Chapter 2 Flashcards
1
Q
a complex series of processes that includes
the EXTRACTION, PRODUCTION, TRANSPORTATION, REFINING,
STORAGE, and DISTRIBUTION of oil and gas.
A
OIL AND GAS SUPPLY CHAIN -
2
Q
focuses on identifying oil and gas reserves located beneath the Earth’s surface.
A
Exploration
3
Q
A process used to verify the presence of
hydrocarbons after reserves are identified
A
exploration drilling
4
Q
follows successful exploration and involves the extraction of hydrocarbons from reservoirs
A
production
5
Q
- the movement of oil and gas using PIPELINES (over
land), TANKERS (for international shipments), and TRUCKS.
A
transportation
6
Q
the phase that ensures refined products like gasoline, diesel,
and jet fuel reach retail outlets, industrial users, and end-users.
A
distributions
7
Q
the process of converting CRUDE OIL into usable products like
gasoline, diesel, and kerosene. This involves techniques such as DISTILLATION,
CRACKING, and REFORMING
A
refining
8
Q
removing impurities from natural gas and
separating valuable components like METHANE, ETHANE, PROPANE, and
BUTANE for heating, electricity, and industrial use
A
processing natural gas
9
Q
holding refined products and natural gas in tanks or underground
facilities to manage supply and demand, especially during peak times or
disruptions.
A
storage
10
Q
- these coordinate the logistics of moving products
from refineries to retail outlets, managing inventory and ensuring product
availability
A
distribution centers
11
Q
- the sale of refined products like gasoline and diesel at gas stations.
A
retail
12
Q
- the utilization of oil and gas products in sectors such as
transportation, residential heating, electricity generation, and manufacturing.
A
end-use
13
Q
INTERNATIONAL OIL COMPANIES (IOCs) - major privately-owned
companies like ExxonMobil, BP, and Shell that operate globally in exploration,
production, refining, and distribution of oil and gas
A
INTERNATIONAL OIL COMPANIES (IOCs) -
14
Q
state-owned companies such as
Saudi Aramco, Gazprom, and Petrobras that control large portions of the world’s
oil and gas reserves and influence global supply through production decisions
and policies.
A
NATIONAL OIL COMPANIES (NOCs) -
15
Q
________________ coordinates production policies among member countries to manage global oilprices and supply.
A
OPEC -the Organization of the Petroleum Exporting Countries
16
Q
OPEC MEANING
A
the Organization of the Petroleum Exporting Countries
17
Q
conflicts, trade sanctions, and diplomatic relations
can disrupt the oil and gas supply chain, affecting production, transportation, and
exports, often leading to supply shortages and price spikes.
A
GEOPOLITICAL EVENTS -
18
Q
policies on climate change and trade
influence production levels, technological investments, and the shift towards
alternative energy sources.
A
INTERNATIONAL AGREEMENTS -
19
Q
- the balance between supply and demand dictates
oil and gas prices. Prices rise when demand exceeds supply and fall when
supply surpasses demand.
A
SUPPLY AND DEMAND
20
Q
innovations such as shale oil
extraction and EOR (Enhanced Oil Recovery) methods can shift the market by
increasing supply capabilities.
A
TECHNOLOGICAL ADVANCEMENTS -
21
Q
wars, natural disasters, and economic changes
like recessions or booms cause price volatility and market shifts.
A
GEOPOLITICAL IMPACT-
22
Q
this includes finding and producing crude oil and
natural gas through exploration, drilling, and extraction. It involves contractors
and service companies supporting oil and gas operators.
A
UPSTREAM SEGMENT -
23
Q
focuses on processing, storing, and transporting oil
and gas commodities. It acts as a link between the upstream and downstream
sectors
A
MIDSTREAM SEGMENT -
24
Q
encompasses refining, distributing, and retailing
oil and gas products. This includes the production of gasoline, diesel, and other
refined products for end-users.
A
DOWNSTREAM SEGMENT -
25
involves drilling, extraction, and recovery of crude oil using
sophisticated technologies like rotary drilling and EOR techniques.
extraction
26
transport crude oil from wellheads to short-term
storage facilities.
GATHERING PIPELINES -
27
- used to temporarily hold crude oil before being sent
to refineries, managing supply fluctuations.
SHORT-TERM STORAGE
28
- crude oil is transformed into consumable products (e.g., gasoline,
diesel) through processes like distillation and catalytic cracking.
REFINING
29
critical for importing and exporting crude oil, handling large tankers, and
transferring oil to storage or refineries.
PORTS-
30
refined products are transported to end-use locations (e.g., fuel
stations, airports) via pipelines, trucks, and ships.
distribution
31
the process of CLEANING and
SEPARATING natural gas into usable products. When NATURAL GAS is
extracted from the ground, it contains IMPURITIES like WATER, CARBON
DIOXIDE, and SULFUR, as well as other gases like METHANE, ETHANE,
PROPANE, and BUTANE.
natural gas processing
32
the NATURAL GAS is separated from other substances like
OIL, WATER, and SAND
separation
33
unwanted elements like SULFUR and CARBON
DIOXIDE are removed to make the gas CLEANER and SAFER.
removing impurities
34
the valuable parts of NATURAL GAS,
like METHANE (for heating and electricity) and PROPANE/BUTANE (for cooking
or fuel), are separated for different uses.
separation of components
35
is the process of converting liquefied natural gas (LNG) back into its gaseous form, making it suitable for pipeline transportation and end-use. This process takes
regasification
36
Liquefaction is the process of converting natural gas into a liquid state by cooling it to____________, producing liquefied natural gas (LNG).
-260°F
37
is the process of converting natural gas into a liquid state producing liquefied natural gas (LNG).
Liquefaction
38
is highly uneven, with
the majority concentrated in a few regions.
. DISTRIBUTION OF OIL RESERVES WORLDWIDE -
39
has the largest share oil reserves
middle east (Saudi Arabia, Iran, Iraq, Kuwait, and the UAE)
40
holding the largest
reserves globally, primarily heavy crude
VENEZUELA
41
are emergency oil
stockpiles maintained by governments to mitigate supply disruptions caused by
crises such as wars, natural disasters, or technical failures. C
STRATEGIC PETROLEUM RESERVES (SPRs) -
42
has the largest SPR
US
43
mandates that member countries hold 90 days of net imports in reserve for
global security.
The International Energy Agency
44
(developed, high-income countries like the U.S.,
Canada, and European nations
OECD countries
45
OECD countries
(developed, high-income countries like the U.S.,
Canada, and European nations
46
developing
economies like those in the Middle East, Africa, China, and Russia
non-OECD countries
47
non-OECD countries
developing
economies like those in the Middle East, Africa, China, and Russia
48
OECD meaning
(Organization for Economic
Co-operation and Development)
49
has been a dominant oil-producing region throughout this
period.
Middle east
50
oil production in this region grew
steadily until the late 1980s, peaking before declining after the collapse of the
Soviet Union in the early 1990s
former soviet union and russia
51
oil production began relatively low in the 1970s but saw
steady growth, especially from the late 1980s onward.
china
52
Oil production in _____-grew consistently from the 1970s, with a
notable increase in the 2000s due to the development of new oil fields in
countries like Nigeria and Angola.
Africa
53
refer to the various factors and processes that determine the
availability of crude oil in global markets.
oil supply
54
crucial for petroleum engineers as they directly influence production strategies,
market stability, and long-term planning within the oil industry.
oil supply
55
- these are quantities of crude oil that can be extracted
RESERVES
56
Oil that is very likely to be recovered
proven reserves
57
High certainty based on detailed studies and existing wells
proven reserves
58
Oil that has a good chance of being recovered but with some
uncertainty
probable reserves
59
At least a 50% chance of being extracted.
probable reserves
60
Oil that is less likely to be recovered
possible reserves
61
Less than a 50% chance of extraction.
possible reserves
62
- this includes all oil quantities both discovered and undiscovered
that might be recoverable but aren't currently feasible to extract economically.
resources
63
efer to the various factors and processes that determine the availability of crude oil in global markets.
oil supply dynamics
64
show how much oil can be extracted from a
reservoir over time
oil production rates
65
This is the initial stage of oil production
build-up phase
66
During this phase, production rates gradually increase as new wells are drilled and brought online. The increase in production
build-up phase
67
here production levels off and remains relatively stable. During this phase, the reservoir produces oil at its maximum efficient rate, meaning that the extraction process is optimized to maintain a steady flow of oil.
plateau phase
68
where production rates start to decrease. This decline is primarily due to the natural drop in reservoir pressure as oil is extracted, reducing the force that drives the oil to the surface.
decline phase
69
is significantly influenced by the activities of both OPEC (Organization of the Petroleum Exporting Countries) and Non-OPEC producers.
global oil supply
70
was created in Baghdad in September 1960 by founding members Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela
OPEC (Organization of the Petroleum Exporting Countries)
71
The headquarters of the organization are in ___________________, where the OPEC Secretariat, the executive organ, carries out OPEC's day-to-day business
Vienna, Austria
72
refers to a group of 13 of the world's major oil-exporting nations.
OPEC (Organization of the Petroleum Exporting Countries)
73
74
is a cartel consisting of major oil-producing countries that coordinate their production policies to influence global oil prices.
OPEC
75
operates by setting production quotas for its member countries.
OPEC
76
____________ are also influenced by several important factors that can affect its stability, beyond the control of OPEC and Non-OPEC producers.
oil and gas supply chain
77
Non-OPEC producers, such as....
Russia, the United States, and Canada
78
Factors Affecting Oil Supply, WHAT ARE THOSE
1. Technological Advances in Production
2. Exploration Success Rates
3. Political Stability and Regulatory Environment
4. Global Supply and Demand Balance
78
_________ such as horizontal drilling and hydraulic fracturing, have revolutionized oil production.
Technological advancements,
78
The rise of shale oil production in the _______________, for instance, has significantly increased global supply and influenced market dynamics, often countering OPEC's production decisions.
United States
79
These innovations allow for the extraction of oil from previously inaccessible or uneconomical reserves, such as shale formations. Enhanced Oil Recovery (EOR) techniques also extend the productive life of existing oil fields, increasing the total recoverable oil and stabilizing supply.
Technological advancements,
80
Technological advancements, such as _____________________, have revolutionized oil production.
horizontal drilling and hydraulic fracturing
81
The success of ___________ in discovering new oil reserves directly impacts future oil supply.
exploration activities
82
The balance between _______ is a key determinant of market dynamics.
global oil supply and demand
83
when demand _______ supply, prices ______, encouraging increased production and exploration activity.
outpaces, rise
84
When supply ________ demand, oil prices tend to _______, leading to potential production cuts or delays in developing new projects.
exceeds , fall
85
______ is one of the largest consumers of oil
United States
85
_________ refer to the factors and trends that influence the consumption of oil and gas globally.
Oil demand dynamics
86
THe rapid industrialization and urbanization have made ____ one of the top oil consumers globally.
China
87
The ______________ is the largest consumer of oil, accounting for nearly half of the global oil demand.
transportation sector
87
Factors Affecting Oil Demand
Economic Growth and Industrial Activity
Energy Efficiency Improvements
Alternative Energy Sources
88
____ is a primary driver of oil demand.
Economic growth
89
two types of major oil companies
International Oil Companies (I0Cs) and National Oil Companies (NOCs).
89
The ___________ is shaped by a variety of key players, including major oil companies, oil traders, brokers, and financial markets.
global oil industry
89
are characterized by their extensive global operations, advanced technology, and significant capital resources. They typically focus on maximizing profits and shareholder value, often leading to investments in high-risk, high-reward exploration projects around the world.
International Oil Companies (I0Cs)
90
Some of the largest IOCs include
ExxonMobil (United States)
BP (United Kingdom)
Shell (Netherlands/United Kingdom)
Chevron (United States)
TotalEnergies (France)
91
are large, privately owned companies that operate across multiple countries and are primarily driven by shareholder interests.
International Oil Companies (I0Cs)
91
are often influenced by national interests and government policies, with their profits often serving as a major source of revenue for the state.
National Oil Companies (NOCs
92
are state-owned entities that control the majority of the world's oil reserves. These companies are responsible for managing and developing their country's oil resources.
National Oil Companies (NOCs
93
____________Oil traders and brokers are essential participants in the global oil market, playing key roles in the movement of crude oil and refined products from producers to consumers.
Oil traders and brokers
93
Some of the largest NOCs include
Saudi Aramco (Saudi Arabia)
PetroChina (China)
Gazprom (Russia)
Petrobras (Brazil)
National Iranian Oil Company (NIOC) (Iran)
94
are individuals or companies that buy and sell oil in global markets.
Oil traders
95
______involves the actual buying and selling of barrels of oil. Traders purchase oil from producers and sell it to refiners or other buyers. The objective is to profit from differences in prices across different markets or regions.
Physical trading
95
____________________involves trading oil-related financial instruments like futures contracts. Futures contracts are agreements to buy or sell oil at a specified price on a future date. Traders use these instruments to speculate on future price movements, aiming to profit from changes in oil prices.
Financial trading
95
are particularly important in complex markets where direct interactions between producers and end-users might be limited.
Brokers
96
Major oil trading companies, such as ____________________ operate on a global scale, handling large volumes of oil and engaging in both physical and financial trading.
Vitol, Glencore, and Trafigura,
97
________Oil brokersOil brokers serve as intermediaries in the oil market, connecting buyers and sellers who may not have direct relationships.
Oil brokers
98
play a critical role in determining oil prices by facilitating the trading of various financial instruments such as oil futures, options, and derivatives.
Financial markets
99
Oil futures, which are contracts to buy or sell a certain amount of oil at a predetermined price on a future date, are traded on exchanges like
New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE).
100
trade oil futures to profit from price changes, often without intending to actually receive or deliver the oil.
Speculators
100
In the oil market, there are two main types of participants
speculators and hedgers.
101
use oil futures to protect themselves against the risk of price fluctuations.
Hedgers
101
___________which are standard types of crude oil used as reference points for pricing.
benchmarks
102
The most commonly used benchmarks are __________which set the prices for other types of oil worldwide.
West Texas Intermediate (WTI) and Brent Crude,
103
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