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Offshore e&p356 2012

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latest e&p ppt as of 09/05/12 - suitable for recent RGU event

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Welcome to OilSim, Exploration and Production Our simulation today is being used to give you a general overview and an Oil and Gas Exploration and Production company and how the parts within it function together. The simulation is a very simplified version of the whole Upstream value chain, since we only have one day to show you the whole process. Also, TOTAL might do things a little differently in certain areas, but the intention is for you to appreciate the complexities of each area and to understand a little of what your colleagues do in departments outside your own. For those of you who are geologists – you might find our 3d seismic to be very simplified compared with the analysis you do on a daily basis For Construction or production engineers – the simplified process of determining the field development does not cover all the steps necessary HOWEVER, the aim is NOT to make you all experts in every part of the Upstream industry but for you to see how all your individual jobs contribute to a larger process and just to give you an insight into the dynamics TOTAL faces each day
This is how the screen looks like when you browse to the www.oilsim.com web site. To enter the system, you need to enter your user name and your password, and then press the Return key on the keyboard. You will get the user name and password from your teacher/facilitator.
Hydrocarbons – surveys to help find them Licensing rounds Farm-in and Partnerships Drilling rigs and Sub-contractors Well planning – transportation capacities Facilities – Platforms, flowlines and pipelines Construction – activities and timeline Operations – Issues, maintenance and OPEX
how environmental issues are addressed, how testing and appraisal wells reduce uncertainty, and finally the whole concept of economically viable volumes, to find out when do you move beyond exploration and start producing the oil or gas.
In order for your team to be able to start exploring, the headquarters have provided you with 700 million US dollars in virtual money. You can spend this money on acquiring surveys, bidding for licenses, investing in other team ’ s licenses, and drilling wells. If you run out of money, it is possible to apply for more money from the headquarters. You have to be careful, however, that you do not accept too much money, because, as mentioned, you are being measured on the Return On Investment, or ROI. The ROI is calculated as the value divided by the funds that you receive from the headquarters, so the more money you get, the harder it is to have a high ROI. The value is calculated as the net present value of all the oil and gas fields that your team owns a share of – minus everything you spend.
The long and bumpy road for oil from the underground to your tank, is called the oil and gas industry value chain. The value chain is divided further into these parts: Upstream is about getting the hydrocarbons up from the ground, and comprises of activities related to exploration, field development, construction, production and abandonment. By its nature, the exploration phase is common for both oil and gas, but soon afterwards, the oil and gas value chain will segregate into two parallel value chains. Midstream is about transportation and storage, as well as oil refining and gas processing. Downstream is about distribution and retail sales of gas, fuels and lubricants, plastics and other hydrocarbon derivatives to industrial and consumer markets. OilSim Exploration is all about the exploration part of the oil and gas industry. Exploration is about finding the hydrocarbons and proving that they are in sufficient quantities to start producing. OilSim Production is about actually taking the oil or gas out of the subsurface.
Main screen overview In the middle you can see the map again with a legend below. Later in the simulation the blocks in the map will have different colour codes depending on for example whether it is currently on offer or whether there has been found oil or gas there. You can click on any block on the map and get more information about that block. There is not much information in these ” block pages ” early in the simulation session, but these pages that describe each of the blocks become increasingly complex and comprehensive towards the end of the simulation. In the middle of this page you can see a description of the current task with six fields to fill out before the deadline passes. In the left hand side there is first a summary of the current standings. This includes your total value, the capital you have received from headquarters, the cash you have left, your return on investment, your rank among all the players in this simulation reality, and the knowledge points that you have accumulated. Knowledge points are awarded based on how well you solve the tasks within OilSim, and can be used when you ask for more money from the headquarters. By clicking More you can review the accounts with all financial transactions. Below the summary is a brief status, including the deadline for this task. Below the status are a number of simulation options, of which the first one (Home) is the most frequently used. In the Mailbox you can read and send messages from and to your rivals, as well your headquarters and the ministry who awards the licenses. When you click Home you get back to the first page of OilSim, and it is a good advice to go back to the home page frequently. You can also send applications to the headquarters for new funds for your exploration, but be prepared to answer some questions before you can get them to release the funds. By clicking Teams you can see how the other teams are doing, and by clicking Knowledge you can get a list of the times you have gained or lost knowledge points. Below this there are a number of helpful texts for you, including a brief description of the simulation concept, the geology, partnerships, and a glossary. The general structure of this page remains the same throughout the simulation.
Your first task is to identify the three basins that are in the area. A basin is an region in the deep subsurface with a high accumulation of sedimentary rocks. These sediments in general contain dead plants and animals – also known as organic material – that were deposited million of years ago. Some of the organic material has been put under enough pressure and been exposed to high enough temperatures to be converted into hydrocarbons, including oil and gas. This oil and gas has since migrated from the basins, but we will get back to that later. For the time being, you are being asked to identify the basins in the area, so that you know where the oil and gas came from. The way you do it is through buying and studying of magnetic and gravimetric surveys. When you think you have identified where the three basins are, you enter three different coordinates – one column and row for each basin centre – on the form on the home page. It should be noted that you shall enter coordinates – and not blocks – and that the coordinates you enter here are only the basin centres – and not the place you will search for oil and gas in.
Here is a real example of a gravimetric survey from a Finnish field in Europe. Gravimetric surveys show how the gravitational pull of the Earth differs over the area. , and are – as the magnetic surveys – carried out by aeroplanes with sensitive measuring devices. The reason gravity is not the same all over is that the rocks in the subsurface are not the same. Different types of rocks give different gravity pulls, and more specifically the sedimentary rocks in basins are not so dense as the surrounding crystalline rocks. Therefore, the lower the gravity pull, the higher the probability that there is a basin below, and vice versa. The red areas have the lowest gravitational pull. Thus the probability of finding hydrocarbons here is relatively high. The yellow areas have low-to-medium gravitational pull. Thus the probability of finding hydrocarbons here is relatively high. The green areas have medium gravitational pull. Thus the probability of finding hydrocarbons here is relatively medium. The light blue areas have medium-to-high gravitational pull. Thus the probability of finding hydrocarbons here is relatively low. The dark blue areas have highest gravitational pull. Thus the probability of finding hydrocarbons here is relatively low.
An example of a gravimetric quadrant survey The red areas have the lowest gravitational pull. Thus the probability of finding hydrocarbons here is relatively high. The yellow areas have low-to-medium gravitational pull. Thus the probability of finding hydrocarbons here is relatively high. The green areas have medium gravitational pull. Thus the probability of finding hydrocarbons here is relatively medium. The light blue areas have medium-to-high gravitational pull. Thus the probability of finding hydrocarbons here is relatively low. The dark blue areas have highest gravitational pull. Thus the probability of finding hydrocarbons here is relatively low. All in all, the basin areas are to be found around the Vilmikno areas. Thus our main focus will be in these areas in terms of oil and gas exploration.
Magnetic surveys show similar information as gravimetric surveys, and are carried out the same way. The sedimentary rocks in the basins have a lower concentration of magnetic materials than the surrounding crystalline rocks. Thus the sedimentary basins are the areas with the lowest magnetic field.
An example of a magnetic survey quadrant map. The purple areas have the lowest magnetic pull. Thus the probability of finding hydrocarbons here is relatively high. The yellow areas have medium magnetic pull. Thus the probability of finding hydrocarbons here is relatively medium. The light blue areas have highest magnetic pull. Thus the probability of finding hydrocarbons here is relatively low. All in all, the basin areas are to be found around the Pikku Rahkaneva areas. Thus our main focus will be in these areas in terms of oil and gas exploration.
Due to the natural variation between the magnetic and gravimetric characteristics of the structure, the centre location may vary. The task is then to identify the average centre, by interpolation of the different centres. Calculate the average centre, as the average centre between the gravimetric and magnetic centre: Average Row no = Row no of magnetic + Row no of gravimetric, divided by 2 Average Column no = Column no of magnetic + Column no of gravimetric, divided by 2 The average centre will then show in the middle.
When you have found out where you think the basin centres are, you enter your centre coordinates into the form on the home page. When you press Submit, the simulation receives your guesses. If there is a green line across the right hand side of the page when you have submitted, the coordinates have been registered in the system. You can change your mind as long as the deadline has not passed and enter altered coordinates and press the Update button below the form.
Once the simulation has been unpaused, you will receive a Notification in your mailbox, on the left-handside of the homepage. In the notification, you can see the basin coordinates chosen by each team and the number of knowledge points awarded to each team, based upon their submitted answers. If you look at the cell coordinates of one of the teams that was awarded close to 100 points, then you can see what the correct answers were.
Oil and gas is likely to be found close to these identified sedimentary basins. The next step is the First licensing round, where exploration licenses for blocks situated in one of these basins are being offered by the Government. Each team will be able to make bids for particular blocks. A block is a geographically two-dimensionally delimited area of the earths surface, assigned by the government. Your task now is to identify three blocks that your team believes to have the best prospects and submit license bids to the Government for them. To evaluate the blocks potential, you must identify if it has any pockets of hydrocarbons, and determine if there are any circumstances that would prohibit or limit the possibilities of exploration of the blocks resources. Your offer for the block must be wise. If it is too low, someone else may get it. If too high, you waste valuable cash, compared to the potential yield from the block.
This slide illustrates the relationship between the sedimentary basins you identified in the first task and the prospects which you will encounter in the second task. Oil and gas form as the result of a precise sequence of environmental conditions: The presence of organic material – like plants, algae and bacteria Organic remains being trapped and preserved in sediment The material is buried deeply and then slowly "cooked" by increased temperature and pressure. Rocks containing sufficient organic substances to generate oil and gas in this way are known as source rocks . Once it has formed, oil and gas moves away (migrates) from the source rock. This movement happens for two reasons. First the oil and gas expand to take up more room than the original organic matter therefore their pressure on the rock increases and they try to escape. Second, being less dense than the surrounding rock and water, they tend to rise upwards. The oil is held in pores of the rock and continue to rise upwards until it reaches the surface or a layer of impermeable rock (cap rock) and is trapped. A prospect is a subsurface structure that is likely to contain hydrocarbons, where There is a source rock , where the original oil or gas was generated. Porous migration rock allowing the hydrocarbons to move into the prospect A porous reservoir rock in which the oil and gas is held and An impermeable cap rock that traps the oil and gas in place
There are many types of traps formed by rock formations: The most common type of trap and the ones found in OilSim are Four-Way Closure Trap, a type of anticline trap that occur within the same layer which has been pushed up into an arch but where the hydrocarbons are stopped from migrating further upwards due to the cap rock. Fault traps are created where layers of rock slide up against each other and contain permeable and impermeable rock. The oil migrating through the impermeable rock is cut off by an impermeable layer and trapped against the fault. Stratigraphic traps kee p hydrocarbons in place due to changes in the rock type or sedimentary features of the area and an uneven distribution of formations. Salt Dome traps enable hydrocarbons to aggregate into pockets on both sides of the dome as stratigraphic traps, as well as above the dome as an anticline s trap.
Spawning grounds are fish breeding grounds, and therefore very sensitive to any pollution, derived from oil and gas exploration and production. In the real world, licenses are still offered where spawning grounds exist, but exploration and production activities are limited to times of the year when the fish are not breeding. However, in the OilSim simulation the Spawning Ground Survey covers the whole map and the red areas are spawning grounds and licenses WILL NOT be awarded for blocks that contain a red area. Even if a block contains only a very small red area the license will not be awarded. So looking at this map, if you submitted blocks 88 and 102 as 2 of your choices, neither of this blocks would be awarded licenses.
Since the CRS show the probabilities of prospects in only one particular horizon or layer, it is necessary to purchase the CRS for all 3 layers so that you can determine which area within the licensing area contains the highest probability of containing oil and gas. So on the CRS maps shown here the area circled in black on the OilSim map and each of the CRS shows that the area in question is within the licensing area and is green on all three CRS layers, indicating high probability of oil and gas on all 3 layers within the same area or blocks. Potentially an area that requires further investigation for individual prospects.
Geophysicists use the physical characteristics of rocks, their magnetic and gravitational properties and how sound waves travel through different kinds of rocks to help understand the structures below the Earth's surface. Survey ships and aircraft collect data and produce gravimetric, magnetic and 2d seismic surveys. Using different techniques allows scientists to locate particular rock formations that might contain trapped oil, including the 2d seismics which can help locate the traps. 2d seismic surveys in real life are available in rows and columns within a geographical area, following the path travelled by the ship or aircraft collecting the data. In OilSim the seismic information also follows the rows and columns, but is only available for every second row and column.
There are 3 types of data available when you order Seismic surveys in OilSim. Unprocessed data, is the raw data that is available fairly soon after the seismic providors have done the surveys Processed data gives you more information about the geological layers in the ground Interpreted date has been interpreted by geologists. These surveys identify the sealing and reservoir rocks, and possible fault lines in the geological structure. The traps in OilSim are either: anticlinal fault traps
To buy surveys, click on survey tab and then order the Seismic surveys from the survey shop. After you ’ ve clicked “ buy ” this screen will appear. The yellow box over the map allows you to buy all the seismic data for those particular blocks. So click and hold and move the box to the area you wish to purchase. Choose what area you want to buy. Decide if you want columns or rows Choose if you want processed or unprocessed surveys. Processed data takes more of your time, but you get better data Choose interpreted or uninterpreted data. Intrpretede data takes more of your time, but you get better data. Then order batch, The price of the order will change depending upon your requests and the data type you want.
When the “ batch process ” has reached 100% the process is finished. You ’ ll then be able to view the batch you bought in the centre of the page. The red circles on this slide are navigation buttons and allow you to see all your 2D seismic in small icons. To focus on one specific 2D seismic, click on that icon.
Try and find at least 5 prospects in the block that you are going to bid for. In this example the yellow circles show prospects for block 547. The reason that 4 areas have been marked is that the green line (reservoir rock) makes a “ peak ” and there is a sealing rock (the red line) above them making sure that the oil and/or gas doesn ’ t migrate to an other area.
Hear the area between the reservoir and the sealant rock has been shaded in to show you whether you still have a seal at the fault or a gap where leakage could occur.
However, you must remember that you are looking for the ” four-way trap ” , so you need to ensure that the peaks or bumps line up on both the column and row, where they intersect. In this slide you can see that a 2D seismic survey for a Column and also one for a Row. Now where they cross, or intersect there needs to be peaks, it is only then that there is likely to be a trap.
So lets recap on the things you need to do to solve this task wisely and give you the highest probability finding prospects. First – buy and review the ESA map to check which blocks you should completely avoid Secondly - buy all three CRS surveys ato study these closely to find out which blocks have the highest probability of prospects Thirdly – Buy and assess lots of 2D seismic surveys in order to identify particular blocks where there appear to be four-way traps and therefore the highest number of prospects. Finally – consider your preferences and reviewing the water depths of the blocks, since those with shallow water will be cheaper to drill in and therefore more economically viable in the long run from a production point of view.
So lets recap on the things you need to do to solve this task wisely and give you the highest probability finding prospects. First – buy and review the spawning ground map to check which blocks you should completely avoid Secondly - buy all three CRS surveys ato study these closely to find out which blocks have the highest probability of prospects Thirdly – Buy and assess lots of 2D seismic surveys in order to identify particular blocks where there appear to be four-way traps and therefore the highest number of prospects. Finally – consider your preferences and reviewing the water depths of the blocks, since those with shallow water will be cheaper to drill in and therefore more economically viable in the long run from a production point of view.
When the deadline has passed each team has one exploration teams. You can see a summary of the licensing round in a message in the Mailbox. There you can see who got which blocks for what amount, which blocks all the teams bid for, and how many credibility points each team got
Gentlemen, hold your horses! Exploration Drilling is not about going drilling into the ground. It is about careful planning the drilling operation , and foremost to spread the costs and risks involved upon many shoulders. Thus farm-outs are imperative activities before drilling itself can be conducted.
You need to buy and study 3D seismic interpretation in order to find out where to drill. Each 3D seismic interpretation shows the geological structure for one horizon of one of the license blocks. What you should look out for is four-way closure structural traps, as these are the only traps in OilSim.
Your primary target is to find the limits of each prospects, not just plounge the drill string into the middle of each reservoir. Thus you shall drill into the periphery of each prospect, not in the middle.
Farm-in and out is about spreading the risk, thus basic risk management must be applied: Risk Sharing.
When reviewing a farm-out offer you can either accept the amount or % the license owner requests, or amend the amounts to your own offer. Add a message to the seller explaining why they should choose your team and press “ Send offer ”
Financing – Is where a team is able to accept offers, and therefore receive money or “ finance ” for a % of their own blocks When a team receives a Farm-In offer it appears under financing on the right hand side of the homepage
By clicking on this offer the team can then accept or reject the offer. A partnership is established every time a license owner accepts an offer. You can farm in and farm out at any time from now on, but you need to sell at least 20% to be allowed to start drilling in the block that you operate. Note, that you on the license tab can get an overview of the licenses that you operate, the licenses that you have invested in, and all the other licenses. You are not allowed to drill before at least 20% of your license has been farmed out.
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 Remember you must have farmed-out 20% of your own block before you can drill.
When you have entered a partnership, you will pay your share of all future costs in the license. This includes your share of all exploration wells that are drilled. On the other hand, you will receive your share of the net value of any oil or gas that is found in the license. If you own 20% of a license you pay 20% of all costs, and you receive 20% of all license values. Even if there are other owners, it is the operator team that takes all decisions regarding acquirement of 3D seismic, drilling of wells, and testing of wells. When you are a partner in a license block, you get all information about the discovered oil and gas fields A team can farm-out up to 70% of each licence, but must keep 30%.
Before you begin to drill you need to know the water depth so that you choose the right type of rig. You can find this information by clicking on your block and scrolling to the bottom of the screen where a map of the whole block ’ s water depths are shown. By scrolling over each cell you can see the water depth for each particular cell.
The next task is to choose which rig to use to drill the exploration well, but you will need to know how deep the water is in the area you wish to drill, so check out the water depths under your block information. There are three types of rigs: jack-up rigs for shallow waters 100m deep, semi-submersible rigs for middle waters (600m deep) and drillships for the deepest waters. The rigs have different costs per day, and the drilling days depend on how deep you drill into the subsurface and which service providers you choose
In most cases there are fewer rigs than teams, so you need to be fast to get good and cheap rigs for your wells. When you order a rig you need to start using it within 20 minutes. If you do not use it within the 20 minutes, you will pay for 20 days of use. You can release a rig that you have ordered on the home page. The rig rates are dynamic, so that popular rigs tend to have increasing prices, while less popular rigs become cheaper.
Rig service providers are needed to operate the rig properly. Analysis, Shore base, Vessels, Well Services, Airways High-star-providers are expensive, but you may be more sure that the operation wil be smooth. Avoid though to use expensive providers everytime, as you will run out of money too soon. Medium-star-providers are medium-priced, as the risk involved are a bit higher than with the expensive ones. Few-star-providers are low-priced, and may be a good choice when you shall drill many and non-critical wells.
Place your drill string on a green cell. Red cells must be avoided.
Service Providers are as good and bad as any providers in the real world. You may end up paying a higher bill, than originally anticipated. You must watch out for “ red cells ” in the EIA, as you will be fined if you drill into protected cells.
As this figure illustrates, you can drill through all three horizons in one well. You can even drill a deviated well, so that the position is not exactly the same in all horizons. The deviation can be 1 cell for each horizon.
Inputting estimated cost of drilling gives you credibility points. You need to add all the costs of the rig and the service providers together and multiply this by the number of days you think it will take you to drill. The oil spill control is voluntary but costs 5% of the drilling amount per day but will earn you more knowledge points and cost you less to clear an oil spill if it happens. The oil spill control acts as a gas blow-out preventer too.
To determine how long it will probably take to complete drilling, check out the “ drilling Information ” tab.
Drilling is instantaneous in OilSim and this is an example of how the drilling results might look like: In this particular case the well was drilled through all three layers (horizons). Gas was found in the deepest layers, while no prospect was found in the topmost and middle layers. The area of the gas find is estimated to be between 1 and 9.4 square kilometers. The thickness of the field is estimated to be between 103 and 290 meters. The quality on a scale from 0 to 10 is estimated to be between 1.8 and 6.1. These three variables – area, thickness, and quality – together give a volume range of between 8 million and 674 million barrels of oil equivalent, MBOE. The 674 MBOE is what is possible with 10% probability, while the 8 MBOE is what is PROVEN. It is only the proven volume of 8 MBOE that we can use in the calculations of economic viability. Only if you discover a field – find Oil or Gas You decide whether you want more information about that field More information by doing a production test (and other tests) Tests costs. Tests take 10 days per field. Tests have the same day-rate as the drilling if you use the same providers.
Cost $100000
However, if you can get the proven volume up, the block might become economically viable. This is done through production testing, and appraisal wells When you have drilled the first well, you only have a small sample of the new-found oil or gas field. This is evident by the wide ranges of the area, thickness, quality, and volume variables. These wide ranges tell you that you actually do not know much about the field. After drilling and testing, your next step therefore is to drill another well – and test it. This is called an appraisal well. Normally it takes at least three or four wells into a field before the license block becomes economically viable. Sometimes it takes much more, and therefore you should not give up if the first wells into a field do not give any license value. However, you should give up if the upper boundaries of the field become so low that there is no chance that it becomes economically viable. This is often the case in deep-water blocks, where the CAPEX are very high.
So looking at another example of a different block. Here we can see 4 prospects that have had many appraisal wells drilled. Now the proven volumes are nearly the same as the possible volumes on 3 of the prospects.
So for the 4 prospects we have a Sales value of $1.473 billion , achieved through much higher proven reserves. We can deduct the expenses and have a positive value of our licence
If you run out of cash, you can apply for more money from the headquarters. This is done through Apply for more funds on the menu to the left.
Maximum amount of multiphase fluid in one year
Submit a plan for each reservoir.
Adding more wells to the reservoir will decrease the average flow rate per well Because any additional well will be in a less favourable location than the previous ones have a drainage area that overlaps with a previous well In OilSim, the reduction is 2% for each additional well
Your task is to maximize the value compared to the money you receive from the parent company This measurement is also known as ROI, or Return On Investment. Reservoirs are so close so we treat them as one big field. You are a field development team in charge of a license block You have been asked to plan the facilities to produce the oil and gas that has been found in the block You have a number of surveys to guide you in OilSim relate to both the flowlines which transports the fluids to the seabed and the risers which then transport it to the Platform.
Metocean surveys- Can be bought under the Survey tab. For each survey there is a legend showing the probability of the environmental hazard occurring in a particular block. On the Earthquake survey, a turquoise blue indicates 1- a low probability and a reddish brown colour indicates 10 – a high probability of one occurring. So if you own block 606 – you can see on the Earthquake map that the likelihood of earthquakes is MEDIUM risk. You need to look at each survey and determine the risks of each type of hazard for your block. So that you can then select a platform that can cope with these hazards.
Next, find the average water depth of your block by clicking on the Reservoir tab, Clicking the magnifying glass for the reservoir Then under the reservoir information the Block water depth is shown. Again, you need to know this to determine which platform would be suitable within your block.
For example Compare the applied discount factors in these scenarios. If you think that your projected cashflow is spot on with a project you could have a discount factor of 0% with an expected value of licence of 189M in total over 35 year period If you thought there were some unknown factors that you had to consider, applying a discount factor annually of 5% to the expected production would lead to a reduced value of 118M. And if you felt that there was still a large number of unknowns to be considered, then the compounding of the annual discount factor of 20% each year, would greatly reduce the value of the licence to 48M.
Click on Facilities Tab Choose your platform Scroll down to Settings-update platform requirements for your reservoir Amend number and size of flowline Select both a pipeline for the Oil storage tanks and Gas Processing Plant Update diameters for each pipeline Enter number of platforms required – this number might be more than 1- if the maximum capacities are lower than that needed to transport your oil or gas.
Estimated rate – bbl/d Flowline (acts as the flowline and riser size for the total multiphase fluid (all oil/gas/condensate and water). So you need to add the maximum amounts to be produced together to work out which flowline to use. Water – either goes out to sea after cleaning or used for injection into the well. In our scenario, we have a subsea template that collects all multiphase to travel to production facility. Then the pipelines are used for the oil, condensate and gas, so you need to consider the oil types and gas separately to work out which size should be used to take oil and condensate to the storage tanks and the gas to the Flowline: Metal pipe that connects the top of the wellbore to the mud surface-treating equipment that connects the wellhead to a manifold or to production facilities, such as heater-treaters and separators. Riser: A pipe that extends from the drilling platform down to the seafloor. Drilling mud and cuttings from the borehole are returned to the surface through the riser.
Choose whether you need oil terminal and gas storage Might be more than one available to choose from, so check out costs and distance to the facilities.
Red dots indicate that the fluids cannot flow through flowlines and pipelines which current plan Yellow dots indicate that there is flow but that there are some constraints in the existing plan Green dots indicate that the current plan will allow the fluid to flow freely – might not be optimal plan though
This chart shows the activities, tasks, processes that need to occur in order to reach first oil. Starting at the bottom of the chart, a number of activities need to take place before you can move onto the next activity. For those activities with a dotted line attaching them to another activity – you have a choice-choose one out of the 3 optional activities available. Where there is a full straight line, then the activity has to be completed before moving on to the next step/activity. Scrolling over a possible activity will show you the estimated time it takes to complete a task, the capital and operational expenses in completing each task.
Once you have chosen the activity you need to complete, you have to decide on which provider, taking into account the CAPEX and OPEX involved as this will affect your value. Also, consider the timeframe, bearing in mind, you are trying to reach First Oil within 11 periods of 180 days i.e.. 1980 days. Consider time v. cost Consider the inclusion of local content Resource analysis and try and reach First oil or gas within 5 years (20 quarters)
After reviewing the activity hierarchy and the possible resources. Submit a financial summary of your construction plan with: The anticipated capex The expected amount of content Which period you think you will reach first oil And press submit/update Use your printed materials to help you plan the project
For each period select a provider for each step that it is possible to complete in one period, bearing in mind that some activities cannot start until others are completed. Only pick those that can be started in this period.
After each period passes, there is an activity update under the Construction tab
On the right-hand side you can see the timeline for the project and whether you are on track for reaching First Oil before the end of the 21 periods. Each period of time is 90days and after each period of time there is an update to your activities to advise what has been accomplished, remains outstanding
At the end of all the 10 periods you will be advised if you have succeeded in achieving first oil and whether or not your company has attracted performance bonuses for your target CAPEX, local content amount and finishing on time.
We will give an Activity Hierarchy survey to teams that have purchased the survey
In this task you are producing your oil and gas and have to consider 3 scenarios that will affect your company ’ s strategy during the lifetime of your asset.
In each of these scenarios during the lifetime of your asset, you need to consider your company ’ s strategy and the market conditions presented in each scenario and decide which option would optimise your sales value.

Offshore e&p356 2012 Presentation Transcript

In t e r n e t B r o w s e r s FIREFOX OR INTERNET EXPLORER SAFARI OR CHROME
 www.oilsim.com
T o d a y ’sC h a lle n g e s
 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 million You can apply for more money later. Create value Measured 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 ValueChain U p s tre am
Challenges
Home page Columns e.g C1 and C54 Blocks are divided into smaller cells e g. R1C1 Rows e.g R15 and R97
 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.
G r a v im e t r ic s u r v e y s  Gravimetric surveys indicate changes in the gravitational pull of the Earth in different areas of the sub-surface.  Lower gravitational fields indicates likelihood of low density rocks –Sedimentary rocks, porous and hopefully containing hydrocarbons
 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
C50  Example: Top basin on both R100 maps  Calculate the midpoint between theC60 gravimetric and magnetic R110 centres found  = C55 and R105
 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.
T o d a y ’sC h a lle n g e s
 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
2. MIGRATION ROCKwhere hydrocarbonsare driven through 3. CAP ROCK1. SOURCE ROCK Impermeablewhere organic rock that stopsmaterial is put under migration ofsufficient pressure hydrocarbons 4. PROSPECT
 Geological “pockets”, that might contain hydrocarbons.A n t ic lin e S t r a t ig r a p h ic (c) OLF S a lttra p tra p dome F a u lt t r a p tra p
Red areasYou will not be awardedblocks that contain anyred spotsBlue areasBlocks in area may beawarded
CRS. Common Risk Segment surveys tell you about the probability of a structure in the block/cell containing oil or gas SurfaceLayer 3 Eocene1500m below the seabed Layer 2 Paleocene 2500m below the seabedLayer 1 Cretaceous3500m below the seabed
 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
What type of data do you want?  Columns or Rows  Unprocessed or processed data  Interpreted or notCan only buy maximum of 4 The yellow hatched area on blocks of data at a time to map can be clicked on and speed up processing dragged to blocks of interest
 Black arrows in red circles – navigate through the 2D seismic Line data in yellow square – Row 1 from Column 1-56
Leakage Sealant rock
Column RowBasin,Source Prospect, Reservoir
R e c a p o n Ta s k 2 Environmentally sensitive areas – blocks to avoid Common Risk Segment surveys – areas of higher probability of prospects 2D seismic – blocks with most structures Final tip - Check water depth - shallow water blocks
• Choose which blocks you want to bid for• For each block, say how many exploration wells you are committing to drill• Do NOT promise to drill more wells than there are prospects• An estimated cost is shown• You will initially only be awarded one block
 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
T o d a y ’sC h a lle n g e s
 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.
3 D S e is m icin O ilS im Prospects are no guarantee of oil or gas Layer 3 Eocene Layer 2 Paleocene Layer 1 Cretaceous
 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 thepercentage andtotal amount forhave agreed toofferMinimum$100,000 per %Add a messageto the sellerPress “Sendoffer”
When a team receives a Farm-In offer to appears underFinancing. This is where a team can receive finance ormoney 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 arig, you need tocheck your waterdepthFind this at thebottom of theBLOCK page
C h o o s e R ig Choose the right rigs for your water depths  Jack-up rigs for shallow waters  Upto 100m  Semi-submersible rigs for middle waters  Upto 600m  Drillships for the deepest waters  Over 600m Rig cost = drilling days * day rate
R igs  Limited number of rigs  20 minutes to use  Queues  Prices can change
Upto 9 Star quality- Good: normally costs more Bad: cheaper, but reliability is low, so you risk extra drilling time and extra costs
D r ill P o s it io n EIA: enviromental impact analysis shows where not to drill. Place your mouse where to drill
P e n a lt ie s & F in e s Certain problems can occur if Service Provider Selection is poor quality Other penalties can occur if you drill in areas indicated as problematic in the Environmental Impact Assessment As in real life, problems can occur randomly and these are also applied with fines levied accordingly.
Layer 3 EoceneLayer 2 PaleoceneLayer 1 Cretaceous
Oil spill orGas BlowoutcontrolEstimatedcost
 Volume Range in MBOE counts Test may increase Proven MBOE if oil or gas found
Discovered prospects
Assumptions
Value calculation 25% of 8 MBOE @ $50 12% $39.9M Expected costs if you developed the field (capex) and produced the oil (opex) If total expenses are higher than the sales value, the value of the license is zero
Appraisal From Probable volume to proven reserves
Increasing proven volumes Appraisal wells - proven reserves increase Range between proven and possible is decreased
Effect on calculation of licence 397 MBOE @ $50 including 25% recovery factor, 0.8 production factor, 10% discount factor) 12% $39.9M $6 of $50 = 12% tax) Expected costs if you developed the field (CAPEX) and produced the oil (OPEX) Now total expenses are lower than the sales value and so we have a positive licence value
 After your first drill in each well, reprocess seismic Decide which discoveries to drill how many appraisal wells intoUltimately, 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.
Challenges
 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
 Read the maximum well flow rate Most suitable Tube size Most suitable tube Highest well flow rate
1. Click the Reservoir tab2. Click the magnifyingglass for the reservoir 3. Study the data for the reservoir
 Click on Drilling Rig
1. Submit plans with different number of wells and tubing sizes Review Reservoir information after each revised plan Aiming to maximize sales value and minimize drilling costs, whilst increasing Recovery Factor You can amend your well plans until the deadline1. Credibility points – upto 100 kp if plans are optimal for all your reservoirs2. After deadline – Value of Licence will be adjusted based on final Well Plan submitted
Challenges
 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 W a v e h e ig h t s H u r r ic E a rthq ua k e a ne s s urve y le g e n d
1. Click the Reservoir tab2. Click the magnifyingglass for the reservoir 3. Average seabed depth visible here
Finding Production Profile
Combined Production Profile
Facility selection Click on facility List
 Value Shown = income less expenses Discount factors: 0%-20% 0% 5% 20% 189M 118M 48M
 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
Challenges
 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 or gas!
Where a solid line exists, the task belowChoose only 1 the line mustactivity – where a be completedDotted line before starting the task above the line
Considerations: Reach First Oil or gas within 11 periods of 180 days – TOTAL 1980 days Time V. Cost Local Content
Activity completed Activity delay – still ongoing Issue with activityProgress of activity
PART A Activity Hierarchy Survey – study activity dependencies Vendor report - compare providers/local content Prepare construction plan Submit Planning SummaryPART 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
Challenges
 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?

Offshore e&p356 2012

by Simprentis

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