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Definition: Barrels of Oil Equivalent per Day - BOE/D
A metric used in the oil industry to measure the volume of crude oil and natural gas being extracted each day. BOE/D is almost always used to compare the production volume or productivity among competing oil and natural gas companies.
Barrel of Oil Equivalent is a unit of energy, calculated on the basis of the energy released by burning one barrel, which is equivalent to 42 US gallons or 158.98 litres of crude oil.
1 BOE equals:
- 6,119 megajoule (MJ)
- 1,462,000 kilocalorie (kcal)
- 1,700 kilowatt hour(kWh)
BOE simplifies the reporting of production numbers in the financial reports of oil and gas companies, since they can easily combine oil and natural gas reserves and production into a single metric. Generally, one barrel of oil is expected to contain the same amount of energy as 6,000 cubic feet of natural gas.
Reporting in BOE/D is a kind of industry standard and every large oil and gas producing company is expected to report its daily productivity in this unit. This also facilitates the investors in making informed decisions by comparing the production/reserves of two or more oil and gas corporations.
For example, Shell has a 27.5 per cent share in the Sakhalin I project in Russia. It is estimated that this would produce 395,000 barrels of oil equivalent per day (boe/d) at its peak production capacity. This is the same output level as the entire oil industry of Syria or Vietnam.