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www.oilsim.com
Today’s Challenges
Environmental issues Team work and negotiation Critical decision making, analytical
skills, multi-tasking Learn through experience Economically viable volumes-
reducing uncertainty Return on Investment Function appreciation
You start with $700 millionYou can apply for more money later.
Create valueMeasured by the net value of the oil and gas fields discovered MINUS all costs involved.
Correct answers and sensible decisions are awarded with CPs
Complete Value Chain
Upstream
Today’s Challenges
Columns e.g C1, and C54,
Row
s e
.g. R
35
and R
16
3,
Block
Blocks are divided into smaller cellse g. R1C1
Challenge: Find three sedimentary basins in the area. Basins are sedimentary rocks in the deep subsurface where oil and gas has been generated.
Procedure: Buy and study magnetic and gravimetric surveys; and to submit the coordinates, column and row number for each basin centre.
Gravimetric surveys show the gravity in the sub-surface. Measured by airborne sensors.
Sedimentary rocks have lower densities than the surrounding crystalline rocks. Low gravitational pull means high probability of a basin below.
Basins have a lower gravitational pull. Crystalline rocks have higher
gravitational pull
Gravimetric survey:South-east quadrant
Magnetic surveys show similar information as gravimetric surveys. The sedimentary rocks in the basins have a lower concentration of magnetic materials than the surrounding crystalline rocks.
Sedimentary basins are the areas with the lowest magnetic field.
Basins have low magnetic field Non-basins have high magnetic fields.
Magnetic survey:North-west quadrant
Example:Top basin on
both maps Calculate the
midpoint between the gravimetric and magnetic centres found
= C55 and R105
C50
R100
C60
R110
3 centres – one Centre midpoint for each basin
Example: C55, R105 Solve before deadline. All
submissions are evaluated after the deadline (and not before).
You may get 0-100 CPs. All three centres must be located to get full CPs.
Today’s Challenges
All teams have submitted their answers. Basin centres are located.
Message in Inbox. All teams have answers and CPs awarded.
Sedimentary basins may contain oil and gas
The government has decided to put the blocks around one of the basins on offer
Challenge: Identify the 3 most promising blocks and submit a bid to the Government for these licences
1. SOURCE ROCKwhere organic material is put under sufficient pressure
2. MIGRATION ROCKwhere hydrocarbons are driven through
3. CAP ROCKImpermeable rock that stops migration of hydrocarbons 4.
PROSPECT
(c) OLFAnticline trap
Fault trap
Stratigraphic trap
Salt dome trap
Geological “pockets”, that might contain hydrocarbons.
Red areasYou will not be awarded blocks that contain any red spotsBlue areasBlocks in area may be awarded
Layer 3 Eocene1500m below the seabed
Layer 2 Paleocene2500m below the seabed
Layer 1 Cretaceous3500m below the seabed
CRS. Common Risk Segment surveys tell you about the probability of a structure in the block/cell containing oil or gas
Surface
Traps can be found with seismic surveys
2D seismic survey is a cross section of the geological layers along either a column or a row
2D seismic surveys are used for locating prospects
Unprocessed Processed
Interpreted Red is top of the sealing rock
Green is top of the reservoir rock
Leakage
Sealant rock
What type of data do you want?
Columns or Rows
Unprocessed or processed data
Interpreted or notOnly buy maximum
of 4 blocks of data at a time to speed up processing
The yellow hatched area on map can be clicked on and dragged to blocks of interest
Red circles – navigate through the 2D seismic
Yellow square – Row 1 from Column 1-56
Column
Row
Prospect, ReservoirBasin,Source
Three blocks Three amounts
Min: $1M Max: $30M
Awarded 1 block Pay for 1 block Highest bid wins If equal, then team with highest
CP wins
Environmental Sensitive Areas map to see which blocks to avoid
Common Risk Segment surveys to see which blocks to examine closer
2D surveys seismic to identify which ones have the most (big) structures
Check water depth, and go for shallow water blocks if possible
Remember to submit 3 bids
Today’s Challenges
Message sent to all teams with the results
Credibility Points are given for prosperity of the blocks you bid for
Every team has got one exploration license
HQ is happy with the license awarded. Challenge: Farm-out minimum 20% from
your license – and farm-in as much as you can in other good licenses.
Acquire 3D Seismic interpretations for the block you operate, and study the results from the licensing round
Get others to invest 20% or more in your license – you can show/send 3D seismic
Shows the subsurface structure in a cube.
Layer 1 Cretaceous
Layer 2 Paleocene
Layer 3 Eocene
Spread the risk: e.g Investing in other blocks divides the risks amongst all partners, much more preferable than keeping 100% of one field and all the risk.
Increase probability of profit: investment in only 1 field which could be a dry prospect is possible, whereas the likelihood of investing in 5 fields which are all dry is unlikely.
Enter the percentage and total amount for have agreed to offerMinimum $100,000 per %Add a message to the sellerPress “Send offer”
When a team receives a Farm-In offer to appears under Financing. This is where a team can receive finance or money for a % of their own blocks
license OWNER decides whether to ACCEPT or REJECT the offer
Partnerships established every time a license owner accepts an offer.
Overview: On the main page, you can see all licenses. 1) licenses you operate, 2) licenses you have invested in, and other
licenses.
All your farm-in offers to other teams are shown under “Investing” on the right-hand side of the homepage . This is where a team offers investments to other teams for a % of their blocks
Partners pay a proportional share of all future costs
Partners receive a proportional share of the net proceeds from oil and gas
The operator team makes all decisions regarding drilling
Teams can farm-out up to 70% of licence
Operators must keep 30% of licence
•Before choosing a rig, you need to check your water depth Find this at the bottom of the BLOCK page
Choose the right rigs for your water depths Jack-up rigs for shallow waters
Semi-submersible rigs for middle waters
Drillships for the deepest waters
Rig cost = drilling days * day rate
Upto 9 Star quality-
Good: normally costs more
Bad: cheaper, but reliability
is low, so you risk extra drilling time and extra costs
EIA survey: more knowledge about the area.
Less probability for drilling problems. Less severe consequences if you run
into problems.
= Which drilling locations to avoid.
EIA: enviromental impact analysis shows where it will cost you more to drill.
Place your mouse where to drill
Layer 1 Cretaceous
Layer 2 Paleocene
Layer 3 Eocene
Oil spill or Gas Blowout control
Estimated cost
Volume Range in MBOE counts
Test may increase Proven MBOE if oil or gas found
From Probable volume to proven reserves
Exploration well: 0 to 1572 MBOE (after drilling) 11 to 1266 MBOE (after testing)
First appraisal well: 25 to 1033 MBOE (after drilling) 34 to 910 MBOE (after testing)
Second appraisal well: 65 to 850 MBOE (after drilling) 101 to 752 MBOE (after testing)
Only proven MBOE counts
After your first drill in each well, reprocess seismic
Decide which discoveries to drill how many appraisal wells into
Ultimately, you should either: Get a positive net present value, Or a conclusion that additional
appraisal wells will not result in a net present value
Click on Apply for More Funds Tab. 1 KP for each $100,000 applied for. Answer the questions: All correct gives
cash and you can keep KPs. One wrong gives cash and you keep ½ of your KPs. Two wrong gives ½ cash and you lose all KPs. All wrong, you get no cash and lose all KPs.
Expensive money if less than 10 knowledge points: Apply for cash and be fined $5million for each $20million requested.
Make a well plan for each reservoir in your block, choosing: Number of production wells Tubing size
Aiming to choose a plan that
maximises value of block Increased sales value Decreased drilling costs
Click the Surveys tab
Nodal analysis
Expected Production Profile
Highest well flow rate
Read the maximum well flow rate Most suitable Tube size
Most suitable tube
1. Click the Reservoir tab
2. Click the magnifyingglass for the reservoir
3. Study the data forthe reservoir
Click on Drilling Rig
1. Submit plans with different number of wells and tubing sizes
1. Review Reservoir information after each revised plan
2. Aiming to maximize sales value and minimize drilling costs, whilst increasing Recovery Factor
3. You can amend your well plans until the deadline
4. Credibility points – upto 100 kp if plans are optimal for all your reservoirs
5. After deadline – Value of Licence will be adjusted based on final Well Plan submitted
Plan the facilities to produce the oil and gas that has been found in the block
Maximize the value of the license block Maintain sales value Decrease facilities
costs Reduce risk
Environmental surveys
Earthquake survey legend
Waveheights
Hurricanes
Value Shown = income less expenses Discount factors: 0%-20%
0% 5% 20%
189M 118M 48M
1. Click the Reservoir tab
2. Click the magnifyingglass for the reservoir
3. Average seabed depthvisible here
Determine maximum production volumes of values of oil, gas and water(In gas fields it is gas, condensate and
water)
Estimated no. of barrels can be transported per day Different flowline (riser) and pipeline sizes = Different no. of barrels
Flowline size : Multiphase fluid from seabed
to platform (acting as flowline and riser)
Pipeline size : Oil and condensate to
storage tanks Gas to processing plant
Connect pipelines to Gas terminal and an Oil terminal
Plan the construction of facilities required to operate your platform
Submit a financial summary of the plan
Execute construction plan Minimize capital expenses Amend construction plan as issues
occur Get to FIRST oil!
Choose only 1 activity – where a Dotted line
Where a solid line exists, the task below the line must be completed before starting the task above the line
Considerations: Reach First Oil
within 21 periods of 90 days – TOTAL 1890 days
Time V. Cost Local Content
Activity completed
Activity delay – still ongoing
Issue with activity
Progress of activity
PART A Activity Hierarchy Survey – study activity
dependencies Vendor report - compare providers/local content Prepare construction plan Submit Planning Summary
PART B Execute Plan - as many activities as possible
within each period; provider for each activity Check Timeline chart to see progress Reassess/alter providers as issues occur
Financial consequences of your decision?
Other major drivers of decision Did country strategy play a role? Above-ground risks? Changeable market conditions? Impact on commercial contracts? Operating agreements affected? Other information to consider?
