type the U.S. Securities and Exchange
Commission allowed oil companies to report to investors. Companies listed on U.S. stock exchanges must
substantiate their claims, but many governments and national oil companies do not disclose verifying data
to support their claims. Since January 2010 the SEC now allows companies to also provide additional
optional information declaring "2P" (both proven and probable) and "3P" (proven + probable + possible)
provided the evaluation is verified by qualified third party consultants, though many companies choose to
use 2P and 3P estimates only for internal purposes.

UNPROVEN RESERVES
An oil well in Canada, which has the world's third largest oil reserves.

Unproven reserves are based on geological and/or engineering data similar to that used in estimates of
proven reserves, but technical, contractual, or regulatory uncertainties preclude such reserves being
classified as proven.Unproven reserves may be used internally by oil companies and government agencies
for

future

planning

purposes

but

are

not

routinely

compiled.

They

are

sub-classified

as probable and possible.

Probable reserves are attributed to known accumulations and claim a 50% confidence level of recovery.
Industry specialists refer to them as "P50" (i.e., having a 50% certainty of being produced). These
reserves are also referred to in the industry as "2P" (proven plus probable). [8]
Possible reserves are attributed to known accumulations that have a less likely chance of being recovered
than probable reserves. This term is often used for reserves which are claimed to have at least a 10%
certainty of being produced ("P10"). Reasons for classifying reserves as possible include varying
interpretations of geology, reserves not producible at commercial rates, uncertainty due to reserve infill
(seepage from adjacent areas) and projected reserves based on future recovery methods. They are referred
to in the industry as "3P" (proven plus probable plus possible).