126 PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
production, and transport — including a return to capital — can be
recovered at a given market price.
Unconventional resources exist in petroleum accumulations
that are pervasive throughout a large area. Examples include tar
sand bitumen (sometimes referred to incorrectly as extra heavy oil)
and oil shale deposits. Unlike Conventional resources in which the
petroleum is recovered through wellbores and typically requires
minimal processing prior to sale, unconventional resources require
specialized extraction technology to produce. Moreover, the
extracted petroleum may require significant processing prior to sale
(e.g. bitumen upgraders) (Speight, 2007, 2008). The total amount of
unconventional oil resources in the world considerably exceeds the
amount of conventional oil reserves, but is much more difficult and
expensive to develop.
4.3 Benchmark Crude Oils
The price of petroleum means the spot price of either West Texas
Intermediate crude oil as traded on the New York Mercantile
Exchange (NYMEX) for delivery in Cushing, Oklahoma, or of
Brent crude as traded on the Intercontinental Exchange (ICE, into
which the International Petroleum Exchange has been incorporated) for delivery at Sullom Voe. The price of a barrel of oil is
highly dependent on both its grade, determined by factors such
as its specific gravity or API gravity and sulfur content, as well
as location. The vast majority of oil is not traded on an exchange,
but instead on an over-the-counter basis, typically with reference to a marker crude oil grade that is quoted via pricing. Other
important benchmark crude oils include Dubai, Tapis, and the
OPEC basket.
For the purposes of pricing, crude oil is generally classified based
on the API gravity and sulfur content. For example, light crude oil
has low density, low viscosity, and low sulfur content, making it
easier to transport and refine and, therefore, more expensive to purchase. Sweet crude oil has sulfur content less than 0.5% by weight
and is usually light crude oil, making it more expensive, but much
easier to refine in a way that would meet environmental standards
in developed countries.
A light crude oil is generally one with an API gravity of less than
about 40. Brent crude oil has an API gravity of 38 to 39. Sweet crude
production, and transport — including a return to capital — can be
recovered at a given market price.
Unconventional resources exist in petroleum accumulations
that are pervasive throughout a large area. Examples include tar
sand bitumen (sometimes referred to incorrectly as extra heavy oil)
and oil shale deposits. Unlike Conventional resources in which the
petroleum is recovered through wellbores and typically requires
minimal processing prior to sale, unconventional resources require
specialized extraction technology to produce. Moreover, the
extracted petroleum may require significant processing prior to sale
(e.g. bitumen upgraders) (Speight, 2007, 2008). The total amount of
unconventional oil resources in the world considerably exceeds the
amount of conventional oil reserves, but is much more difficult and
expensive to develop.
4.3 Benchmark Crude Oils
The price of petroleum means the spot price of either West Texas
Intermediate crude oil as traded on the New York Mercantile
Exchange (NYMEX) for delivery in Cushing, Oklahoma, or of
Brent crude as traded on the Intercontinental Exchange (ICE, into
which the International Petroleum Exchange has been incorporated) for delivery at Sullom Voe. The price of a barrel of oil is
highly dependent on both its grade, determined by factors such
as its specific gravity or API gravity and sulfur content, as well
as location. The vast majority of oil is not traded on an exchange,
but instead on an over-the-counter basis, typically with reference to a marker crude oil grade that is quoted via pricing. Other
important benchmark crude oils include Dubai, Tapis, and the
OPEC basket.
For the purposes of pricing, crude oil is generally classified based
on the API gravity and sulfur content. For example, light crude oil
has low density, low viscosity, and low sulfur content, making it
easier to transport and refine and, therefore, more expensive to purchase. Sweet crude oil has sulfur content less than 0.5% by weight
and is usually light crude oil, making it more expensive, but much
easier to refine in a way that would meet environmental standards
in developed countries.
A light crude oil is generally one with an API gravity of less than
about 40. Brent crude oil has an API gravity of 38 to 39. Sweet crude