Oil and Gas Definitions.

Barrel of Oil
42 U.S. gallons of oil at 60 degrees Fahrenheit.

Crude Oil
Oil in its natural state of composition. “Crude” is classified according to its physical properties: a. Paraffin Based, b. Asphaltic Based, c. Mixed Based.

Depletion
The reduction in value of mineral deposits as it is produced. Oil is a wasting asset, in that proceeds from the well represent both income and return of capital.

Developmental Well
A well drilled to a known producing formation in an existing oil field.

Discovery Well
An exploratory well which encounters production in a previously unknown deposit.

Division Order
A contract with a purchaser of oil and gas which directs the payments of oil and gas revenues to the interest owners of a well.

Drilling
The act of boring into the earth.

Drilling Rig
The equipment used to bore into the earth. There are two types: a. Rotary b. Cable tools. The rotary type is more modern and efficient.

D&A
Dry and abandoned.

Electric Log
An electrical survey made on uncased holes. A special tool is lowered into the hole which ejects an electrical current into the rock and records its resistance to the current. The data from the survey is used by the geologist to determine the nature of the rock and its contents.

Exploration
A general term referring to all efforts made in the search for new deposits of oil and gas.

Flowing Well
A well capable of producing oil or gas by its own energy without the aid of a mechanical pump. Normally a pump is put on the well after the pressure reduction inhibits the rate of production.

Fracing
The process of pumping fluids into a productive formation at high rates of injection to hydraulically break the rock. The “fractures” which are created in the rock act as flow channels for the oil and gas to the well.

Gas Well
A well that produces natural gas which is not associated with crude oil.

IDC
(Intangible Drilling Costs) All cost incurred in drilling a well other than equipment or leasehold. These expenses are 100% tax deductible even if the well is productive.

IP
(Initial Production) Production from a well is generally broken down into three categories: a. Flush or Initial b. Settled c. Stripper. It is important for investors to realize that a well cannot maintain the flow rates it made during the first stages of its life.

Non-Commercial
A well that is not capable of producing enough oil to pay for the drilling.

NRI
(Net Revenue Interest) That percent of the production revenue allocated to the working interest after first deducting proceeds allocated to royalty and overriding interest.

Oil
A liquid hydrocarbon. (see “Crude Oil”)

Oil Gravity
The most widely used indicator of a crude oil’s worth to the producer is its API gravity. Normally, the price which a producer receives for his oil depends on its gravity, the less dense oils (higher API gravity) being the most valuable. This price schedule is based on the premise that the lighter oil contains higher percentages of the more valuable products such as gasoline. API Gravity (degrees) = (141.5/sp.gr.) – 131.5.

Oil and Gas Leases
A contract between an oil operator and a landowner which gives the operator the right to drill for oil and gas on his property for a consideration. It is simply a “ticket to hunt”.

On the Pump
An expression that means a well is incapable of flowing and that the oil is being pumped to the surface by a “pumping unit”.

Operating Expense
The expenses incurred through the operation of producing properties.

Payout
When the costs of drilling, producing and operating have been recouped from the sale of products on a well.

Permeability
A measure of the resistance of rock to the movement of fluids. Rocks may have holes or void spaces in them (porosity), but if these holes do not connect, the permeability can be drastically reduced.

Petroleum Landman
The oil and gas industries contract negotiator, lease acquisition personnel.

Porosity
A measure of the relative volume of void space in rock to the total rock volume. These spaces or pores are where oil and gas accumulate; therefore, a formation containing a high percentage of porosity can contain more hydrocarbons.

Proven Reserves
Oil and gas which has not been produced but has been located and is recoverable.

Pumper
An employee of an operator who is responsible for gauging the oil and gas sold off the leases he has been assigned and who is also responsible for maintaining and reporting the daily production.

Real Estate Investment Trusts (REIT’s)
A trust or association that invests in a variety of real estate. REITs are managed by one or more trustees, like a mutual fund, and trade like a stock. No federal income tax needs to be paid by the trust if 75% of the income is real-estate related and 95% of the income is distributed to investors. Individual investors can be taxed.

Rework Operations
Any major operation performed on a well after its completion in an attempt to restore or improve its ability to produce.

Salt Water Disposal Well
Many wells produce salt water while producing oil. The disposal of this water is a problem to an operator because of pollution. The best solution to the problem is to pump the waste back into a formation that is deep enough not to pollute shallow water sands. Many stripper wells which are no longer commercial are converted for this purpose.

Secondary Recovery
A broad term encompassing any method of extracting oil from a reservoir after a well or field has exhausted its primary production.

Sedimentary Rocks
Rock is generally classified in one of three categories: a. Sedimentary; b. Igneous; c. Metamorphic.

Settled Production
The second phase of production in the producing life of a well. (see IP).

Stripper Well
The final state in the life of a producing well.

Structural Trap
A fold or break (or both) in the earth’s crust which creates an impervious trap for oil and gas. Oil will migrate underground through rock until it is “trapped”.

Surface Pipe
Pipe which is set with cement through the shallow water sands to avoid polluting the water and keep the sand from caving in while drilling a well.

Swab
A tool which is lowered down the pipe on a wire line. The “swab” is then pulled out of the hole. As it travels up the pipe, rubber elements expand so that the fluid in the pipe is trapped above the swab and pushed to the surface. This operation is necessary when the formation pressure is not high enough to blow the fluids in the pipe to the surface.

Tank Battery
A group of tanks at a well site used to store oil prior to sale to a pipeline company.

Testing
When each new well is competed, a series of tests are run on the well. The various tests are used to estimate the daily deliverability, payout, and reserves.

 

Tubing
Small diameter pipe which is installed in the casing. Oil is produced through tubing because it increases the viscosity of fluid and a well’s flow capabilities.

Turnkey Contract
A contract in which an operator or drilling contractor agrees to furnish all labor and materials necessary to drill a well to a certain depth or stage of completion for a specified sum of money. The operator or contractor assumes all of the responsibility and risks involved in completing the operation.

Viscosity
The resistance of fluid to flow. A high viscosity fluid will not flow as easily as a low viscosity fluid (Mud will not move as easily as water).

Water Flooding
A secondary recovery method for the production of oil from a formation. Oil will float on water. When water is injected into some formations, the oil will float or be washed to the surface, thereby, increasing the amount of production from a well or field. Some formations will not react to this type of stimulation.

Wild Cat
A well that is drained one or more miles from a proven well.

Abandoned Well… An abandoned well is an oil well or gas well which is no longer in use whether inoperable, in production or classified as a dry hole or left dormant as an inoperable well. Often times, an abandoned well is one which is not being accounted for by the oil operator of record and is not current on necessary regulatory filings. Wells classified under the Texas Railroad Commission as orphan wells are generally abandoned wells. 

Acidizing

Acidizing an oil well is the process of pumping acid, generally hydrochloric acid, into an oil reservoir. The acid serves to dissolve built up material, calcite which in turn opens up and enlarges the naturally occurring holes in the rock’s surface. This process helps the increase of the flow of fluids in the reservoir. While it is common to treat limestone with acid, sandstone may be acidized or acid treated as well should it contain calcite which does not affect the quarts grains composing the sandstone.

 

Ad Valorem Tax is a value related tax levied at the county level for producing minerals including hydrocarbons such as crude oil and natural gas.

 

AFE – Authorization for Expenditure

The AFE or Authorization for Expenditure is the anticipated drilling costs for the drilling and completion of a proposed well. Prior to the drilling or work over of a prospect well, the operator will provide the working interest owners with the estimated well drilling costs or estimated work over costs (AFE) outlining the anticipated expenditures. Costs may be identified as dry hole costs which are costs incurred to drill up the the casing point in addition to the costs to drill, test and complete the well is completion is deemed necessary.

API Number

An API Number is a unique number which identifies each specific well which is drilled in the United States. The API numbering system was developed by the American Petroleum Institute (API) as a method of identifying each particular well. Generally, an API number will have a up to 14 digits in which the first two digits represent the state code followed by three digits representing the county code. The next five digits indicate the identifying number specific to the well. An additional two digits represent any sidetrack to the well followed by an additional two digits indicating an additional sequence of events. The first two API code digits for wells drilled onshore in Texas is 42 established by the Texas Railroad Commission.

 

Directional Drilling

Directional Drilling is when a well bore is drilled at a slant or angle in order to reach the targeted hydrocarbon reservoir or objective. This is generally due to surface obstructions where it would be impractical or impossible to place the drilling rig and surface equipment on the surface such as a lake or pond, park, building or other man-made and natural obstructions.

 

Payzone

The Payzone is the anticipated or expected production reservoir indicated by an identified layer of rock. It is not uncommon for a single well bore to have multiple productive reservoirs indicated by several layers or “payzones” at various depths.

Working Interest
Oil and Gas Working Interests.
A working interest in an oil or gas property held by the taxpayer directly or through an entity that does not limit the liability of the taxpayer is not treated as a passive activity, whether or not the taxpayer materially participates in the activity. Thus, an owner of a working interest in oil or gas property is permitted to deduct otherwise allowable losses attributable to the working interest against other income without limitation under the passive loss rule.

A working intertest in an oil or gas property is one that is burdened with the cost of development and operation of the property, such as the responsibility to share expenses of drilling completed or operating oil and gas property, according to working or operating mineral interest in any tract or parcel of land. Rights to overriding royalties, production payments, and the like do not constitute working interests because they are not burdened with the responsibility to share expenses of drilling, completing, or operating oil and gas property.

Likewise, contract rights to extract or share in oil and gas, or in the profits from extraction, without liability to share in the costs of production do not constitute working interests. Income from such interests is generally considered to be portfolio income.
A special rule applies in any case where, for a prior tax year, net losses from a working interest in a property were treated by the taxpayer as nonpassive losses by reason of the working interest exception. In such case, any net income realized by the taxapayer from the property (or any substituted basis property) in a subsequent year also is treated as active income. For example, suppose a taxpayer claimes losses with regard to a working interest that starts to generate net income. If he transfers the interest to an S corporation in which he is a shareholder or to a partnership in which he is a limited partner, the income will continue to be nonpassive. The income from that interest may not be offset by other passive activity deductions.

IN GENERAL — The term “passive activity” shall not include any working interest in any oil or gas property which the taxpayer holds directly or through any entity which does not limit the liability of the taxpayer with respect to such interest.

INCOME IN SUBSEQUENT YEARS — If any taxpayer has any loss for any taxable year from a working interest in any oil or gas property which is treated as a loss and is not from a passive activity, then any net income such as property (or any property the basis of which is determined in whole or in part by reference to the basis of such property) for any succeeding taxable year shall be treated as income of the taxpayer which is not from a passive activity. If the preceding sentence applies to the net income from any property for any taxable year, any credits allowable under subpart B (other than section 27(a) or D of part IV of subchapter A for such taxable year which are attributable to such property shall be treated as credits not from a passive activity to the extent that the amount of such credits does not exceed the regular tax liability of the taxpayer for the taxable year which is allocable to such net income.

Write-Offs
That portion of an oil investment which is deductible for tax purposes. All intangibles are deductible.
To get an idea, you can go to the Tax Benefits Tab for more information.
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OIL SECTOR OVERVIEW:

THE PRODUCERS, THE DRILLERS, THE ENERGY SERVICES COMPANIES
*Some basic terms and how the industry sectors are related

THE PRODUCERS (E&P)

Exploration and production (E&P) companies focus on finding hydrocarbon reservoirs, drilling oil and gas wells and producing and selling these materials to be later refined into products such as gasoline. This activity is usually referred to as upstream oil and gas activity. Today, there are hundreds of public E&P companies listed on U.S. stock exchanges. Virtually all cash flow and income statement line items of E&P companies are directly attached to oil and gas production; therefore, investors should develop an understanding of basic production terminology when assessing E&P stocks.

Exploration and production companies measure oil production in terms of barrels. A barrel, usually abbreviated as “bbl”, is 42 U.S. gallons. Companies often describe production in terms of bbl per day or bbl per quarter. A common methodology in the oil patch is to use a prefix of “m” to indicate 1,000 and a prefix of “mm” to indicate 1 million. Therefore, one thousand barrels is commonly denoted as “mbbl” and one million barrels is denoted as “mmbbl”. For example, when an E&P company reports production of 7 mbbl per day, it is referring to 7,000 barrels of oil per day.

Production of gas is described in terms of standard cubic feet, which is a measure of quantity of gas at 60 degrees Fahrenheit and 14.65 pounds per square inch of pressure. Similar to the convention for oil, the term “mmcf” means 1 million cubic feet of gas. One billion cubic feet is denoted as “Bcf” and one trillion cubic feet is denoted as “Tcf.”

Note that gas market prices are sold on the New York Mercantile Exchange futures market in terms of million British thermal units, or “mmbtu”, which is roughly equivalent to 970 cubic feet of gas. Investors frequently think of an mcf of gas as being equivalent to one mmbtu.

E&P companies often describe their production in units of barrels of oil equivalent (BOE). In calculating BOE, companies usually convert gas production into oil equivalent production using an energy equivalent basis. In this basis, one BOE has the energy equivalent of 6,040 cubic feet of gas – or roughly one bbl to 6 mcf. Oil quantity can be converted into gas quantity in a similar fashion and gas producers often refer to production in terms of gas equivalency using the term “mcfe”. Note that the energy conversion basis often is not reflected in the respective market prices of oil and gas.

E&P companies report their oil and gas reserves – the quantity of oil and gas they own that is still in reservoirs in the ground – in the same bbl and mcf terms as above. Reserves are often used to value E&P companies and make predictions for their revenue and earnings. Note that reserves’ values are not GAAP figures and they are not directly booked into a company’s financial statements

Because new reserves are the primary source of future revenue, E&P companies spend a lot of time and effort in finding new petroleum reserves. If an E&P company stops exploring, it will generate revenue from a finite and depleting quantity of petroleum and, therefore, revenue will naturally decline over time. As a result, E&P companies can only maintain or grow a revenue base by acquiring or finding new reserves.

DRILLING AND SERVICE

E&P companies do not usually own their own drilling equipment or employ drilling rig staff. Instead, they hire contract drilling companies like Grey Wolf Inc. or Nabors Industries Ltd. to drill wells for them. Contract drilling companies generally make a living based on the amount of time they work for the E&P companies. Drilling companies do not generate revenue in a way that is tied directly to oil and gas production as is the case of E&P companies.

Once a well is drilled, there are many activities involved with generating and maintaining its production over time. These activities, such as well logging, cementing, casing, perforating, fracturing and maintenance are collectively referred to as well servicing. As is the case for drilling, there are many public companies, like Halliburton Company and Schlumberger, that are involved with well -service activity. Revenue of service companies is tied to the level of activity in the oil and gas industry, sometimes measured by the “rig count” or the number of rigs working in the United States at any given point in time.

Investing in energy stocks can be complicated business. As is the case for most company analysis, a good starting point is to understand how the businesses derive revenue. For E&P companies, investors should strive to understand production and the production potential tied to current and planned exploration activity. For drilling and service companies, investors should develop a feel for the energy cycle, the drilling and service companies’ competitive landscape and the omnipresent impact of oil and gas price changes over time.

The Oil Services Industry

There is no doubt that the oil/energy industry is extremely large. According to the Department of Energy (DOE), fossil fuel (including coal, oil and natural gas) makes up more than 85% of the energy consumed in the U.S. as of 2008. Oil supplies 40% of U.S. energy needs.

Before petroleum can be used, it is sent to a refinery where it is physically, thermally and chemically separated into fractions and then converted into finished products. About 90% of these products are fuels such as gasoline, aviation fuels, distillate and residual oil, liquefied petroleum gas (LPG), coke (not the refreshment) and kerosene.

Refineries also produce non-fuel products, including petrochemicals, asphalt, road oil, lubricants, solvents and wax. Petrochemicals (ethylene, propylene, benzene and others) are shipped to chemical plants, where they are used to manufacture chemicals and plastics.

There are two major sectors within the oil industry, upstream and downstream. For the purposes of this tutorial we will focus on upstream, which is the process of extracting the oil and refining it. Downstream is the commercial side of the business, such as gas stations or the delivery of oil for heat. Oil Drilling and Services Oil drilling and services are broken into two major areas: drilling and oilfield services.

Drilling

Drilling companies physically drill and pump oil out of the ground. The drilling industry has always been classified as highly skilled. The people with the skills and expertise to operate drilling equipment are in high demand, which means that for an oil company to have these people on staff all the time can cost a lot. For this reason, most drilling companies are simply contractors who are hired by oil and gas producers for a specified period of time. In the drilling industry, there are several different types of rigs, each with a specialized purpose. Some of these include:

Land Rigs – Drilling depths ranges from 5,000 to 30,000 feet.

Submersible Rigs – Used for ocean, lake and swamp drilling. The bottom part of these rigs are submerged to the sea’s floor and the platform is on top of the water.

Jack-ups – this type of rig has three legs and a triangular platform which is jacked-up above the highest anticipated waves.

Drill Ships – These look like tankers/ships, but they travel the oceans in search of oil in extremely deep water.

Oilfield Services

Oilfield service companies assist the drilling companies in setting up oil and gas wells. In general these companies manufacture, repair and maintain equipment used in oil extraction and transport. More specifically, these services can include:

Seismic Testing – This involves mapping the geological structure beneath the surface.

Transport Services – Both land and water rigs need to be moved around at some point in time.

Directional Services – Believe it or not, all oil wells are not drilled straight down, some oil services companies specialize in drilling angled or horizontal holes.

The energy industry is not any different than most commodity-based industries as it faces long periods of boom and bust. Drilling and other service firms are highly dependent on the price and demand for petroleum. These firms are some of the first to feel the effects of increased or decreased spending.

If oil prices rise, it takes time for petroleum companies to size up land, setup rigs, take out the oil, transport it and refine it before the oil company sees any profit. On the other hand, oil services and drilling companies are the first on the scene when companies decide to start exploring.

Oil Refining

The refining business is not quite as fragmented as the drilling and services industry. This sector is dominated by a small handful of large players. In fact, much of the energy industry is ruled by large, integrated oil companies. Integrated refers to the fact that many of these companies look after all factors of production, refining and marketing. For the most part, refining is a slow and stable business. The large amounts of capital investment means that very few companies can afford to enter this business.

From the refinery, oil is piped, shipped, railed or trucked (usually several of the above) to your corner gas station.

OIL OVERVIEW
(synthesized from public domain sources)

HOW OIL IS FORMED?

Oil is formed from the remains of animals and plants (diatoms) that lived millions of years ago in a marine (water) environment before the dinosaurs. Over millions of years, the remains of these animals and plants were covered by layers of sand and silt. Heat and pressure from these layers helped the remains turn into what we today call crude oil. The word “petroleum” means “rock oil” or “oil from the earth.”

PRODUCTS MADE FROM A BARREL OF CRUDE OIL

Crude oil is called “sweet” when it contains only a small amount of sulfur and “sour” if it contains a lot of sulfur. Crude oil is also classified by the weight of its molecules. “Light” crude oil flows freely like water, while “heavy” crude oil is thick like tar.

After crude oil is removed from the ground, it is sent to a refinery by pipeline, ship, or barge. At a refinery, different parts of the crude oil are separated into useable petroleum products. Crude oil is measured in barrels (abbreviated “bbls”).

A 42 -U.S. gallon barrel of crude oil provides slightly more than 44 gallons of petroleum products. This gain from processing the crude oil is similar to what happens to popcorn, which gets bigger after it is popped.

CRUDE OIL EXTRACTION

Because oil and gas are less dense than water (which occurs in huge quantities in the earth’s subsurface), oil and gas migrate UP through relatively porous sedimentary source rock toward the earth’s surface.

When the hydrocarbons (oil and gas) are trapped beneath a non-porous rock, an oil and gas reservoir is formed. This type of rock is called a cap rock, as it caps the upward migration of oil and gas. This is also called a “trap”, as the oil and gas are trapped and cannot move.

These reservoirs, which are simply layers of rock containing relatively large quantities of oil and gas, are our source for crude oil and gas.

To find these traps, geologists use satellite imagery, 3D seismic, gravity meters, and magnetometers. Once a steady stream of oil is found, underground the drilling can begin.In order to bring the hydrocarbons to the surface, a well must be drilled through the cap rock and into the reservoir. Drilling rigs work in a similar fashion as a hand drill; a drill bit is attached to a series of drill pipes and the whole thing is rotated at high speeds to make a well in the rock. Once the drill bit reaches the reservoir, a productive oil or gas well can be completed and the hydrocarbons can be pumped to the surface.

When the drilling activity does not find commercially viable quantities of hydrocarbons, the well is classified as a “dry hole”. Dry holes are typically plugged and abandoned.

OIL SANDS

Oil can also be extracted from oil sands, often called tar sands. Oils sands are typically sand or clay mixed with Water and very viscous (or “gooey”) form of crude oil known as bitumen.

The extraction process for oil sands can be quite different from drilling due to the high viscosity of this extra-heavy oil. It can be strip mined or a variety of other techniques can be used to reduce the viscosity of the oil. This process can be far more expensive than traditional drilling and is found in high abundance only in Canada and Venezuela. As oil demand continues to rise, and reserves become depleted, oil sands could provide one of the last viable methods for extracting crude oil from the Earth.

WORLDWIDE OIL PRODUCTION

While just about every country in the world depends on oil, not all countries produce it. The top five oil producing countries are: Saudi Arabia, Russia, United States, Iran, and China. It is important to note that the term production here refers to crude oil extracted from oil reserves.

The top five oil consuming countries are: United States, China, Japan, Russia, and Germany. At the current rate of consumption it is estimated that worldwide reserves will become extinguished by 2039. Scientists and engineers are working hard to find ways of more efficiently extracting and processing crude oil to delay what could one day become a global energy crisis.

WHAT IS OPEC?
*source: WIKIPEDIA

The Organization of the Petroleum Exporting Countries (OPEC) is a cartel of twelve countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.

OPEC’s influence on the oil market has been widely criticized, since it became effective in determining production and prices. Arab members of OPEC alarmed the developed world when they used the “oil weapon” during the Yom Kippur War by implementing oil embargoes and initiating the 1973 oil crisis.

OPEC’s ability to control the price of oil has diminished somewhat since then, due to the subsequent discovery and development of large oil reserves in Alaska, the North Sea, Canada, the Gulf of Mexico, the opening up of Russia, and market modernization.

OPEC nations still account for two -thirds of the world’s oil reserves, and, as of April 2009, 33.3% of the world’s oil production, giving them considerable control over the global market. The next largest group of producers, members of the OECD and the Post-Soviet states produced only 23.8% and 14.8%, respectively, of the world’s total oil production.

As early as 2003, concerns that OPEC members had little excess pumping capacity sparked speculation that their influence on crude oil prices would begin to slip.

THE FUTURE

There is an organization called the Energy Information which issues what is generally considered the most accurate statistics on the oil and gas industry, from production to consumption.
In early 2010 the EIA estimated that energy consumption would rise by 44% from 2006 ± 2030, with usage by non-OECD countries increasing by 73% and only 15% for OECD countries. The EIA estimates that in 2007 dollars, the price of light sweet crude oil in the United States will rise from $61 per barrel in 2009 to $110 per barrel in 2015 and $130 per barrel in 2030.

THE UNITED STATES AND FOREIGN OIL —
WHERE DOES OUR OIL COME FROM?

The United States imported about 57% of the petroleum, which includes crude oil and refined petroleum products that it consumed during 2008. Nearly half of these imports came from the Western Hemisphere. Its dependence on foreign petroleum is expected to decline in the next two decades.

Although the US is the third largest crude oil producer, most of the petroleum it uses is imported.

Western Hemisphere nations provide about half of its imported petroleum.

Net imports have generally increased since 1985 while U.S. production fell and consumption grew.

The United States consumed 19.5 million barrels per day (MMbd) of petroleum products during 2008 making us the world’s largest petroleum consumer.

The United States was third in crude oil production at 4.9 MMbd. But crude oil alone does not constitute all U.S. petroleum supplies. Significant gains occur, because crude oil expands in the refining process, liquid fuel is captured in the processing of natural gas, and we have other sources of liquid fuel, including biofuels. These additional supplies totaled 3.6 MMbd in 2008.

In 2008 the United States imported 12.9 million barrels per day (MMbd) of crude oil and refined petroleum products. We also exported 1.8 MMbd of crude oil and petroleum products during 2008, so our net imports (imports minus exports) equaled 11.1 MMbd.

Petroleum products imported by the United States during 2008 included gasoline, diesel fuel, heating oil, jet fuel, chemical feedstocks, asphalt, and other products. Still, most petroleum products consumed in the United States were refined here. Net imports of petroleum other than crude oil were 7% of the petroleum consumed in the United States during 2008.

Some may be surprised to learn that almost 50% of U.S. crude oil and petroleum products imports came from the Western Hemisphere (North, South, and Central America and the Caribbean including U.S. territories) during 2008. About 20% of our imports of crude oil and petroleum products come from the Persian Gulf countries of Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia, and United Arab Emirates. The largest sources of net crude oil and petroleum product imports are Canada and Saudi Arabia.

Sources of Net Oil Imports:

Canada (20.1%)

Saudi Arabia (13.8%)

Venezuela (10.5%)

Nigeria (8.8%)

Mexico (8.7%)

It is usually impossible to tell whether the petroleum products you use came from domestic or imported sources of oil once they are refined.