Oil & GasGlossary of Terms
As the voice of the upstream oil and natural gas industry in Canada, we provide a comprehensive glossary of industry terms
The process of changing a once active well (one that will no longer produce oil or natural gas), to a state where it can be left indefinitely. All equipment that was used to produce oil and gas is removed and work is completed on the well to ensure that it will not cause harm to any environmental or human surroundings.
Accelerated capital cost allowance (CCA)
CCA is essentially a yearly deduction allowed by Revenue Canada (CRA) to expense a portion of an asset. For example if you a purchase a computer you are not allowed to expense it all in one year since the computer will likely last at least 3 years or longer. A useful life is assigned to an asset and an annual rate at which they should be expensed is applied. An accelerated CCA allows the company to shorten the number of years of an assets useful life, enabling them to claim the capital cost in a shorter period of time.
A well that is currently producing oil or natural gas.
The American Petroleum Institute gravity, or API gravity, is a measure of how heavy or light a petroleum liquid is compared to water: if its API gravity is greater than 10, it is lighter and floats on water; if less than 10, it is heavier and sinks. API gravity can be used to calculate how many barrels of crude oil can be produced per metric ton. Given that the weight of an oil plays an integral role in establishing its market value, API is an important measure.
A standard barrel of oil holds about 42 U.S. gallons or roughly 159 litres. The barrel was adopted in the early days of U.S. oil and gas production as a way to transport oil. Today, we continue to use it to measure transport volumes and pricing around the world.
Equipment to process or store crude oil from one or more wells.
Data and information used as a point of reference against which industry performance is measured.
A light aromatic hydrocarbon, which occurs naturally as a part of oil and natural gas activity. It’s considered to be a non-threshold carcinogen and is an occupational and public health concern.
Heavy, viscous oil that must be processed extensively to convert it into a crude oil before it can be used by refineries to produce gasoline and other petroleum products.
Carbon Capture and Storage (CCS)
The process of capturing and storing carbon dioxide (CO2) produced from the use of fossil fuels before it is released into the atmosphere. The carbon dioxide is then stored in carefully selected geological rock formation located below the earth’s surface.
Carbon leakage is a shift of greenhouse gas emissions from one part of the globe to another, so from one country to another. This occurs when companies choose to move oil and natural gas production to a region with lower costs, but often fewer or no environmental regulations. As a result, there is no reduction in net global greenhouse gas emissions.
A type of pump used to transfer fluids and the most common pump used in the oil and gas industry. Centrifugal pumps move fluid by rotation and draw fluid into the suction end of the pump and then, through centrifugal force, forces it out of the discharge end.
Coalbed Methane (CBM)
Natural gas generated and trapped in coal seams.
Hydrocarbons, usually produced with natural gas, which are liquid at normal pressure and temperature.
Conventional Crude Oil
Petroleum found in liquid form, flowing naturally or capable of being pumped without further processing or dilution.
A large, onsite containment system to safely store water used for or produced from oil and gas production.
Criteria Air Contaminants (CAC)
Emissions of various air pollutants that affect our health and contribute to air pollution problems such as smog. CACs are tracked by Environment Canada.
Changes to the environment caused by an activity in combination with other past, present and reasonably foreseeable human activities.
Production of oil or gas to date.
Cyclic Steam Stimulation (CSS)
Injecting steam into a well in a heavy-oil reservoir which introduces heat and thins the oil, allowing it to flow through the same well.
In accounting, the declining balance method is an accelerated depreciation system of recording larger depreciation expenses during the earlier years of an asset’s useful life while recording smaller depreciation during its later years. The depreciation is not equal each year, rather there are larger depreciations in the beginning and smaller deprecations in later years.
The physical property density is the ratio between mass and volume. The density of oil is measured in kilograms per cubic metre (kg/m3) or degrees on the American Petroleum Institute (API) gravity scale. In Western Canada oil up to 900 kg/m3 is considered light to medium crude — oil above this density is deemed as heavy oil or bitumen.
A well that is drilled in or next to a proven part of a pool to optimize petroleum production. Development wells are drilled after hydrocarbons have been discovered by successful exploration.
Dilbit (diluted bitumen) is a bitumen diluted with one or more lighter petroleum products called diluents, such as natural-gas condensates like naphtha. Diluting bitumen makes it much easier to transport, for example in pipelines.
Lighter viscosity petroleum products that are used to dilute bitumen for transportation in pipelines.
A well drilled at an angle from the vertical by using a slanted drilling rig or by deflecting the drill bit; directional wells are used to drill multiple wells from a common drilling pad or to reach a subsurface location beneath land where drilling cannot be done.
The first oil or gas well drilled in a new field.
The refining and marketing sector of the petroleum industry. (E.g. refineries, gas stations)
An ecosystem consists of a biological community of organisms together with their physical environment.
They can be marine, aquatic, or terrestrial.
Enhanced Oil Recovery (EOR)
Any method that increases oil production by using techniques or materials that are not part of normal pressure maintenance or water flooding operations. For example, natural gas can be injected into a reservoir to “enhance” or increase oil production.
The portion of the discovered resource base that is estimated to be recoverable using known technology under present and anticipated economic conditions. Includes proved plus a portion of probable (usually 50 per cent).
A well into an area where petroleum has not been previously found or one targeted for formations above or below known reservoirs.
A process unique to the oil sands industry, in which bitumen is separated from its source (oil sands).
Raw material supplied to a refinery or oil sands upgrader. For example, crude oil is a feedstock in a refining process which produces gasoline.
The surface area above one or more underground petroleum pools sharing the same or related infrastructure.
The controlled burning (flare) or release (vent) of natural gas that can’t be processed for sale or use because of technical or economic reasons.
Pipe, usually buried, through which oil or gas travels from the well to a processing facility.
A water-based fluid from the fracking process that flows back to the earth’s surface after completing the hydraulic fracturing of a shale gas reserve.
Fracking - see Hydraulic fracturing
A government-regulated technology used safely for more than 60 years to recover shale or tight natural gas that is trapped in deep underground rock.
Small leaks, primarily of methane, from valves and other equipment used in drilling and production.
Field equipment used to remove water from natural gas by using triethylene glycol or diethylene glycol.
Greenhouse Gas Intensity (GHG Intensity)
The average emission rate of a given greenhouse gas from a specific source. For example: greenhouse gases released per barrel of production.
Greenhouse Gases (GHGs)
A type of gas that contributes to the greenhouse effect by absorbing infrared radiation. GHG emissions from oil and natural gas development include carbon dioxide (CO2), methane, nitrous oxide and ozone.
Groundwater is the water found underground in the cracks and spaces in soil, sand and rock. It is stored in and moves slowly through geologic formations of soil, sand and rocks called aquifers.
Heavy Crude Oil
Oil with a gravity below 28 degrees API.
Drilling a well that deviates from the vertical and travels horizontally through a producing layer. See also Directional well.
Hot Water Process
A method for separating bitumen from oil sand using hot water and caustic soda, developed by Karl Clark of the Alberta Research Council.
Hydraulic Fracturing (also called Fracking)
A government-regulated technology used safety for more than 60 years to recover shale or tight natural gas that is trapped in deep underground rock. Also known as fracking, the process of pumping a fluid or gas down a well which causes the surrounding rocks to crack and allows natural gas or oil to be produced from tight formations.
Hydraulic Fracturing Fluids
Are comprised primarily of water and sand (~98.5%) and a small amount of additives (~1.5%).
There are two different methods of producing oil from oil sands: open-pit mining and in situ (latin, meaning “in place”) technology. Bitumen close to the surface is mined. Bitumen deep within the ground is produced in situ using specialized extraction techniques.
A well that has not produced oil or natural gas in 12 months.
Seismic or earthquake activity, which is caused by human activity.
Wells drilled between established producing wells on a lease in order to increase production from the reservoir.
Established reserves before production.
An injection well is used to place fluid underground into porous geologic formations. This could be steam, carbon dioxide, water or other substances to help maintain reservoir pressure, heat the oil or lower its viscosity, allowing it to flow to a producing well nearby.
Legal document giving an operator the right to drill for or produce oil or gas; also, the land on which a lease has been obtained.
Light Crude Oil
Liquid petroleum that has a low density and flows freely at room temperature.
Calcium carbonate-rich sedimentary rocks in which oil or gas reservoirs are often found.
Dugouts excavated next to drilling rigs that are lined with impermeable geosynthetic materials to safely store drilling fluids from natural gas or oil fields. In order to protect waterfowl and other wildlife from coming into contact with this water, wire fencing is often used to cover the pit and brightly coloured flagging on the fence perimeter acts as a deterrent.
Facilities that process natural gas from a gaseous state into a liquid state. Natural gas in a liquid state is called Liquefied Natural Gas (LNG). The process is completed using a cooling process. The natural gas is super-cooled to minus 260 degrees Fahrenheit (minus 162 degrees Celsius), converting it to LNG. In liquid form, natural gas takes up to 600 times less space than in its gaseous state, making it feasible and more economical for transport over long distances.
Liquefied Natural Gas
Natural gas, when produced and used domestically, is shipped in its vapour form through a network of distribution pipelines to a local distribution company and then delivered to a customer. When natural gas is shipped to a distant foreign market outside of where it is produced, the natural gas needs to ‘shrink in size’ or be compressed in order to ship large volumes economically – this liquefies the natural gas (LNG). The ‘shrinking’ of natural gas reduces its volume by a factor of about 600.
Medium Crude Oil
Liquid petroleum with a density between that of light and heavy crude oil.
The principal constituent of natural gas; the simplest hydrocarbon molecule, containing one carbon atom and four hydrogen atoms.
Medium-density refined petroleum products, including kerosene, stove oil, jet fuel and light fuel oil.
The processing, storage and transportation (primarily pipelines) sector of the petroleum industry.
Process water remaining after oil sands mining that is stored in settling basins called tailings ponds
An oil recovery process in which a fluid, capable of mixing completely with the oil it contacts, is injected into an oil reservoir to increase recovery.
Million tonnes per annum or year.
Mud (also Drilling Mud)
Fluid circulated down the drill pipe and up the annulus during drilling to remove cuttings, cool and lubricate the bit, and maintain desired pressure in the well.
Natural Gas Liquids
Liquids obtained during natural gas production, including ethane, propane, butanes and condensate.
A deposit of sand saturated with bitumen.
The company or individual responsible for managing an exploration, development or production operation.
A well or associated site that does not have a legally responsible and/or financially viable party to deal with its decommissioning and reclamation.
Ground-level ozone is a colourless gas that forms just above the earth’s surface.
Refers to microscopic solid or liquid particles that remain suspended in the air for some time.
The capacity of a reservoir rock to transmit fluids; how easily fluids can pass through rock.
A naturally occurring mixture of hydrocarbons found in geological formations beneath the earth’s surface that can be refined into a variety of products (e.g. gasoline, diesel).
A conical formation, higher than it is wide, usually composed of limestone, in which hydrocarbons might be trapped.
A natural underground reservoir containing an accumulation of petroleum.
The volume of spaces within rock that might contain oil and gas (like the amount of water a sponge can hold); the open or void space within rock ・usually expressed as a percentage of the total rock volume. Thus porosity measures the capacity of the rock to hold natural gas, crude oil or water.
The production of oil and gas from reservoirs using the natural energy available in the reservoirs and pumping techniques.
Water naturally present in the reservoir that is recovered during oil and gas production.
Government allocation of demand among pools and wells; pipeline allocation of demand among shippers.
The process of restoring the surface area of a well site, access road and related facilities to original conditions.
Reclamation Certified (rec cert)
Well sites that are remediated and reclaimed to the current regulatory standard.
Gasoline, diesel or other fuels which have been modified to reflect environmental concerns, performance standards, government regulations, customer preferences or new technologies.
Releases can occur when the structural integrity of a pipeline is compromised. For example, a rupture causing the instantaneous tearing or fracturing of the pipeline material would immediately impair the operation of the pipeline. A leak from an opening, crack or hole in a pipeline may cause some product to be released, but not immediately impair the operation of the pipeline.
Crude oil reserves known to exist and that are recoverable under current technological and economic conditions.
An estimate of the amount of crude oil located in a specific region. Reserves must be accessible with current technology.
The owner’s share of production or revenues retained by government or freehold mineral rights holders. In natural gas operations, the royalty is usually based on a percentage of the total production.
Saline Groundwater (Brackish)
Deep groundwater that is high in dissolved salt and unsuitable for domestic or agricultural uses.
A compacted sedimentary rock composed mainly of quartz or feldspar; a common rock in which oil, natural gas and/or water accumulate.
The extraction of additional crude oil, natural gas and related substances from reservoirs through pressure maintenance techniques such as waterflooding and gas injection. Pressure is the key to collecting oil from the natural underground rock formations in which it forms. Secondary oil recovery is employed when the pressure inside the well drops to levels that make primary recovery no longer viable.
A geographical area, such as the Western Canadian Sedimentary Basin, in which much of the rock is sedimentary (deposits of sediment that solidify in layers) and therefore likely to contain hydrocarbons.
A low impact, non-invasive method of gathering information about the location and characteristics of geological structures beneath the earth’s surface.
Rock formed from clay. Shale is frequently a “tight” type of rock, having small or widely spaced pores that trap oil or natural gas.
Natural gas that is found with crude oil in underground reservoirs. When the oil comes to the surface, the gas expands and comes out of the solution.
Natural gas at the wellhead may contain hydrogen sulphide (H2S), a toxic compound. Natural gas that contains more than one per cent of H2S is called sour gas. About 30 per cent of Canada’s total natural gas production is sour, most of it found in Alberta and northeast British Columbia.
Spills include accidental release of crude oil, produced water or other hydrocarbon products from well sites, batteries or storage tanks. These spills can affect land, vegetation, bodies of water (e.g. rivers), and groundwater.
Industry activities often affect surrounding areas and populations. People with an interest in these activities are considered stakeholders. They may include nearby landowners, municipalities, Indigenous communities, recreational land users, other industries, environmental groups, governments and regulators.
An improved recovery technique in which steam is injected into a reservoir to reduce the viscosity (“thickness”) of the crude oil.
Steam-Assisted Gravity Drainage (SAGD)
A recovery technique for extraction of heavy oil or bitumen that involves drilling a pair of horizontal wells one above the other; one well is used for steam injection and the other for production.
A yellow mineral extracted from petroleum for making fertilizers, pharmaceuticals and other products.
A major component of a group of airborne contaminants termed “acidifying emissions.”
Sour gas is processed at recovery plants to extract sulphur for sale to fertilizer manufacturers and other industries in Canada and overseas. The average rate of sulphur recovery at Alberta’s sulphur recovery plants has improved from 97.5 per cent in 1980 to 98.8 per cent in 2000.
Water from rain, snowmelt, or other sources, that flows over the land surface, and is a major component of the water cycle.
Water collected on the ground or in a stream, river, lake, sea or ocean.
A well that is not currently producing oil or gas but has been safely secured and may produce in the future.
Sweet Oil and Gas
Petroleum containing little or no hydrogen sulphide.
Synthetic Crude Oil
A mixture of hydrocarbons, similar to crude oil, derived by upgrading bitumen from oil sands.
An inaccurate term for oil sands, which are a type of petroleum deposit containing a naturally occurring mixture of sand, clay, and water, soaked with a form of petroleum called bitumen.
Oil Sands or Tar Sands
The hydrocarbon mixtures found in northern Alberta have historically been referred to as tar, pitch or asphalt. However, ‘oil sands’ is now used most often to describe the naturally occurring bitumen deposits. This helps distinguish it from the other terms, which are associated with distilled or man-made products, such as the mixtures used to pave roads. Oil sands is an accurate term because bitumen, a heavy petroleum product is mixed with the sand. It makes sense to describe the resource as oil sands because oil is what is finally derived from the bitumen.” Source: oilsands.alberta.ca
Tax depreciation is the depreciation that can be listed as an expense on a tax return for a given reporting period under the applicable tax laws. Canadian tax law allows the company to deduct part of an assets cost (for example, equipment) from its pre-tax cash flow every year. Assets are considered an expense because they require money to operate and will eventually require replacement. Claiming the cost of using assets each year as an expense reduces the amount of taxable income reported.
The third major phase of crude oil recovery that involves using more sophisticated techniques, such as steam flooding or injection of chemicals, to increase recovery.
Gas with very low flow rates. Found in sedimentary layers of rock that are cemented together so tightly that it “greatly hinders” the extraction. Getting tight gas out usually requires enhanced technology like “hydraulic fracturing” where fluid is pumped into the ground to make it more permeable. The National Energy Board estimates Canada has 300 trillion cubic feet (tcf) of tight gas in place.
A mass of porous, permeable rock – sealed on top and both sides by non-porous, impermeable rock – that halts the migration of oil and gas, causing them to accumulate.
An estimate of recoverable reserves that will have been produced by the time all exploration and development activity is completed; includes production-to-date, remaining reserves, development of existing pools and new discoveries.
Undiscovered Recoverable Resources
Those resources estimated to be recoverable from accumulations believed to exist based on geological and geophysical evidence but not yet verified by drilling, testing or production.
The ground is excavated to create a dugout to store fresh water.
The process of converting heavy oil or bitumen into synthetic crude oil.
The companies that explore for, develop and produce Canada’s petroleum resources are known as the upstream sector of the petroleum industry. Also known as “E & P” –exploration and production.
An exploration technique of “thumping” the ground with vibrator vehicles to produce seismic shock waves under the earth’s surface. The shaking gets translated into seismic data to provide insights into the subsurface for oil, gas and resource exploration.
The resistance to flow, or “thickness” of a fluid. Honey, for example, has a greater viscosity than water.
Volatile Organic Compounds (VOCs)
Gases and vapours, such as benzene, released by petroleum refineries, petrochemical plants, plastics manufacturing and the distribution and use of gasoline; VOCs include carcinogens and chemicals that react with sunlight and nitrogen oxides to form ground-level ozone, a component of smog.
A hole drilled or bored into the earth, usually cased with metal pipe, for the production of gas or oil.
The full oil lifecycle from production (wells) to the use of the fuel in a vehicle (wheels). Wells-to-wheels analysis can be used to assess total life cycle greenhouse gas emissions from production to combustion of different crude oils.
West Texas Intermediate
Produced in the United States, WTI is a light sweet crude oil that serves a benchmark grade for global oil pricing.
Western Canada Select
A blend of crude and / or synthetic crude oils shipped from the Western Canada Sedimentary Basin.
An exploration well drilled in an area where no oil or natural gas production exists.