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INTRO TO OIL > Chapter 2 > Flashcards

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 -

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2
Q

focuses on identifying oil and gas reserves located beneath the Earth’s surface.

A

Exploration

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3
Q

A process used to verify the presence of
hydrocarbons after reserves are identified

A

exploration drilling

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4
Q

follows successful exploration and involves the extraction of hydrocarbons from reservoirs

A

production

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5
Q
  • the movement of oil and gas using PIPELINES (over
    land), TANKERS (for international shipments), and TRUCKS.
A

transportation

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6
Q

the phase that ensures refined products like gasoline, diesel,
and jet fuel reach retail outlets, industrial users, and end-users.

A

distributions

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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

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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

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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

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10
Q
  • these coordinate the logistics of moving products
    from refineries to retail outlets, managing inventory and ensuring product
    availability
A

distribution centers

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11
Q
  • the sale of refined products like gasoline and diesel at gas stations.
A

retail

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12
Q
  • the utilization of oil and gas products in sectors such as
    transportation, residential heating, electricity generation, and manufacturing.
A

end-use

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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) -

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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) -

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15
Q

________________ coordinates production policies among member countries to manage global oilprices and supply.

A

OPEC -the Organization of the Petroleum Exporting Countries

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16
Q

OPEC MEANING

A

the Organization of the Petroleum Exporting Countries

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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 -

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18
Q

policies on climate change and trade
influence production levels, technological investments, and the shift towards
alternative energy sources.

A

INTERNATIONAL AGREEMENTS -

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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

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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 -

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21
Q

wars, natural disasters, and economic changes
like recessions or booms cause price volatility and market shifts.

A

GEOPOLITICAL IMPACT-

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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 -

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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 -

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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 -

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25
Q

involves drilling, extraction, and recovery of crude oil using
sophisticated technologies like rotary drilling and EOR techniques.

A

extraction

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26
Q

transport crude oil from wellheads to short-term
storage facilities.

A

GATHERING PIPELINES -

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27
Q
  • used to temporarily hold crude oil before being sent
    to refineries, managing supply fluctuations.
A

SHORT-TERM STORAGE

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28
Q
  • crude oil is transformed into consumable products (e.g., gasoline,
    diesel) through processes like distillation and catalytic cracking.
A

REFINING

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29
Q

critical for importing and exporting crude oil, handling large tankers, and
transferring oil to storage or refineries.

A

PORTS-

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30
Q

refined products are transported to end-use locations (e.g., fuel
stations, airports) via pipelines, trucks, and ships.

A

distribution

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31
Q

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.

A

natural gas processing

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32
Q

the NATURAL GAS is separated from other substances like
OIL, WATER, and SAND

A

separation

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33
Q

unwanted elements like SULFUR and CARBON
DIOXIDE are removed to make the gas CLEANER and SAFER.

A

removing impurities

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34
Q

the valuable parts of NATURAL GAS,
like METHANE (for heating and electricity) and PROPANE/BUTANE (for cooking
or fuel), are separated for different uses.

A

separation of components

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35
Q

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

A

regasification

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36
Q

Liquefaction is the process of converting natural gas into a liquid state by cooling it to____________, producing liquefied natural gas (LNG).

A

-260°F

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37
Q

is the process of converting natural gas into a liquid state producing liquefied natural gas (LNG).

A

Liquefaction

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38
Q

is highly uneven, with
the majority concentrated in a few regions.

A

. DISTRIBUTION OF OIL RESERVES WORLDWIDE -

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39
Q

has the largest share oil reserves

A

middle east (Saudi Arabia, Iran, Iraq, Kuwait, and the UAE)

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40
Q

holding the largest
reserves globally, primarily heavy crude

A

VENEZUELA

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41
Q

are emergency oil
stockpiles maintained by governments to mitigate supply disruptions caused by
crises such as wars, natural disasters, or technical failures. C

A

STRATEGIC PETROLEUM RESERVES (SPRs) -

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42
Q

has the largest SPR

A

US

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43
Q

mandates that member countries hold 90 days of net imports in reserve for
global security.

A

The International Energy Agency

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44
Q

(developed, high-income countries like the U.S.,
Canada, and European nations

A

OECD countries

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45
Q

OECD countries

A

(developed, high-income countries like the U.S.,
Canada, and European nations

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46
Q

developing
economies like those in the Middle East, Africa, China, and Russia

A

non-OECD countries

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47
Q

non-OECD countries

A

developing
economies like those in the Middle East, Africa, China, and Russia

48
Q

OECD meaning

A

(Organization for Economic
Co-operation and Development)

49
Q

has been a dominant oil-producing region throughout this
period.

A

Middle east

50
Q

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

A

former soviet union and russia

51
Q

oil production began relatively low in the 1970s but saw
steady growth, especially from the late 1980s onward.

A

china

52
Q

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.

A

Africa

53
Q

refer to the various factors and processes that determine the
availability of crude oil in global markets.

A

oil supply

54
Q

crucial for petroleum engineers as they directly influence production strategies,
market stability, and long-term planning within the oil industry.

A

oil supply

55
Q
  • these are quantities of crude oil that can be extracted
A

RESERVES

56
Q

Oil that is very likely to be recovered

A

proven reserves

57
Q

High certainty based on detailed studies and existing wells

A

proven reserves

58
Q

Oil that has a good chance of being recovered but with some
uncertainty

A

probable reserves

59
Q

At least a 50% chance of being extracted.

A

probable reserves

60
Q

Oil that is less likely to be recovered

A

possible reserves

61
Q

Less than a 50% chance of extraction.

A

possible reserves

62
Q
  • this includes all oil quantities both discovered and undiscovered
    that might be recoverable but aren’t currently feasible to extract economically.
A

resources

63
Q

efer to the various factors and processes that determine the availability of crude oil in global markets.

A

oil supply dynamics

64
Q

show how much oil can be extracted from a
reservoir over time

A

oil production rates

65
Q

This is the initial stage of oil production

A

build-up phase

66
Q

During this phase, production rates gradually increase as new wells are drilled and brought online. The increase in production

A

build-up phase

67
Q

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.

A

plateau phase

68
Q

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.

A

decline phase

69
Q

is significantly influenced by the activities of both OPEC (Organization of the Petroleum Exporting Countries) and Non-OPEC producers.

A

global oil supply

70
Q

was created in Baghdad in September 1960 by founding members Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela

A

OPEC (Organization of the Petroleum Exporting Countries)

71
Q

The headquarters of the organization are in ___________________, where the OPEC Secretariat, the executive organ, carries out OPEC’s day-to-day business

A

Vienna, Austria

72
Q

refers to a group of 13 of the world’s major oil-exporting nations.

A

OPEC (Organization of the Petroleum Exporting Countries)

73
Q
A
74
Q

is a cartel consisting of major oil-producing countries that coordinate their production policies to influence global oil prices.

A

OPEC

75
Q

operates by setting production quotas for its member countries.

A

OPEC

76
Q

____________ are also influenced by several important factors that can affect its stability, beyond the control of OPEC and Non-OPEC producers.

A

oil and gas supply chain

77
Q

Non-OPEC producers, such as….

A

Russia, the United States, and Canada

78
Q

Factors Affecting Oil Supply, WHAT ARE THOSE

A
  1. Technological Advances in Production
  2. Exploration Success Rates
  3. Political Stability and Regulatory Environment
  4. Global Supply and Demand Balance
78
Q

_________ such as horizontal drilling and hydraulic fracturing, have revolutionized oil production.

A

Technological advancements,

78
Q

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.

A

United States

79
Q

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.

A

Technological advancements,

80
Q

Technological advancements, such as _____________________, have revolutionized oil production.

A

horizontal drilling and hydraulic fracturing

81
Q

The success of ___________ in discovering new oil reserves directly impacts future oil supply.

A

exploration activities

82
Q

The balance between _______ is a key determinant of market dynamics.

A

global oil supply and demand

83
Q

when demand _______ supply, prices ______, encouraging increased production and exploration activity.

A

outpaces, rise

84
Q

When supply ________ demand, oil prices tend to _______, leading to potential production cuts or delays in developing new projects.

A

exceeds , fall

85
Q

______ is one of the largest consumers of oil

A

United States

85
Q

_________ refer to the factors and trends that influence the consumption of oil and gas globally.

A

Oil demand dynamics

86
Q

THe rapid industrialization and urbanization have made ____ one of the top oil consumers globally.

A

China

87
Q

The ______________ is the largest consumer of oil, accounting for nearly half of the global oil demand.

A

transportation sector

87
Q

Factors Affecting Oil Demand

A

Economic Growth and Industrial Activity

Energy Efficiency Improvements

Alternative Energy Sources

88
Q

____ is a primary driver of oil demand.

A

Economic growth

89
Q

two types of major oil companies

A

International Oil Companies (I0Cs) and National Oil Companies (NOCs).

89
Q

The ___________ is shaped by a variety of key players, including major oil companies, oil traders, brokers, and financial markets.

A

global oil industry

89
Q

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.

A

International Oil Companies (I0Cs)

90
Q

Some of the largest IOCs include

A

ExxonMobil (United States)
BP (United Kingdom)
Shell (Netherlands/United Kingdom)
Chevron (United States)
TotalEnergies (France)

91
Q

are large, privately owned companies that operate across multiple countries and are primarily driven by shareholder interests.

A

International Oil Companies (I0Cs)

91
Q

are often influenced by national interests and government policies, with their profits often serving as a major source of revenue for the state.

A

National Oil Companies (NOCs

92
Q

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.

A

National Oil Companies (NOCs

93
Q

____________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.

A

Oil traders and brokers

93
Q

Some of the largest NOCs include

A

Saudi Aramco (Saudi Arabia)
PetroChina (China)
Gazprom (Russia)
Petrobras (Brazil)
National Iranian Oil Company (NIOC) (Iran)

94
Q

are individuals or companies that buy and sell oil in global markets.

A

Oil traders

95
Q

______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.

A

Physical trading

95
Q

____________________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.

A

Financial trading

95
Q

are particularly important in complex markets where direct interactions between producers and end-users might be limited.

A

Brokers

96
Q

Major oil trading companies, such as ____________________ operate on a global scale, handling large volumes of oil and engaging in both physical and financial trading.

A

Vitol, Glencore, and Trafigura,

97
Q

________Oil brokersOil brokers serve as intermediaries in the oil market, connecting buyers and sellers who may not have direct relationships.

A

Oil brokers

98
Q

play a critical role in determining oil prices by facilitating the trading of various financial instruments such as oil futures, options, and derivatives.

A

Financial markets

99
Q

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

A

New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE).

100
Q

trade oil futures to profit from price changes, often without intending to actually receive or deliver the oil.

A

Speculators

100
Q

In the oil market, there are two main types of participants

A

speculators and hedgers.

101
Q

use oil futures to protect themselves against the risk of price fluctuations.

A

Hedgers

101
Q

___________which are standard types of crude oil used as reference points for pricing.

A

benchmarks

102
Q

The most commonly used benchmarks are __________which set the prices for other types of oil worldwide.

A

West Texas Intermediate (WTI) and Brent Crude,

103
Q
A
103
Q
A
104
Q
A

INTRO TO OIL (4 decks)

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