Top 80 Terminologies in oil & gas industry – Glossary

The oil and gas industry is the bedrock of global energy infrastructure, powering economies and driving industrial progress. It is a sector defined by specialized processes and advanced technologies. To fully grasp its complexities, you must be fluent in its distinctive terminology. This comprehensive list will explore the most commonly used terminologies in the oil and gas industry, providing a comprehensive overview for beginners and a refresher for seasoned professionals to navigate this dynamic field.

Top 81 Terminology in Oil and Gas Industry 

Here are several key terms categorized, defined and explained to simplify your understanding of this vital sector.

Upstream Sector 

The upstream sector of the oil and gas industry encompasses all activities related to the exploration and extraction of raw hydrocarbons—crude oil and natural gas—from subsurface reservoirs. This sector is the initial phase of the industry’s operations, focusing on locating, accessing and producing these valuable resources.

Exploration

It is the process of searching for probable reserves of hydrocarbons and involves various techniques to identify and assess geological formations that may contain oil and naturally occurring gas.

1. Seismic exploration 

This involves using sound waves to create subsurface images that reveal potential oil or gas reservoir structures. It provides detailed geological mapping to identify potential drilling locations where the gas reservoir lies.

2. Well logging

This involves recording geological properties within a drilled wellbore to analyze rock formations and fluid content. Well logging produces vital data on formation characteristics, aiding in reservoir evaluation.

3. Prospect evaluation

This involves analyzing geological and geophysical data to assess the potential economic viability of a discovered hydrocarbon prospect. Prospect evaluation determines if a hydrocarbon discovery warrants further development and investment.

Development

Development involves the planning and executing activities required to access, extract and produce hydrocarbons from a discovered reservoir.

4. Reservoir engineering

This involves studying reservoir characteristics to optimize hydrocarbon recovery and maximize production efficiency. Reservoir engineering utilizes advanced modeling to predict and enhance reservoir performance.

5. Drilling

This is the process of creating wellbores to access subsurface hydrocarbon reservoirs. Drilling operations involve sophisticated techniques to penetrate and access target formations.

6. Completion

This involves preparing a drilled well for production by installing equipment and systems to control and regulate hydrocarbon flow. Completion activities ensure the safe and efficient flow of hydrocarbons from the wellbore.

Production

Production is where hydrocarbons are extracted from the reservoir and prepared for transportation and refining.

7. Artificial lift

This involves techniques for enhancing hydrocarbon flow from oil and gas wells with insufficient natural reservoir pressure. Artificial lift systems are deployed to maintain production rates in declining wells.

8. Wellhead

The wellhead is the surface equipment at the top of oil and gas wells that controls and monitors hydrocarbon flow. It is the interface between the subsurface reservoir and surface production facilities.

9. Flow assurance

Flow assurance is ensuring the uninterrupted flow to produce hydrocarbons by preventing issues like hydrate formation and wax deposition. Flow assurance strategies are critical for maintaining continuous and efficient production.

10. Separation and processing

This involves removing impurities and separating crude oil, liquid petroleum and natural gas into marketable products. Separation and processing facilities prepare hydrocarbons for transportation and refining.

Midstream Sector 

The midstream sector involves transporting and storing raw materials, primarily oil and natural gas, from their extraction points to processing facilities and, ultimately, end-users. This sector is characterized by its logistical complexity and requires extensive infrastructure and sophisticated management to ensure the efficient and secure movement of hydrocarbons.

Transportation 

Transportation within the midstream sector is the physical movement of oil and natural gas from production sites to processing plants and storage facilities.

11. Pipelines

Extensive networks of underground pipes are the most efficient and cost-effective method for transporting large volumes of oil and gas over long distances.

12. Tankers

Large vessels designed to transport oil and liquefied natural gas (LNG) across oceans and waterways, connecting global markets.

13. Trucks

These are used for transporting smaller volumes of oil and gas, particularly in areas with limited pipeline infrastructure or for short-haul deliveries.

Storage 

Storage in the midstream sector involves holding oil and natural gas in various forms to ensure a stable supply and meet fluctuating demand.

14. Storage tanks

These above-ground or underground containers are used to store oil and refined products, providing buffer capacity and ensuring continuous supply.

15. Caverns

These are underground geological formations, such as salt caverns, used for large-scale natural gas storage, offering significant capacity and security.

16. Liquefied natural gas (LNG)

LNG is the natural gas cooled to a liquid state for efficient transportation and storage, enabling access to remote markets and facilitating international trade.

Downstream Sector 

The oil and gas industry’s downstream sector encompasses refining, processing, and distributing crude oil into finished products. This includes transforming raw crude into natural gasoline, diesel, jet fuel and other consumer-ready products.

Refining 

Refining is the complex process of transforming oil into usable petroleum products.

17. Distillation

This initial step involves heating crude oil to separate it into different components based on their boiling points. Lighter components like natural gasoline, vaporize first, while heavier elements, like asphalt, remain.

18. Cracking

This process breaks down heavier hydrocarbon molecules into lighter ones, increasing the yield of valuable products like gasoline and diesel. It can be done thermally or catalytically.

19. Reforming

This process rearranges hydrocarbon molecules to improve gasoline’s quality and octane rating, enhancing its combustion properties.

20. Alkylation

This process combines light olefins with isobutane to produce high-octane gasoline components, improving fuel efficiency and reducing emissions.

Petrochemicals 

Petrochemicals are chemical compounds derived from oil and natural gas, serving as essential building blocks for many products.

21. Ethylene

A fundamental petrochemical used to produce plastics, fibers, and various other chemical products.

22. Propylene

A key ingredient in producing plastics, resins, and synthetic fibers.

23. Butadiene

A crucial component in the manufacturing of synthetic rubber and elastomers.

24. Benzene

An aromatic hydrocarbon is used to produce various chemicals, plastics, and synthetic materials.

Marketing and Distribution 

This involves selling and delivering refined petroleum products to consumers and businesses.

25. Retail stations

Facilities that sell gasoline and other petroleum products directly to consumers.

26. Wholesale marketing

The bulk sale of petroleum products to businesses, industries, and other distributors.

27. Pipelines

Underground or aboveground networks used to transport oil and refined products over long distances.

Other Important Terminology

Here are some additional key terms used throughout the oil and gas industry.

28. Reservoir 

A subsurface rock formation containing accumulations of hydrocarbons that can be extracted.

29. Hydrocarbons 

These organic compounds are composed of only hydrogen and carbon elements, found in crude oil and natural gas, which are the primary source of energy used to produce fuels like gasoline, diesel, propane and kerosene.

30. API gravity 

A measure of how heavy or light a petroleum liquid is compared to water. Higher values indicate lighter oils.

31. BTU (British thermal unit) 

BTU (British Thermal Unit) is a standard unit of energy used to measure the heat content of fuels like natural gas.

32. Miscible flood 

An enhanced oil recovery technique where a fluid is injected to mix with and mobilize trapped oil.

33. Waterflood 

A secondary recovery method where water is injected into a reservoir to increase pressure and displace oil.

34. Enhanced oil recovery (EOR) 

This refers to the various artificial drive mechanisms and hydrocarbon stimulation techniques that are employed to increase the amount of oil recovered from a reservoir.

35. Fracking (hydraulic fracturing) 

It is a technique for extracting natural gas and oil from deep underground rock formations. A high-pressure mixture of water, sand and chemicals is injected into a well, creating cracks in the rock and allowing the trapped hydrocarbons to flow more freely to the surface.

36. Shale oil 

This is the crude oil contained within shale rock formations extracted through hydraulic fracturing.

37. Tight oil 

Light crude oil trapped in low-permeability rock formations, requiring advanced extraction techniques.

38. Natural gas liquids (NGLs) 

Hydrocarbon components of natural gas that are separated as liquids, such as propane and butane.

39. Liquefied Petroleum Gas (LPG) 

Liquefied Petroleum Gas (LPG) is a mixture of hydrocarbon gases, primarily propane and butane, that are liquefied under pressure.

40. Condensate 

It is the heavier liquid hydrocarbon mixture that condenses out of crude petroleum hydrocarbons that exist in a gaseous state in the underground reservoir during production.

41. Off-shore drilling 

Drilling operations conducted in marine environments to extract oil and gas from beneath the seabed.

42. Drilling Rig

Drilling rig is a large, complex structure that houses all the necessary equipment for the drilling crew to use for drilling a hole deep into the earth and extract oil or natural gas. It can be either onshore or offshore.

43. Floating Drilling Rig

It is a mobile offshore drilling unit that floats on water instead of touching the ocean floor. They are used to drill for oil and gas in the ocean

44. Platform 

A large, fixed structure used for offshore drilling and production operations.

45. Downhole 

Refers to the equipment and operations within a wellbore.

46. Wellbore

The hole drilled into the earth to access and extract hydrocarbon resources like oil and gas.

47. Permeability

The ability of a rock to allow fluids to flow through its interconnected pore spaces.

48. Porosity

The volume of pore spaces within a rock, indicating its capacity to hold fluids.

49. Reserve 

Estimated quantities of oil and gas that are recoverable under current economic and operating conditions.

50. Resource 

The total amount of oil and gas present in a formation, including both recoverable and unrecoverable quantities.

51. OPEC (Organization of the Petroleum Exporting Countries) 

An intergovernmental organization of oil-exporting nations that coordinates and unifies petroleum policies.

52. BBL (Barrel) 

In the oil and gas industry, “BBL” stands for “barrel,” which is a unit of volume used to measure oil and other crude petroleum products, equivalent to 42 US gallons (approximately 159 liters). 

53. Casing

The Production casing is a long, sturdy steel pipe inserted into a newly drilled wellbore to provide structural support, prevent wellbore collapse, isolate different geological formations and protect freshwater zones. It acts as a protective lining within the oil and gas wells throughout the drilling and production processes.

54. Directional (Horizontal) Drilling

Directional drilling, also known as directional boring or horizontal drilling, is the practice of drilling for oil and gas reserves at an angle rather than vertically.

55. Drill Bit 

A drill bit, also known as a rock bit, is a tool used to drill holes in the earth to extract oil and natural gas. It rotates to cut, scrape and crush reservoir rock. 

56. Dry Hole 

Dry hole is an exploratory or development oil or gas well that has been drilled but does not produce a commercially viable amount of oil or gas.

57. Exploratory Hole 

It is a deep test hole drilled for probable reserves of oil and gas. Its primary purpose is to discover and confirm the presence of hydrocarbons in a location and determine whether a new reservoir exists before proceeding to extraction through development wells. 

58. American Petroleum Institute

Organizations like the American Petroleum Institute (API) have developed guidelines for well construction, fluid handling and waste management in the US to balance energy production with environmental stewardship. 

59. Heavy oil 

Heavy oil is a thick, hard-to-pump crude oil that is denser and has a higher viscosity than light crude oil.

60. Refinery 

It is a large industrial facility that processes oil (crude petroleum) into usable petroleum products such as gasoline, diesel, kerosene and asphalt. The crude oil is separated into different components and refined into the desired products through various chemical processes.

61. Reserves

It is the estimated quantity of oil and gas that is currently known to exist in a reservoir and can be commercially recovered using current technology and economic conditions.

62. Tight Gas 

It refers to natural gas trapped in reservoir rock formations with extremely low permeability. This means that the gas cannot easily flow through the rock and requires significant hydraulic fracturing (fracking) to extract it at economically viable rates. 

63. CO2 injection

The process of pumping carbon dioxide (CO2) into an existing oil reservoir to enhance oil recovery by displacing the trapped oil and pushing it toward production oil or gas wells.

64. Acidizing

It is a production-enhancing process in which a reactive acid, such as hydrochloric acid, is pumped into an oil-bearing rock under high pressure to dissolve the rock and enlarge its pores. This allows the oil to flow more freely into the wellbore.

65. Black Oil 

A type of crude oil that is considered a traditional, medium-weight oil, typically dark in color, with a moderate amount of dissolved gas.

66. Crude Oil 

A mixture of hydrocarbons that exists in a liquid state in natural underground reservoirs and that remains liquid at atmospheric pressure after passing through surface separating facilities.

67. Dry Gas

A type of natural gas that primarily consists of methane with very little to no heavier hydrocarbon components like ethane, propane or butane. This translates to dry gas producing minimal condensate when brought to the surface.

68. Associated Gas

Natural Gas produced from a reservoir in connection with the production of oil. Associated gas can manifest itself as either free gas or in a solution with water and/or oil.

69. Drill Pipe

A tubular steel pipe connecting the bottom hole assembly with the surface equipment on a drilling rig is used to rotate the drill bit and supply it with drilling mud. The drill pipe makes up the drill string with the bottom hole assembly.

70. Ethane

A gaseous hydrocarbon chain consisting of two carbon atoms. Ethane is often a component of unrefined natural gas and is considered to be dry gas.

71. Drilling Fluids / Drilling Mud

Drill mud drilling fluids are a mixture of mud and chemicals that are used in the process of drilling an oil or gas well. Drilling fluids assist in the removal of debris from the wellbore, prevent solids and liquids from entering the wellbore and cool the drill bit.

72. Oil Field

Oil field, generally called a field, is a reservoir containing oil or natural gas deposits. Hydrocarbons production takes place in oil fields.

73. Casinghead Gas

Casinghead gas is the natural gas produced with oil from a well that generally contains dissolved and/or Associated Gas.

74. Natural Gas Liquids (NGL)

Hydrocarbons are typically found in unrefined natural gas. They are liquid or condensable under specific temperatures and when natural pressure exceeds. Some NGLs (liquid hydrocarbons), such as propane, butane and pentane, are gaseous at standard temperature and natural pressure conditions but may become liquid during production or other operations.

75. Fracking Fluid 

Also known as Frac fluid, it is a mixture of water, proppant and chemical additives used in hydraulic fracturing to extend fractures, reduce friction and carry proppant into the target formation. The composition of the fracturing fluid will vary depending on the rock being fractured, the targeted resources (oil or gas) and the characteristics of the oil and gas well. 

76. Gas Injection Well

It is well used for injecting gas (natural gas or carbon dioxide) into a producing reservoir during gas lift operations and maintaining reservoir pressure.

77. Gas Lift 

It is a system that creates artificial lift by injecting gas to increase the bottom hole reservoir pressure. This helps to lift or drive the oil into the wellbore, increasing the oil produced from the well.

78. Gas oil ratio 

A ratio comparing the volumes of gas and oil that are either produced from or recoverable from a well.

79. Gone To Water 

It is a term used to describe an oil or gas well in which the produced water has increased. At the same time, the production of hydrocarbons has decreased, reducing the well’s profitability to the point that production is no longer economically desirable. 

80. Heavy Crude Oil 

It is the crude oil that has relatively fewer “light” components, such as gasoline, and relatively more “heavy” components, such as asphalt.

81. Injection Gas 

Natural gas that is injected through an injection well into an oil reservoir to increase the reservoir pressure and thereby increase produced oil.

82. Native Gas

Native gas is natural gas already present in the applicable formation that is being utilized for storage, as opposed to natural gas injected into the storage formation.

Conclusion

Mastering the oil and gas industry terminology is crucial to achieving success in this complex field. This glossary has served as a starting point, clarifying essential industry terms. 

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