Oil & Gas Terminology

From consumers to producers, energy continues to be a leading topic of conversation globally. And one segment of the energy industry, Oil & Gas (O&G), offers members of the DealStream community a variety of opportunities ranging from investing in oil fields and wells to drilling projects and fuels.

The following primer will help you with even the most basic of “Basin Talk” (lingo used to describe drilling locations based on the formation they’re part of). 

Oh, and whatever you say, don’t call it an “oil rig,“ as that annoys most O&G people. Referring to it as a “drilling” or a “workover rig” will make you sound like one of the family. This is just one example of the subtle nuances you might encounter. 

Let’s introduce you to a few basic O&G terms that every “Ginzel” (a rookie with no oilfield experience whatsoever) must know based on the three main stages of oil and gas production: “upstream,” ”midstream,” and “downstream.”

(The following definitions have been curated and modified from Wikipedia articles, as well as the glossaries found at  Schlumberger and  ConocoPhillips.)

Upstream: Exploration activities including the creation of geological surveys and obtaining land rights, and production activities, which include onshore and offshore drilling.

Midstream: Covers transportation, storage, and trading of crude oil, natural gas, and refined products. 

Downstream: Everything associated with refining – taking crude oil and transforming it into petroleum products – and various aspects of marketing.

Some companies might also be considered "Integrated oil and gas companies," which explore, produce, refine, and distribute oil and gas products as opposed to upstream or downstream companies that specialize in only one area.

These basic terms are your roadmap for the O&G marketplace, so you know where you are in this wide-ranging industry. But, if you want to be ready for a chat with a petroleum engineer or geologist someday, here are some more words to add to your vocabulary:

Barrel: A barrel of oil is equal to 42 U.S. gallons.

Big Bear: A hitch (known as time working on an oil rig) that lasts a minimum of 50 straight days.

BOPD: Barrels of oil produced per day.

Blowout: Sudden, uncontrolled release of underground pressure from a well.

Casing: A steel pipe cemented into position, used to line a wellbore.

Christmas Tree: An assembly of valves and fittings that regulates the flow from an oil well

Condensate: Liquid hydrocarbons, also referred to as natural gasoline and distillate.

Crude Oil: Oil in its raw state.

Derrick: A tapering tower, usually of open steel framework, used in the drilling of oil and gas wells.

Elephant: An oil field with more than 100 million recoverable barrels of oil.

Frac job: Slang for "hydraulic fracturing," a process of stimulating an oil or gas well by pumping special fluids into the reservoir, fracturing the formation.

Gusher: When pressure builds, causing oil to flow from the wellhead into the air.

G&P: Gathering and Processing

Hydrocarbons: A naturally occurring organic compound of hydrogen and carbon, which can occur as gases, liquids, or solids. Examples include methane, propane, butane, coal, bitumen, and asphalt.

HPU: Hydraulic Power Unit. 

Kill: To stop a well from flowing.

LNG: Liquefied Natural Gas - mainly methane and ethane, liquefied at an extremely low temperature and a pressure near atmospheric pressure. 

Play: Oil fields grouped in the same area and controlled by the same geological circumstances.

Petroleum: The word petroleum means 'rock oil .' Oil and petroleum are interchangeable terms. 

Platform: The entire offshore rig structure, which includes the drilling, extraction, storage, and some processing.  

Producing Well: A well actively producing fluids (gas, oil, or water).

Refinery: The location where the crude oil is processed into products such as petrol, diesel, petroleum naphtha, asphalt base, LNG, and jet fuel. 

Swab: To reduce pressure in a wellbore by relocating pipe, tools, or rubber-cupped seals. Sufficient reduction of pressure results in fluids flowing into the wellbore and towards the surface. This term can also describe how the flow of reservoir hydrocarbons is initiated in some completed wells.

Wellbore: The drilled hole or borehole, including the open hole or uncased portion of the well. 

Wellhead: A component located at the surface of an oil or gas well that provides structure and pressure control for drilling and production equipment.

Wells drilled: the number of total holes in the ground.

Working interest: A term referring to the percentage of ownership in an oil and gas lease, granting the right to explore, drill and produce oil and gas from the property. Working interest owners must pay royalties to the primary landowner. After paying royalties, the working interest owner shares production revenues with other working interest owners based on the percentage of interest owned.

Thanks to this list, and other resources, you'll advance from being a *"worm" to a *"finger" to a real *"hand" in the oil field. Some kids today might call speaking this way real "dope," but you'll never catch those of us in the oil world calling it that unless, of course, we're talking about a kind of thick lubricant used on pipe connections.

If you'd like further reading, there's a wealth to be found in crucial reference books, including  The Global Oil and Gas Industry: Management, Strategy & Finance by Andrew C. Inkpen & Michael H. Moffett, and the Historical Dictionary of the Petroleum Industry by Marius S. Vassiliou.

Even though Oil & Gas production is a complicated business, starting a conversation is the first step toward evaluating whether this is the right opportunity for you. 

*Worm: The least experienced oilfield worker on a team.

*Finger: A person who has been in the field long enough to no longer be a worm but is not yet able to be considered a “hand.” 

*Hand: The most experienced in the field.  

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