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In the petroleum industry, Allocation is typically referred to as Production Allocation, which consists of two key components: commercial allocation and technical allocation. Commercial allocation ensures the accurate distribution of revenue and costs, while technical allocation refers to practices of breaking down measures of quantities of extracted hydrocarbons across various contributing sources. Allocation aids the attribution of ownerships of hydrocarbons as each contributing element to a commingled flow or to a storage of petroleum may have a unique ownership. Contributing sources in this context are typically producing petroleum wells delivering flows of petroleum or flows of natural gas to a commingled flow or storage.
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