Post on 11-Jul-2015
Overview
• Enhance your overall understanding of petroleum exploration
• Common platform to work on• Multidisciplinary challenge• You are an exploration team in charge of
a new petroleum province• Your task is to get maximum return on
investment (ROI)
Money
• You start with $200Millions– You can apply for more money later
• Earnings:– Net value of the oil fields discovered– MINUS costs (surveys, wells, etc.)
• Winning team: – highest return on investment (ROI)– ROI = Earnings / Funds received
• Government Bonus given to the 10 best teams in Greenland the 1st day to be used in the 2nd OilSim day
Government Bonus
1. $ 50.000.0002. $ 30.000.0003. $ 20.000.0004. $ 14.000.0005. $ 12.000.0006. $ 10.000.0007. $ 8.000.0008. $ 6.000.0009. $ 4.000.00010. $ 2.000.000
Learning Points
• Where and how to find oil• Surveys used in exploration• Licensing rounds• Farm-in and Partnerships• Rigs and Sub-contractors• Reducing uncertainty• Economically viable volumes
Oil & Gas Industry
• Upstream–Exploration–Development–Production
• Downstream–Refining–Distribution
Structure
• Phase 1: Find Basins• Phase 2: Bid for Licences• Phase 3: Drilling
–3.1 Farm-in–3.2 Order Rig–3.3 Select Providers–3.4 Select Position–3.5 Testing
Schedule
09.30 Introduction to OilSim Phase 1 starts (Find Basins) Phase 1 Deadline Phase 2 (First Licensing Round) intro First Licensing Round deadline Lunch Phase 3 (Partnering) intro Deadline Partnering Drilling intro 2nd Licensing round opens 2nd Licensing round deadline Simulation end Debriefing15.30 End
MapColumns (1 to 112)
Row
s (1
to 1
52)
600 sea bed depth
Cell (73,66)
Block 134
134
First task
• Find the 3 basins in the area• Basin: Sedimentary rocks in the deep
subsurface where oil and gas was generated
• Procedure1.Buy and study magnetic and gravimetric
surveys2.Submit 3 block numbers; one for each basin
centre
Gravimetric surveys
• Gravimetric surveys show the gravity in the sub-surface
• Sedimentary rocks (“basins”) have lower densities than the surrounding crystalline rocks
• Low gravity (green) -> Basins• High gravity (red) -> Crystalline
rocks
Task 1
• Possible to get between 0 and 100 knowledge points (KP)–KP’s can be used e.g. when you apply
for money
• Must be solved before deadline• After the deadline, all submissions
are evaluated
Task 1 solved
• All basins are located• Message sent to all teams with the
results• Oil and gas is close to the basins• Next step: First licensing round
–The blocks around one of the basins are on offer
Second task
• Bid to get a exploration licence• Exploration licence: A permission from
the Government to explore a block• Procedure
1. Buy and study Common Risk Segment Maps and 2D Seismic surveys
2. Submit 3 bids– Block number– Amount offered to Government (“bonus”)
Common Risk Segment
• Prospect probability–Red: low–Orange: medium–Green: high
There is one CRS for each geological layer
2D Seismic surveys
• A 2D Seismic survey is a cross section of the geological layers–along either a column or a row
• Is used for locating prospects• Look out for traps• Three separate geological layers
Remarks
• In OilSim, there is only one type of trap: the four-way closure structural trap– in reality, there are several other types
• Three prospecting systems– 3. Eocene (1.500 m below seabed)– 2. Paleocene (2.500 m -)– 1. Cretaceous (3.500 m -)
Spawning Grounds
• There are spawning ground areas in the map – these are environmentally sensitive areas where fish breed
• Some spawning grounds might be in the blocks that have been offered
• However, no licences will be awarded in blocks that are spawning grounds
• To find out which blocks are spawning grounds, you can buy a Spawning Ground Survey
Spawning Ground Survey
Red Area:Spawning GroundsYou will not be awarded blocks that contain any red area
Blue Area:Not Spawning Grounds
The survey covers the whole area
Tips
• Use CRS to see which blocks to study
• Buy and study many 2D surveys• Focus on shallow water blocks
– It is cheaper to drill exploration wells in shallow water
– It is more economically viable to produce oil and gas in shallow water
Remarks
• Minimum bonus: 1000000• Maximum bonus: 30000000• You will only get one licence• Highest bid gets the licence• If you lose on all three blocks, you will
get a random licence (of the ones that are left)
• Do submit 3 bids -> more KP’s and higher probability for success
Task 2
• Submit your bid before the deadline
• After the deadline, all bids are evaluated, and each team gets one and only one licence
Task 2 solved
• Every team has got one exploration licence
• Message sent to all teams with the results
• Knowledge Points: a measure of how prosperous the blocks the team bid for were
• Next step: Farm-in
Farm-in & -out
• The headquarters of you company has evaluated the licence that you got awarded
• Although the possibility of finding oil is fair, the costs involved are large, and the headquarters wants you to spread the risk.
• This is accomplished by:– investing in other licences (farm-in), and– letting other invest in your licence (farm-out)
Task 3.1 Farm-out
• Get other’s to invest 20% or more in your licence (“farm-out”)
• You can only send farm-in offers (!)– Offers to buy parts of other licences
• Procedure for farming in:1.Study 2D Seismic surveys
2.Submit one offer for each viable licence– Amount offered– Share wanted (in whole %)
Partnerships
• Partners pay their share of all future costs incurred by the partnership.
• Partners receive their share of the net proceedings from any oil found on the licence
• The operator team takes all decisions regarding acquirement of 3D seismic, drilling of wells and testing of wells
Task 3.1
• Study 2D seismic surveys of the other licences
• Submit your bids– Minimum amount 100,000 for 1%
• You are not allowed to drill before at least 20% of your licence has been farmed out
• You can farm-in & -out at any time• Partners in a block get all info about
drilled wells and discovered prospects
Task 3.1
• Partnerships will be established every time a seller accepts an offer
• On the main page, you can see all the licences–The licences you operate–The licences you have invested in–Other licences
• Next task: order rig
Task 3.2 Rig
• 3 rig types–Drillships–Semi-submersibles– Jack-up rigs
• Different water depths, Different day rates–Rig cost = drilling days * day rate
Drilling Depths
Seabed
3500 m below seabed
Layer 3 Eocene
Layer 2 Paleocene
Layer 1 Cretaceous
1500 m below seabed
2500 m below seabed
“water depth”
Rigs
• Limited number of rigs available• You can order a rig
–use it within 20 minutes
• Not enough for all–Wait in a queue, if another team is
using the rig
• Rig day rates are dynamic
Task 3.4 Position
• You have to choose where to drill–Which cells?
• ..and how deep to drill–Either to the Eocene horizon–Through the Eocene to the Paleocene
horizon, –or through the Eocene, the
Paleocene, and to the Cretaceous horizon
Environmental Impact Assessment
• Buy an EIA survey to get more knowledge about the area
• EIA equals• Less probability for drilling problems• Less severe consequences if you run into
problems
• In the EIA you can also see which drilling locations to avoid
3D Seismic
• Shows the structure:– in one (of the three) horizons– in one block
• Look out for “tops”–a top = a trap = a prospect
Three targets
Layer 1 Creataceous
Layer 2 Paleocene
Layer 3 Eocene
Column 60, Row 79
Column 60, Row 78
Task 3.5 Testing
• If you discover a field-> decide whether you want more information about that field
• You get more information by doing a production test (and other tests)
• Tests take 10 days per field• Tests have the same day-rate as the
drilling (you use the same providers)
Narrowing ranges
• First well:–0 to 572 MBO (after drilling)–11 to 266 MBO (after testing)–Proven volume: 11 MBO
• Second well–11 to 233 MBO (after drilling)–35 to 210 MBO–Proven volume: 35 MBO
Continue...
• Drill appraisal wells to narrow the uncertainty (get proven volumes)
• Drill into other prospects• Farm-in and -out• Two additional licensing rounds• Apply for more money, if you run
out of cash• Winner: highest ROI