OilSim Geology Rocks! Geology for Non-Geologists Stavanger 31 st Jan – 2 nd Feb 2012
Team work and negotiation
Critical decision making , analytical skills, multi-tasking
Learn through experience
Economically viable volumes- reducing uncertainty
Return on Investment
You start with $200 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
Money and Credibility
Complete Value Chain Upstream Oil and Gas Value Chain
Blocks are divided into smaller cells e g. R1C1 Columns e.g C1 and C54 Rows e.g R15 and R97 Home Page
Where and How to Find Hydrocarbons
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 geographic midpoint .
Challenge 1- Find basins
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
Low gravity are basins. High gravity are crystalline rocks
Gravimetric survey: South-east quadrant
Gravimetric Surveys in OilSim
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.
Sedimentary basins have low magnetic field
Non-basins have high magnetic fields.
Magnetic survey: North-west quadrant
Finding the Midpoint
Top basin on both maps
Calculate the midpoint between the gravimetric and magnetic centres found
= C55 and R105
Midpoint May Not be the Same C50 R100 C60 R110
3 basins – one 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 midpoints must be located to get full CPs.
Basin Midpoint Calculation
All teams have submitted their answers. Basin midpoints are located.
Message in mailbox. All teams have answers and CPs awarded.
Challenge 1- Solved
Get The Best Block
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 blocks
Challenge 2 - Licence Round
Process in a Licence Round
Invitation / announcement
Qualification ( Pre-qualification )
Preparation , data acquisition , evaluation
Establishment of partnerships
Priority , recommendation for bidding
Application , documentation , bid
Announcement of bidding results
Award , work programme, start-up
Success or failure-> discovery/ development/ production/ abandonment or relinquishment
Spawning Grounds Red areas You will not be awarded blocks that contain any red spots Blue areas Blocks in area may be awarded
Basic Petroleum Geology Prospecting Reservoir Trap and seal Sorce rock and migration/charge Basin Petroleum system Play Prospect Basin Screening
Source and Migration 1. SOURCE ROCK where organic material is put under sufficient pressure and temperature 2. MIGRATION ROCK where hydrocarbons are driven through 4. CAP ROCK Impermeable rock that stops migration of hydrocarbons PROSPECT 3. RESERVOIR ROCK Rock with porosity and permeability 5.STRUCTURAL OR STRATIGRAPHIC TRAP
Play Elements Mapping Reservoir Source Seal
Presence Quality Maturation Migration Timing Presence Capasity Play elements are converted to risk segment maps Highest probability Moderate probability Lowest probability Risk maps for each element are combined into total Common Risk Segment map - CRS
Common Risk Segment Layer 3 Eocene 1500m below the seabed Layer 2 Paleocene 2500m below the seabed Layer 1 Cretaceous 3500m below the seabed CRS - Common Risk Segment maps tell you about the probability of a prospect in the block containing oil or gas Surface
Traps (c) OLF Anticline trap Fault trap Stratigraphic trap Salt dome trap
Geological “pockets” , that might contain hydrocarbons .
Traps can be found with use of seismic data
A 2D seismic survey consists of cross- sections of the geological layers along either a column or a row
2D seismic surveys are used for locating prospects
2 D Seismic Surveys
2 D Seismic in OilSim Unprocessed Processed Interpreted Red is top of the sealing rock Green is top of the reservoir rock PROSPECT
Order 2D Seismic
Which type of data do you want?
Columns or Rows
Unprocessed or processed data
Interpreted or not
You can only 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
2D Seismic in OilSim Red is top of the sealing rock Green is top of the reservoir rock PROSPECT
Acquired 2D Seismic 532 533 534 546 547 548
R17 R19 R21 R23 R17 R19 R21 R23 Prospect Counting How Rows Work 532
How many prospects can you see in each block?
1 1 2 3 4 5 6 2 5 6
Text Anticline and Fault Traps Leakage
View the Seismic
Black arrows in red circles – navigate through the 2D seismic
Line data in yellow square – Row 1 from Column 1-56
Estimated Cost Oil spill or Gas Blowout control Estimated cost
Proven volume (MBOE) counts
Test may increase proven volume
Remember to tick the boxes!
After Testing Proven Upside potential
Reinterpretation of Seismic
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 licence is zero
From Probable volume to proven reserves
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
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, test and reinterpret 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 CP for each $100,000 applied for.
Answer three questions:
Expensive money if less than 10 credibility points: Apply for cash and be fined $5million for each $20million requested.