Oil & Gas Industry Overview

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Overview Crude Oil and Natural Gas: From Source to Final Products Chemistry of Hydrocarbons Origins of Crude Oil and Natural Gas Petroleum Migration and Accumulation Petroleum Reservoirs Separation and Treatment of Produced Oil and Gas Gas Handling and Processing Crude Oil Refining Petrochemicals Measurement Units and Conversion Factors Crude Oil Measurement Oil Quality: API Gravity Natural Gas Measurement Gas Liquids and Petroleum Product Measurement Energy Content and Equivalency Thermal Energy Equivalency: Hydrocarbon Price Equivalency: Conversion Table and Electronic Calculator Oil and Gas Value Chain Upstream Sector Negotiation of Upstream Agreements Exploration Field Development Long-term Production Wholesale Hydrocarbon Markets Midstream Sector Crude Transportation Refining of Crude Oil Midstream Natural Gas Value Chain Gas Processing Natural Gas Pipeline Transportation and Storage Downstream Sector Downstream Natural Gas Value Chain Main Global Players in the International Petroleum Industry OPEC Vertically Integrated Global Companies World Primary Energy Markets and the Role of Hydrocarbons Energy Supply and Demand Fundamentals Energy Demand

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Energy Supply Crude Oil Supply, Demand and Cross-border Trade Natural Gas Reserves Natural Gas Supply, Demand and Cross-border Trade Natural Gas Prices Emerging Commodity Price Final Thoughts Important Oil and Gas Statistical References Websites of Importance Acknowledgments

Upstream Oil & Gas Agreements

Overview Historical Perspective Methods for Obtaining a Host Government Agreement Four Types of Exploration Agreements The Concession Agreement

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US Offshore License Agreement West Africa Concession Agreement Additional Oil Entitlement Participation of National Oil Company: Working Interest Options Training Commitment and Other Forms of Sustainable Development The Production Sharing Contract Fiscal Terms Risk Service Agreements Natural Gas Discoveries: Post-Discovery Negotiations

Joint Operating Agreements Nicola Case Study Agreement Stages Costs During Exploration Work Program and Relinquishment of Blocks Field Production and Development Costs Concession Agreement Summary Glossary of Terms Model Form for International Joint Operating Agreement

Petroleum Geology & the Exploration Process

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Overview Fundamentals of Petroleum Geology Building of Sedimentary Basins Sedimentary Environments Sedimentary Rock Properties: Porosity and Permeability Formation of Crude Oil and Natural Gas Petroleum Migration and Accumulation Petroleum Reservoirs and Reservoir Traps Reservoir Seals Summary The Exploration Process Broad Surveying Techniques Existing Well Data Geophysical Surveying and the Seismic Reflection Method Conducting a 2D Seismic Survey Seismic Survey of the Pam Basin 3D and 4D Seismic Surveys Economics of the Pam Basin Prospect Summary References

Drilling & Well Completions

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Overview Drilling Objectives Surface and Subsurface Environments Rig Counts Drilling Technology Phases of Well Construction Well Planning Initial Steps Authorization for Expenditure (AFE) Environmental and Regulatory Considerations Support and Logistics Drilling Rig Procurement Drilling Contracts Well Design Subsurface Pressure and Temperature Hole Sections Well Trajectory

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Deviation Control Directional Drilling Horizontal Drilling Geosteering Multilateral Wells Rig Systems and Equipment Hoisting and Rotating Systems Circulating System Well Control System Power Generation and Transmission System Types of Drilling Rigs Onshore (Land) Rigs Offshore Rigs Subsurface Drilling Equipment Drill String Components Drill Bits Drilling Procedures Drilling Problems Remote Monitoring and Operations Support

Drilling Operations

Formation Evaluation and Testing Well Completion Completion Design

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Well Stimulation Production Tubing Wellhead and Surface Flow Control Equipment Summary References Additional Resources Acknowledgments

Oilfield Development

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Overview Stage One: Identification and Assessment of Opportunities Obtaining Company Approval to Negotiate the Host Country Agreement Nicola Case Study Opportunity

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Opportunity Fundamentals Nicola Prospecting License Activity Estimating Prospective Resources Estimating Exploration and Field Development Economics The Nicola Exploration Program Adding a Joint Venture Partner (Farm-in)

Stage Two: Analyze Alternative Development Options The Preliminary Subsurface Plan and Optimization Studies Building the Static Reservoir Model Dynamic Reservoir Performance Pressure Maintenance Enhanced Oil Recovery Methods (EOR) Artificial Lift Reservoir Drive Mechanism for the Nicola Discovery Type Wells and Stimulation Process Well Type and Stimulation Method for the Nicola Discovery Surface Facilities Conceptual Plan for the Nicola Discovery Project Economics for the Nicola Discovery Approval of Partners and the Ministry of Energy Stage Three: Optimizing the Preferred Development Plan Subsurface Lockdown for the Nicola Discovery Finalizing Well Count and Wellhead Locations Intelligent Well Completions Surface Facilities Development Plan and FEED for the Nicola Discovery Subsea Flow Equipment and Control Flexible Risers and Umbilicals FPSO and Crude Transfer Facilities Crude Offloading System Topsides Front-End Engineering Design (FEED) FEED for the Nicola Discovery Final Investment Decision (FID) Stage Four: Execution of the Field Development Project Management Requirements Construction of Nicola Facilities Drilling and Completion of Development Wells

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Construction of the FPSO Construction and Assembly of the Topsides Subsea Trees and Control Equipment Subsea Pipelines and Risers Progress Monitoring and Reporting Recruitment, Assignment, and Training of Operational Personnel Hook-up and Commissioning Finalizing Crude Marketing Plans Management of Production Management of Reservoir and Well Performance Management of Crude Production Management of Stakeholder Relations Develop a Nicola Workforce Develop and Maintain a Culture of Safety and Environmental Awareness Measure and Report Performance to Stakeholders Achieving the Vision

Stage Five: Manage Field Performance over Its Life Cycle

References

Upstream Gas: From Exploration to Wholesale Markets

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Overview Basic Gas and Gas Liquid Properties and Terminology Gas and gas liquids composition and properties Definition of industry terms: LNG, LPG, NGLs, CNG Gas Industry Value Chain with Emphasis on the Upstream Sector Upstream Petroleum Project Management Stages and Workflow Background on two gas exploration prospects Location Landowner or Host Country Exploration Agreements Technical Support for the Prospect Potential Gas Markets

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Demand, Timing, Sale Point, Prices and Contract Terms Project Planning and Economics Exploration and Field Development Plan and Schedule Reserves, Production, Rates, CAPEX, OPEX, IRR Permits and Authorizations Required. HSE Issues Risk Analysis:Exploration, Development, Production, Market, Government Partner Issues Gas Exploration Basics Exploration Plan: Costs and Schedule Exploration well plan, evaluation and expected costs Results of Exploration Review of Reserves Wholesale Gas Markets and Project Market Options Project Economics Authorization to Move to Next Stage Review of Alternative Subsurface Development Plans Optimization of Subsurface Development Plan Preparing Surface Facilities Plan Environmental and Social Impact Report Sources of Project Capital: Debt and Equity Project Partner Agreements Finalizing Gas Sales Contract Obtaining Government and Other Permits Project Management Plans Authorization to Move to Development

Exploration of gas prospects

Planning Gas Field Development

Development of New Discoveries Implementing the Development Plan

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Project Management Issues: Scope, Schedule, Cost, Quality, Communications, Risks and Procurement Engineering, Procurement and Construction Agreement Final Costs and Timing Managing the Production Cycle Managing the Field Production Life Cycle Operations and Maintenance of Facilities Monitoring Well and Reservoir Performance Adding Wells and Compression Reservoir Management Managing Sales and Customer Relations Financial and Partner Reporting Summary of the Outcome of the Two Prospects Summary of Case Studies and Drivers of Upstream Gas Success References

Marketing & Trading of Crude Oil

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Overview Changing Nature of the Crude Oil Market Control of the Market by the "Majors" Shared Control The Opec Transition

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Price Shock of 1973 World Recession Nationalization, Market Transformation and New Discoveries Price Shock of 1979 Falling Demand Market-Related Crude Pricing Advent of Spot Markets

Crude Oil Pricing Today Marker Crudes Crude Oil Assay Price Reporting Pricing of Other Crudes Use of the Futures Markets for Price Formation The Role of OPEC in Price Formation Fundamentals of a Physical Crude Oil Contract Seller / Buyer Relationship Title Transfer Arrangements / Point of Sale Other Contract Terms Typical Price Setting Negotiation of Physical Contracts Stages in the Negotiation of a Crude Contract Contract Examples Colombia Crude Sale to Unspecified End User Sale of Crude to a Refiner in the Caribbean Nigerian Crude Sale to Trader Forward and Future Contracts Crude Contracts Offered by Financial Exchanges How a Futures Contract Works General Features of the Oil Futures Market Use of Derivatives in Price Risk Management Hedges: Buy or Sell Crude Oil SWAPS: Convert Variable Price to a Fixed Price Options: Setting a Floor or Ceiling Price Typical Players In The Petroleum Derivatives Markets

Fundamentals of Financial Derivatives

Trading of Crude Oil: Using Both Physical and Financial Contracts Summary References Exhibits

Crude Oil Transportation & Storage

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Overview Crude Oil Pipelines System Components Examples of International Pipelines Phases of Pipeline Development

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Pipeline Operations Pipeline Tariffs Batching Pipeline Maintenance Pigging Pipeline Inspection Corrosion Prevention Pipeline Safety

Crude Oil Storage Temporary Storage of Crude Oil Strategic Storage of Crude Oil Nicola Case study: Pipeline and Storage Decisions Oil Tankers Tanker Sizes Tanker Classifications Trade Routes Chokepoints Demand and Supply Development of the World Tanker Trade Ownership and Hiring of Tankers Tanker Rates Worldscale Calculation Tanker Safety Nicola case study: Shipping Decision Other Forms of Crude Oil Transportation References Acknowledgments

Midstream Gas: Gas Processing, Transportation & Load Balancing

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Overview Gas Processing Gas Processing Terminology Properties of Natural Gas & Natural Gas Liquids Surface Facilities Key Products of Natural Gas Processing

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Ethane Propane Iso-Butane Normal Butane Natural Gasoline Gas Processing Options Gas Processing Systems Markets for Gas Liquids Global Supply and Demand

Natural Gas Pipelines Gas Pipeline History and Milestones Global Pipeline Infrastructure North America South America Europe Former Soviet Union Asia Australia Pipeline Design Wall Thickness Composite Reinforcement Capacity vs. Diameter Capacity vs. Operating Capacity Transmission System Design Pipeline Economics Development Process Onshore Offshore Pipeline Tariff Structure Regulated Market Deregulated Market History of the United States History of the United Kingdom LNG Value Chain

Liquified Natural Gas

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LNG History and Milestones LNG Process Liquifaction LNG Trains Transporation Regasification LNG Economics LNG Markets & Trade Load Balancing & Underground Gas Storage Load Balancing Applications Load Duration Curve Winter Flow Pattern Underground Storage Options Underground Storage Capacity & Trends Thomas Corners Gas Storage Case Study Surface Storage Options LNG Peakshaving Interruptible Customers Pore Storage Withdrawal Summary References

Refining & Product Specifications

Overview Crude Oil Characteristics Crude Oil Chemistry

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Paraffins (Alkanes) Olefins and Aromatics Naphthenes Heating Value of Hydrocarbons Boiling Points of Hydrocarbons Volume Changes during Refining Crude Quality: API Gravity and Sulfur Content API Gravity Sulfur Content Marker Crudes and Pricing Benchmarks Crude Quality: Yield of Petroleum Fractions

The Refining Process Crude Yields and Product Demand Functions of a Refinery Hydroskimming Refinery Cracking Refinery Deep Conversion Coking Refinery Refinery Complexity Non-Refined Petroleum Supply/Blend Streams Ethanol Bio-Diesel Gas-to-Liquids Cost of Crude Oil and Value of Petroleum Products Impact of Refining Complexity on Refining Margins Impact of Refining Capacity on Refining Margins Refinery Case Study: Addition 100,000 b/d Delayed Coker Future Trends Health, Safety and Environmental Considerations Health and Safety Environment Summary References

Refining Economics

Marketing & Distribution of Petroleum Products

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Overview Petroleum Products and Services Fuels for Transportation and Heating Gasoline and Diesel

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Composition Performance Characteristics Kerosene (Aviation) Fuel Oils (Marine) Heating Fuels Liquefied Petroleum Gases (LPGs) Developments in Fuels, Bio-Fuels and Fuel Cells Non-fuel Specialty Products and Streams Lubricants and Greases Engine Lubricants Transmission Lubricants Industrial Oils Greases Bitumens Chemicals and Solvents Other Products

The Marketplace for Petroleum Products Retail Customers Commercial Customers Basics of Marketing Petroleum Products Marketing Segmentation and Customer Focus Retail Sector Commercial Sector Mobil Case Study Synopsis Worldwide Demand and Pricing for Petroleum Products Products Markets in Europe Product Markets in North America Products Markets in Asia Pacific Manufacturing of Petroleum Products Product Transportation, Storage and Distribution Importing Products Using Product Carriers Intermediate Bulk Storage Regional Transportation, Additives and Branding

The Downstream Value Chain: From Refinery to Final Sale

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Product Pipelines Barges Rail Transportation Truck Transportation Market Outlets:Wholesale, Commercial and Retail Downstream Petroleum Examples Spain and New England CLH Distribution System Globals Value Chain Product Market Complexity and Competition Petroleum Distribution Costs and Margins Profit Margins at the Retail Service Station The Modern Gasoline Station

Pricing Along the Downstream Value Chain

Health, Safety and Environmental Considerations Summary References

Downstream Gas: Gas Distribution, Marketing & Trading

Overview Gas Distribution LDC Distribution System

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Regulation Deregulation LDC Supply System Model Distribution Operations Gas Service Functions Technologies in Gas Distribution LNG Receiving & Vaporization Facility LNG Truck Local LNG Storage Identification of Markets Major Classes of Gas Markets Assessing Market Demand Sources of Market Information Gas Supply Economics Natural Gas Pricing Direct Markets Power Generation Industrial Retail Markets Residential Commercial Vehicle Fuel Petrochemicals Power Generation Industrial Regulation Deregulation Convergence "Open Access" Henry Hub Gas Daily Index Basic Deal Types Physical Gas and Measure Exposure Hedging Fixed-Price Risk

Gas Distribution Markets

Gas Trading

Hedging Basis Risk Exchange and OTC Trading

Summary References

Overview of Petrochemicals

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Overview: What are Petrochemicals? Characteristics of the Petrochemical Industry Global Nature of the Industry Common Specifications for most Products Readily Available Technology Large Scale, Capital Intensive Key to Success The Seven Basic Petrochemical Building Blocks Product Families and End-Uses Methane

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Ammonia Methanol Gas-to-Liquids (GTL) Olefins Ethylene Propylene Butadiene The Aromatics Benzene Toluene Xylenes Components of Capital Investment Owners Project Costs Total Fixed Investment Components of Production Costs Variable costs Fixed Costs Cash Cost of Production Depreciation Total Cost of Production Return on Capital Investment Required Plant Gate Price Economics of a Mega-Methanol Project Why Invest in Petrochemical? Price Setting Mechanisms Demand Limited Scenario Production Limited Scenario Major Industry Issues

Petrochemical Plant Economics

Profitability Cycles

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Feedstock Costs Globalization and International Competitiveness Environmental Regulations

Case Studies and Project Decriptions References Books Associations Selected Petrochemical Consulting Companies Selected Internet Sites with Petrochemical Industry Information