Royalty Rate

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 company that holds the rights to develop an oil and gas property and manages day-to-day operations. Operators hire subcontractors and service companies to perform various tasks.

An advanced non-destructive testing method that uses multiple ultrasonic beams to inspect welds, pipelines, and structural components for defects. It produces detailed cross-sectional images without cutting or damaging the material. Subcontractors offering PAUT services typically require certified Level II or III technicians and specialised portable equipment.

A budgeting document used in oil and gas projects that outlines expected costs and seeks approval before work begins. Subcontractors often work under AFEs issued by operators.

Refers to oil reservoirs located beneath thick layers of underground salt, typically in deepwater offshore basins. For subcontractors, pre-salt projects involve specialised equipment, extended mobilisation timelines, and higher operational complexity. Expect longer contract cycles and stricter certification requirements from operators.

Premium threaded pipe connections used in oil and gas drilling and completion operations. Subcontractors handling, installing, or inspecting VAM connections must follow strict torque specs and handling procedures. Improper makeup can result in costly downhole failures and liability exposure.

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.