Physical Oil Price

A system used to boost production from oil wells that lack sufficient natural pressure to bring fluids to surface. Common methods include rod pumps, ESPs (Electric Submersible Pumps), and gas lift. Subcontractors are often mobilised to install, service, or troubleshoot these systems throughout a well's producing life.

Collectively referred to as URF, these are the subsea infrastructure components that connect wellheads to production facilities — umbilicals carry control fluids and signals, risers bring production to surface, and flowlines move product along the seabed — subcontractors are commonly engaged for their installation, inspection, maintenance, and integrity management work. Understanding the distinctions between these systems helps field crews accurately scope work orders, apply correct certifications, and bill against the right line items in offshore or subsea contracts.

A contractually obligated set of activities and expenditures an operator must complete within a set timeframe, typically tied to a licence or lease agreement; for subcontractors, this creates predictable scopes of work and mobilisation opportunities as operators must execute these commitments or risk losing their rights to the asset.

The percentage of resource revenue an operator pays to the Crown or landowner before profits are calculated. High royalty rates can reduce operator budgets, directly affecting subcontractor hiring and field service spending. Understanding local royalty structures helps subcontractors anticipate project volumes and client cash flow.

The date when drilling begins on a new well. Marks the start of drilling operations.

A pipeline or flow line system that connects a new offshore wellhead or satellite field back to an existing production facility or platform, allowing operators to develop remote reserves without building standalone infrastructure. For subcontractors, tiebacks often involve specialised subsea installation, inspection, and maintenance scopes that require certified divers, ROV crews, or subsea engineering support.

What Is an AFE in Oil and Gas and How Does It Affect Subcontractor Payments?

An AFE (Authorization for Expenditure) controls every dollar spent on an oilfield project. Learn how it affects your billing, change orders, and cash flow as a subcontractor.