Take-or-Pay Contract  Definition: Take-or-Pay Contract is one of the three most used LNG contracts type, see comments below. Take-or-Pay Contract are written agreements between a buyer and seller that obligate the buyer to pay regardless of whether or not the seller delivers the good or service. Generally, this obligation to pay does not involve the full amount due for the product, and protects the seller in the event that the buyer refuses to accept the good or service when delivery is attempted. The clause of the Take-or-Pay Contract which stipulates this obligation for the buyer to pay a compensation in the case he does not take the good or service is commonly called the killing clause. Comments There are three major pricing systems in the current LNG contracts: Oil indexed contract, the JCC Contracts, used primarily in Japan, Korea, Taiwan and China, Take-or-Pay Contracts based on a combination of oil products and other energies used primarily in Continental Europe; Market indexed contracts used in the USA and the UK.; In most of the Northeast Asia LNG contracts, price formula is indexed on a crude oil basket imported to Japan called the Japan Crude Cocktail (JCC). In the Continental Europe, the energy is produced out of multiple sources, so the LNG price formula indexation does not follow the same format as in Asia. LNG price varies from contract to contract. Brent crude price (B), heavy fuel oil price (HFO), light fuel oil price (LFO), gas oil price (GO), coal price, electricity price and of course natural gas price indexes are the indexation elements of price formulas. In addition to the different pricing reference in Europe from Asia or USA, the Take-or-Pay contracts used in Europe include the, so called, killing clause mostly due to the fact that the gas is distributed in Europe mainly through gas pipelines which do not give flexibility to re-route gas deliveries in case of buyer default. Historically the Take-or-Pay contract was mostly used in the sale of food commodities. A farmer may contract with a buyer to purchase an entire harvested crop during a given season. If the buyer for any reason decides to not purchase the entire crop, he or she will still owe the farmer some type of reduced payment. This ensures that the farmer does receive some compensation on the transaction, while still allowing the farmer to seek other buyers for the crop.
Technical Services Contract (TSC)  Definition Technical Service Contract, or TSC, refers to an oil and gas exploration and production contract awarded by a producing country to the International Oil Company (IOC) bidding with the lowest remuneration fees per barrel (RFB) produced as reward of its capital and operational expenditures. Comments Most of the exploration and production contracts in the world are based on concessions or production sharing contracts (PSCs). In the case of concessions, the producing countries and IOCs share revenues in a way or another depending on the form of the contract. With the PSCs, they share revenues and operating costs. In both cases, the IOCs must support all the capital expenditure and risks. The Technical Service Contract introduces a different approach where the IOCs must bear, as in the other contracts, all the capital expenditure and risks, but in addition all the operating costs only compensated by a Remuneration Fee per Barrel (RFB) All the revenues except this Remuneration Fee per Barrel (RFB) go back to the producing country. In addition this Remuneration Fee may be paid only if the production exceeds a minimum level. On the top end a targeted production level is also given to the IOC to reach after some years to make sure that the IOC will proceed to the necessary capital expenditure in due time. For the IOCs, the TSC means that all the profitability of the capital and operating expenditures required for the development of an oil and gas field is depending on the amount of this Remuneration Fee per Barrel (RFB). The TSCs were widely used in Iraq to award the exploration and production rights of the oil and gas fields in the south of Iraq to IOCs. The Iraq Government awarded these TSC per field in following a fierce bidding competition between all IOCs to offer the lowest RFB, meaning leaving the maximum profit to the Government. For the winning IOC the challenge is then to recover its total costs, capital expenditure plus operating costs, with the agreed RFB. In most of the cases, the TSC were signed with IOC promissing RFB around or even below $2 per barrel. Considering that these TSC are signed for a period of 20 or 25 years, the winning IOC must feel confident in technology and expertise to minimize its capital and operating expenditure while delivering the targeted oil and gas volume of production. In the example of the West Qurna 1 field awarded to ExxonMobil and Shell in November 2009 the key figures of the challenges must be summarized to: - $25 billion Capital expenditure - $25 billion Operating costs over the TSC duration period of 20 years - $1.9 Remuneration Fee per Barrel With such figures the TSC may only apply to giant oil fields able to provide large and sustainable volume of production in the best conditions so that the IOC can minimize risks and expenditure. For the producing country the TSC offers only advantages with additional bonus when oil price starts to fly above the $100 per barrel.
Tie-back  Definition: Tie-back in the offshore oil and gas upstream activities refer to the connection of additional risers to the floating vessel or platform. Comments Originally the offshore oil and gas industry used to focus on large fields that could be explored and produced in drilling strait below the floating vessel or the platform. But the high costs of the surface structure, a FPSO or FSO or FPO or any kind of platform limits this solution to large offshore fields. In addition most of these large fields are neighbored by multiple smaller fields, called marginal fields or pockets. These marginal fields may individually contain far too short reserves to justify the capital expenditure in heavy surface infrastructures but their aggregation may be significant enough to develop a sub-sea exploration plan. After drilling these marginal fields, and installing all the sub-sea equipment on the seabed, risers are installed to connect them to the floating vessel or platform. This connection of these risers to the vessels or platforms is called tie-back. Tie-back will also be used for all the equipment such as the risers and sub-sea connectors. A tie-back risers can be either a single large-diameter high pressure pipe, or a set of concentric pipes extending the casing strings in the well up to a surface BOP Physically this tie-back operation is made through the turret and the associated mooring systems. The first tie-backs were performed for marginal fields located at few kilometers distance from the main field, but today the risers reach several tens kilometers distance and in the near future hundreds kilometers distance may be expected. The North Sea and the Gulf of Mexico are the regions where the tie-back concept is widely expanded. Most of the giant fields of these offshore regions are maturing and depleting while the large infrastructures built for these fields are still available for decades of production. The tie-back system in association with the sub-sea risers technologies fits perfectly in these regions to explore, develop and put in production thousands of marginal fields which can balance the depleting fields and benefits from the available processing capacities on the floating vessels and platforms.
Tight oil  Definition: Tight oil refers to the light crude oil trapped in shale, limestone and sandstone formations characterized by very low porosity and permeability. Tight oil is normally a light crude oil found in the sedimentary formations that may also be called light tight oil (LTO) or tight shale oil or even shale oil. Comments But the term of tight oil is preferred to shale oil in order to avoid the confusion with oil shale. Tight oil or shale oil are different from oil shale. Oil shale are composed of solid hydrocarbon (kerogen), a decomposed organic matter still at solid state, in a sedimentary rock unit while tight oil is a light crude. Oil shale cannot be extracted using the same cost effective production techniques as tight light oil. Tight oil are classified as source rock (sedimentary rock with petroleum hydrocarbon production capacity). The term of \"tight\" finds its justification on the limited flow of tight oil from the rock to the well bore by the largely impermeable fine-grained nature of the oil-hosting rock. While some tight light oil plays produce oil directly from shale, most tight oil is produced from low-permeability siltstones, sandstones, limestones and dolostones that are associated with the shale. The oil trapped in these relatively impermeable rock units requires well stimulation techniques including horizontal drilling and hydraulic fracturing. They use the same horizontal drilling and hydraulic fracturing technologies used in shale gas development. Advanced hydraulic fracturing means recovering tight oil from shale plays is becoming more and more economical and companies are rushing to acquire and exploit acreage in the formations where this oil is contained. Since the shale gas over flooded the North American market with low-price shale gas, the spread with oil prices continuously increased leading the Oil and Gas Exploration and Production companies to focus on more lucrative liquid-rich shale plays including the Bakken, Niobrara and Eagle Ford in search of higher value tight oil deposits. Tight oil may also be foound in other parts of the world such as the R\'Mah play in Syria, Sargelu in the Persian Gulf, Athel in Oman, Bazhenov, Achimov in Russia, and Chicontepec in Mexico. In July 2012, the US agency Energy Information Administration (EIA) published a survey about the tight oil forecasting the USA production from tight oil should more double by 2035. In 2012 the production of tight oil will be around 720,000 b/d representing 12.5% of the US production. The EIA largest estimates of tight oil production boost volumes to 2.24 million b/d in 2020 and 2.8 million b/d in 2035.
TLP  Definition: TLP is the acronym of Tension Leg Platform. This name is used for offshore platform designed to have buoyancy in excess to be balanced in connecting the platform to the sea bed with long steel tubular structure called tendons. These tendons guaranty the stability of the platform in all dimensions regardless the waves and sea level. Comments: Because of it stability, the TLP design provides a lot of advantages as to install the wellheads on surface, operations stability therefore higher efficiency. They are also easier to tow than Semisubmersible or SPAR. In opposite way there are some limitations as the water depth, the costs and no active positioning capabilities. The installation of the tension legs or tendons requests also high attention.
Topsides  Definition: The Topsides are the surface installations allowing the drilling and/or production and/or processing of offshore hydrocarbons. Comments: Normally used as a plural the Topsides comes from the ship building industry to designate all the portion of the ship coming on the top of the hull or above the waterline. Then it applies on the oil and gas vessels such as FPSO, FPO, FSO, SPAR or FLNG. It has also been adopted for the offshore platforms even though they do not have any hull, except the submersible or semi-submersible platforms, because of their design in two parts: - A structure in steel or concrete supporting the platform, the biggest parts of this structure being mostly below the waterline - A production unit, whatever it is, lying on top of the deck of the supporting structure. To facilitate the construction of the platforms or FPSO and similar vessels, these Topsides are designed by modules in order to facilitate handling and assembling with heavy duty cranes on the shipyards. These modules contains all the necessary functions to operate the platform of the vessel,: - Processing facilities for oil and gas - Utilities to generate power and all other needs on board - Living quarters to host all the people on board - Water or gas injection - Helicopter deck and all safety equipment - Drilling equipment for the drilling ships or rigs With the evolution of the technology and the reduction of the costs, these Topside modules may be produced in different places of the world, then shipped to the shipyard where the hull or the structure of the platform is assembled. In some cases it may be the opposite, when the construction of a hull or the structure of a platform is completed in the shipyard, it may be pulled to another shipyard to receive all the Topside modules. This modular design of the Topsides helps the companies to benefit from the best technologies available around the globe and to compromise with the costs and/or the local content requirements which may also influence the whole construction process. After some years of operations, this modular design of the Topsides also facilitate revamping and upgrade of the platform or vessel without affecting the structure of the hull.
Turnaround  Definition: Turnaround is a planned shutdown of any plant where a large number of activities, in terms of various of discipline have to be executed in a specified / predefined duration. Comments: In the Oil & Gas and Petrochemical industry most of the plants are designed and built to last more than 30 years and many of them have already more than that. Because of their process, most of the Oil & Gas and Petrochemical plants are running continuously 24 hours a day, 365 days a year. These full duty operations makes very difficult all the maintenance operations and any day of shutdown will have major financial impact. In the same time the Health, Safety and Environmental (HSE) requirements are a must at all times. So stopping an Oil & Gas and Petrochemical facility is a major decision to be taken far before maintenance operations are needed. The major challenges in this activity lie with completing the activities and restore the Reliability and Integrity of the facility within the defined premises of duration as per the Corporate Business Plan. Turnaround entails an extensive seamless planning, resource mobilization and optimization to make it successful in this resourced scarce environment. Typically the planning takes 12 to 18 months for an execution ranging around 2 to 4 weeks hence the whole lifecycle should be considered as a project from its inception to realization. During Turnaround execution the proper monitoring of the whole jobs / activities is required to avoid any delay / slippage from the execution plan.
Turret  Definition: Turret is the major component of a vessel or any floating production unit (FPSO, FPO) to which the risers coming from the seabed are connected. Turret name refers the rotating function of this large equipment to facilitate the rotation of the vessel according to winds, waves and dominating current while the risers remain connected to a fix part on the seabed. Comments: In relatively calm waters, such as in West Africa, turrets can be located externally to the ship structure, hanging off the bow of the FPSO. For harsher environments like the North Sea, the turret is generally located internally. The turrets, mooring lines and risers can be designed to be: - Permanently connected in order to remain on location for long periods of time - Disconnectable, capable of quick disconnection through a procedure lasting just a few hours. Most ship-shaped FPSOs in the North Sea are purpose-built and are permanently moored. In areas of the world subject to cyclones (northwestern Australia) or icebergs (Canada), some FPSOs are able to release their mooring/risers turret and steam away to safety in an emergency. The turret sinks beneath the waves and can be reconnected later. The turret fulfils more functions than weathervaning. It also up lift the oil and gas and associated water and condensates production risers as well as it supports piping for water or gas injection when used. The turret supports the (multi pass) fluid swivel and forms the interface between sub-sea facilities and topsides. The electrical power supply of submerged equipment, the control system, all the information and communication systems pass also through the turret. As all risers pass through the inside of the turret bearing, it is considered as the bottleneck to the number of risers and therefore potential further field production enhancement. With a turret the offloading can be executed in tandem to the FPSO with shuttle tankers. This provides a more operational uptime and less risk of tanker collision compared with spread-moored FPSOs. An FPSO turret requires a highly specialized fabrication. If the turret is attached to the floating unit, the turret is part of the mooring system and called Turret Mooring system. Depending on the type of vessel its operations location internal or external turret may be used. The internal turret is located in the front end of a vessel. Sometimes it can be found in the middle. As the internal turret is appropriate for a large number of risers, it has good fluid transfer capabilities. The largest internal systems can accommodate up to 100 or more risers. Internal turret mooring systems also allow vessels to remain on location permanently. This holds even in the most harsh environments, as can be seen with the FPSOs in the North Sea. An advantage of the internal turret in comparison to the external turret is that mooring forces can be transferred more easily into the hull. The external turret is located outside the ship’s hull. It comprises a steal box located at the bow or stern of the vessel, which provides a foundation for the bearing and turret. The external turret is mostly set-up above the waterline, but sometimes also under. A swivel provides product and utility connections between the tanker facilities and the seabed. Being positioned outside of the hull the external turret can bear less risers and production equipment than internal turret. But the design of the external turret make it easier to be mounted on tankers converted into FPSO. So most of the new-built or purpose-built FPSO for large oil and gas fields will use internal turret while converted FPSO shall be preferred for medium or smaller developments.


glossary2b1stSince the performance in global projects is about communication to co ordinate global and local initiatives, it appeared imperative to create this glossary.
You will find words related to technology as well as commercial and contractual terms.
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