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PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
PetroChallenge Norway 2010
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PetroChallenge Norway 2010

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  • 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 Field development and Production is about actually taking the oil or gas out of the subsurface.
  • So this is what it looks like when you are trying to find the midpoints for the 3 basin centres.
  • 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.
  • To determine which blocks are likely to offer the greatest return on investment, an analysis of data is needed. This analysis can be split into 3 parts:Finding out where you are not allowed to explore, areas that are environmentally sensitive – this means researching the Spawning grounds surveyFinding out where geologists have identified subsurface structures that indicate higher probabilities of hydrocarbons. These structures are called Risk Segments. All the risk segments are combined into a common survey, the Common Risk Segment map (CRS map) which shows areas of high and low probability of hydrocarbons. Finding out where the hydrocarbons are “trapped” using the 2D seismic surveysThe combination of this analysis will help you decide which blocks are the most likely to have the best potential hydrocarbon reserves and therefore be the blocks you should be submitting bids for.
  • In real life to assess the exploration risks and prospects on a bain scale, geologists use “Basin and Play Fairway Analysis” and is conducted using special GIS software and other specialist programmes. In OilSim this analysis has been simplified into one Common risk segment map to show the probability of hydrocarbons in an area. The geologists ask a number of questions to determine the probability of finding oil or gas, including:Is there a sedimentary basin and a migration route into the prospects in the area?Is there porous reservoir rock so that the oil or gas can be stored?Is there a sealing rock, so that the oil and gas can be trapped?The CRS map helps to answer these questions by combining a number of maps, surveys, charts and data analysis into one map and represents the probability of finding oil and gas in a particular geological layer or horizon.If the answers to all 3 questions mentioned are ”YES”, then the area is shown as green – a high likelihood of finding hydrocardonsIf one is negative, then the area is shown in orange – with a medium probabilty of hydrocardonsIf the answers to 2 or 3 questions are “NO”- then the area is red and has a low probability of containing oil or gas.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.
  • Seismic surveys are made from sound waves that are sent into the subsurface, reflected, and measured when they get back to the surface.This slide shows an example of a real seismic line. It shows a cross-section of the subsurface with the blue and red lines indicating changes in velocity of the wave and therefore changes in geological structures in the subsurface.The black, red, and green lines are lines added as interpretation of the data by geologists.black lines are so-called faults, which have happened for instance after earth quakes or other dramatic geological events.green lines are where geologists think the reservoir rock beginsred lines are where the geologists think the sealing rock begins In this particular case there is a prospect indicated under the orange arrow, within the grey triangle.
  • Here 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.
  • When collecting 2D seismic for an area, the data is collected for both the rows and columns.Now when you are looking for a trap, you first find your sedimentary basin. CLICK Lets use a cake as an example. You want to choose the piece of cake that has the most cream or jelly, make sure your slice will have the most. How can you do this?CLICKWell if you cut the cake in half you can see if any part appears to have more cream or jelly in the layer, but how do you know that the cream or jelly is thicker in the whole slice?CLICKThe only way to find out is to make another intersecting cut, or make a slice and see if the cream or jam continues to be thicker in a particular part the whole way through.
  • Corporate social responsibility is the term used for explaining how companies impact the environment, consumers, employees, communities, stakeholders and all other members of the public sphere in the areas in which they operate. The attitude and behaviour of a company affect’s their reputation, the manner in which it is seen as an employer, it’s credibility in the market place and wider world and therefore, has a direct affect on its share price.Oil and gas companies are no different to any other large organisation that need to consider their actions on the world stage. The reasons for doing this are debatable, for example:Tax advantagesConsideration in licensing roundsBe seen in a better public lightBe seen as a considerate employer Being clear on responsibilities to the public/governmentWhatever the reasons for having a CSR programme, there can be a wide number of benefits for a variety of groups. In OilSim, before each licensing round, companies are going to be able to participate in CSR projects which will enable them to earn additional credibility points, that are looked after during the license bidding process.Also, just like in Norway in real life, the responsibility of a company to commit to a well drilling programme, to ensure that the government and the wider public will benefit from the oil and gas exploration process, companies will have to set a work programme as part of their licence bid. This means that when a team chooses which block it wants to be awarded a licence for, it will promise to drill a certain number of wells in an attempt to find the oil and gas in the block.
  • So after completing each project, your company will need to decide, whether it wishes to complete any more before concentrating on the remainder of the licensing round bidding process. You do not have to spend all the $30million open to CSR projects, in fact, on the CSR page, you can see how much of your budget you have spent on CSR, how much is remaining of this particular budget and how many points you have earnt in total on CSR. CSR funds that you don’t spend in one round are transferred to the next one.If you wish to continue and complete more some projects, just review the suggested CSR projects and initiate the ones you are interested in.
  • Now there are a number of suggested projects, some more worthwhile than others, depending upon the priorities and interests of the people working in each company.CSR is about caring for the local society – and making a difference for the people living where you operateNot all projects are soundBribery does not paySome projects cost a lot, but do not give so much returnSome projects are riskier than others
  • Before each licensing round, a team is able to spend up to $30 million on CSR projects that will earn them more credibility points. However, the $30million comes from the whole company budget and so companies will need to decide on what is more important, cash or credibility points and try and find a balance their teams are happy with.So to determine what companies should spend their CSR budget on, click on the CSR tab. Here a number of projects are listed.Some are grayed out, because the team does not have enough CP, enough CSR budget, or enough cash to do themEach has a cost, and a number of possible outcomes - Each outcome has a probability and either negative or positive CPIn the CSR tab you can see the minimum and maximum CP you can get, as well as the probability for getting the maximum CP
  • So in this example, a company is able to set up a Geoscience Institute with a local university and there is no requirement for them to already have CPs- it shows as zero.The project will cost $8million but might also help provide the company with a pool of geologists, geophysicists it can employ in the future. So if the plans for the Institute go well, the company will earn itself 40 Credibility points. Now because of project planning, local politics and building regulations etc, there is probability that the project will be completed and successful of 60%, so a 40% chance of something not working out and the institute not being established.So, if everything goes to plan the company will earn 40CPs and be well known for being involved in the new Geoscience Institute, and be well worth the $8million investment.But if it goes wrong, they will still have to pay $8million, but will be awarded 0 CPs.If you decide this is the project you want to invest in then click on the “Initiate” button.You cannot initiate a project if it has the potential to make your CP’s go into negativeYou cannot initiate a project if you don’t have the cash for itEach project can only be run once per team
  • A pop up box appears to check that you definitely want to spend your money, once you click OK you cannot get your money back.If you realise you chose the wrong project, click on cancel to take you back to the previous screen.
  • Once intiated, you will immediately be informed whether the project was a “Success” or “Failure” as the project moves to the top of the CSR page, under Completed CSR projects.Also, on the “Credibility” page, you are able to see all the Credibility points that a team has been awarded and the reasons why, throughout all the challenges in OilSim, including the CSR projects.
  •  - You can get extra CP for doing CSR projectsTeams choose 3 blocks to try and increase the chances of getting a block they think has good prospects, but once all the bids are in and the government has evaluated the bids, each team will be awarded one block.License bids are evaluated according to the following formula: CP (from 1st challenge and CSR) + 100 * wells committed
  • So teams select the blocks they want and submit bids in order of preference. The block with the most “Wells committed” is considered to be the preferred block, even if not entered into first Block.A team can promise to drill between 1 to 4 wells. The Bid is disregarded if a team commits to more wells than there are prospectsWhen deciding who gets which blocks, OilSim looks at the accumulated credibility points and adds 100 points for each well committed. The accumulated points at this point include credibility points from the find basin task and credibility points from completed CSR projects, but does NOT include any credibility points for choosing good blocks. AFTER deciding who gets which blocks, each team gets additional credibility points based on how good the blocks you bid for were. The maximum here is 300 credibility points. 
  • In this example, you are able to drill one exploration well, since the drill can deviate by one cell as it progresses through the geological layers. So you can reach the prospect in R37 in the Paelocene and in R38 in the Cretaceous.
  • Bidding points are used to evaluate the licence. CPs awarded are based upon how good the blocks are.Remember a bid is disregarded if a team commits to more initial exploration wells than are needed to reach all prospects.When deciding who gets which blocks, OilSim looks at the accumulated credibility points and adds 100 points for each well committed. The accumulated points at this point include credibility points from the find basin task and credibility points from completed CSR projects, but does NOT include any credibility points for choosing good blocks. AFTER deciding who gets which blocks, each team gets additional credibility points based on how good the blocks you bid for were. The maximum here is 300 credibility points. 
  • 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.
  • 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
  • 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 blocksRemember you must have farmed-out 20% of your own block before you can drill.
  • If you decide you no longer want to make an offer to a team, or you realise that an offer is not going to be accepted by another team. You need to take the offer back so that the money you were going to invest in that team, does not sit with the bank, but is returned to you.To do this click on the Review Farm in button, next to the licence, for which you want to take the offer back.
  • Then click on “Take Back” and the money, in this case $1,000,000 will be returned to you.
  • 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, semi-submersible rigs for middle waters and drillships for the deepest waters. When choosing the rig ,, and.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.
  • 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.When we get to the drilling phase and we get to drill exploration wells, the wells can go through all three horizons.If you choose to drill to the bottom most horizon, whatever is in the horizons above will be discovered as well.Only one in five prospects actually contain oil or gas, so you will encounter a lot of dry prospects.Thus, it makes sense to look out for prospects that are on top of each other in the 2D seismic surveys, as this increases your chances in finding something.
  • To determine how long it will probably take to complete drilling, check out the “drilling Information” tab. The water depth is the distance from the water line to the seabed.Layer 3 is approximately 1500 meters below the seabed, layer 2 is 1000 meters further down, and layer 1 is 3500 meters below seabed.
  • Inputting estimated cost of drilling gives you credibility points, since you are keeping an eye on your accounts. 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.
  • When you have discovered a field the first decision you need to make is whether you want more information about that field right away and BEFORE you drill another exploration well.You can get more information by doing a production test, which is a process in which you try to produce oil or gas from the field.In OilSim production tests take 10 days per oil and gas field and you use the same providers as before.
  • However, if you can get the proven volume up, the block might become economically viable.This is done through production testing, and appraisal wellsWhen 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.
  • Transcript

    • 1.  You are an exploration team in charge of a new petroleum province.  Multidisciplinary challenge: Enhance your overall understanding of petroleum exploration and field development.  Create a Return on Investment
    • 2.  You start with $200 million  Create value Net value of the oil and gas discovered MINUS all costs involved Credibility points awarded Sensible decisions and correct answers CPs are a measure of ability and credibility Considered when bidding for blocks Used when applying for funds
    • 3.  Where and how to find hydrocarbons  Corporate Social Responsibility  Licensing rounds  Farm-in and Partnerships – negotiations  Drilling rigs  Sub-contractors  Environmental issues  Economically viable volumes  Team work, Critical decision making
    • 4. Oil Gas
    • 5.  www.oilsim.com
    • 6.  www.oilsim.com
    • 7. Columns e.g C1 to C112 Rowse.g.R1toR144 Block Blocks are divided into 64 smaller cells e g. R52C110
    • 8.  Challenge: Find three sedimentary basins  Procedure:  Buy and study magnetic and gravimetric surveys  Submit the coordinates for each centre  Column and row number for each basin centre
    • 9.  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
    • 10. Survey shop Gravimetric survey of North-west area
    • 11.  Magnetic surveys show anomalies in in the expected magnetic field of the Earth in particular areas.  Sedimentary rocks in the basins have a lower concentration of magnetic materials and lower magnetic field than the surrounding crystalline rocks.
    • 12.  Magnetic survey: North-west quadrant
    • 13.  All four quadrant surveys in map context
    • 14.  Locate edges of the continous basin structure  Locate the diagonals and thus basin centre
    • 15.  Example: Top basin on both maps  Calculate the midpoint between the gravimetric and magnetic centres found  = C55 and R105 C50 R100 C60 R110
    • 16.  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 knowledge points.
    • 17. Message in Inbox:  Shows results  Answers submitted  CPs awarded
    • 18.  The government has decided to put the blocks in one of the basins on offer.  Challenge  Determine 3 best blocks to bid for  Initiate Corporate Social Responsibility projects  Commit to Exploration drilling programme Licensing area
    • 19.  Any restrictions involved? - Spawning grounds  What are we looking for? - Prospects  Where do we find prospects?  In basins, where hydrocarbons have been  1) are produced and 2) trapped  How do I find them? - Geoscientific analysis  Common Risk Segment maps, 2D seismic
    • 20. 1. SOURCE ROCK where organic material is put under sufficient pressure 2. MIGRATION ROCK where hydrocarbons are driven through 3. CAP ROCK Impermeable rock that stops migration of hydrocarbons 4. PROSPECT
    • 21. (c) OLF Anticline trap Fault trap Stratigraphic trap Salt dome trap  Geological “pockets”, that might contain hydrocarbons.
    • 22. Red areas You will not be awarded blocks that contain any red spots (spawning grounds) Blue areas Blocks in area may be awarded
    • 23. 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 surveys tell you about the probability of a structure in the block/cell containing oil or gas Surface
    • 24.  Traps can be found with seismic surveys and sound waves bouncing off structures  2D seismic survey is a vertical cross section of the geological layers along either a column or a row
    • 25. Unprocessed Processed Interpreted Red is top of the sealing rock Green is top of the reservoir rock
    • 26. What type of data do you want?  Columns or Rows  Unprocessed or processed data  Interpreted or not Only buy maximum of 1 block of data at a time to speed up processing
    • 27.  It takes time to process your request  Created to order  Moves to surveys once processed
    • 28.  Red circles – navigate through the 2D seismic  Yellow square – Row 1 from Column 1-56
    • 29. Leakage?
    • 30. Leakage?
    • 31. Column Row Prospect, ReservoirBasin,Source
    • 32.  Corporate Social Responsibility  Affects a company’s reputation and their credibility  Increase Credibility by initiating CSR projects  CSR points considered when bidding for a block  Commit to work programme, as part of licensing programme  State how many exploration wells you promise to drill.  Bids are evaluated based on work programme and team credibility
    • 33. CSR summary
    • 34.  Sport sponsorship  Geoscience Institute  Bribery  Orphanage  Business development  Wind mill  University exchange programme  Safety training center  Fact finding mission  Procurement training  Park  Environmental assessment  Primary school computers  Wave energy plant  Advertisements  Social welfare study  TV documentary  Airline frequency  Business simulation  Support singer
    • 35. • Max Round spend: $30M on CSR projects • Each project: Financial cost and CPs • Projects in grey: not enough cash or CPs to do • Outcome: Positive/negative CPs earnt on completion
    • 36. Teams can increase their competitive position by initiatingCSR projects
    • 37. Completed projects Credibility Point page
    • 38.  Choose 3 blocks with good prospects  Commit to a number of exploration wells  Bids evaluated using the following formula: Each well is worth 100 Credibility Points Bidding points = CP + 100 * No. of wells committed  If 2 teams choose the same block and same no. Of wells – the team with the highest CPs will be awarded the block  Government awards one block per team
    • 39.  Select number of exploration wells that are to be drilled  1-4 wells  Team’s first choice block = block with most committed wells Penalties:  Bid disregarded if overcommit no of exploration wells  Minus 10 credibility points for each bid where the number of committed wells is higher than the number of prospects
    • 40. Leakage?
    • 41.  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
    • 42.  Message sent to all Results and CPs  One license per team
    • 43.  The headquarters of your company has evaluated the license that you were awarded.  Although the possibility of finding oil is fair, the costs involved are large.Thus the headquarters want you to spread the risk.  Challenge:You shall farm-out minimum 20% from your license – and farm-in as much as you can in other good licenses.
    • 44.  Acquire 3D Seismic interpretations for the block you operate, and study the results from the licensing round  Farm-out: Get others to invest 20% or more in your license – you can send them surveys  Farm-in: Send offers to other teams to buy shares in their viable licenses. Submit an offer for each viable license, with amount offered and share wanted in whole %.
    • 45.  Shows the subsurface structure in a cube.
    • 46. Layer 1 Cretaceous Layer 2 Paleocene Layer 3 Eocene Prospects are no guarantee of oil or gas
    • 47.  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.
    • 48. Either accept the amount or % the license owner requests, or amend the amounts to your own offer Add a message to the seller Press “Send offer” Minimum of $100000 per %
    • 49. 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
    • 50.  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.
    • 51. 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
    • 52.  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
    • 53. •Before choosing a rig, you need to check your water depth Find this at the bottom of the BLOCK page
    • 54.  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
    • 55.  Few: limited number of rigs available.  If you get one: start using it within 20 minutes.  If you don’t: wait in a queue, if another team is using the rig.  Price can change: rig day rates are dynamic.
    • 56. Upto 9 Star quality-  Good: normally costs more  Bad: cheaper, but reliability is low, so you risk extra drilling time and extra costs
    • 57.  EIA: enviromental impact analysis shows where not to drill.  Place your mouse where to drill
    • 58.  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 ImpactAssessment  As in real life, problems can occur randomly and these are also applied with fines levied accordingly.
    • 59. Layer 1 Cretaceous Layer 2 Paleocene Layer 3 Eocene
    • 60. Earn extra CPs by calculating the estimated drilling cost Oil Spill control/ Gas Blow out
    • 61.  Proven volume (MBOE) counts  Test may increase proven volume  Remember to tick the boxes!
    • 62.  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.
    • 63. 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
    • 64.  From Probable volume to proven reserves
    • 65. 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
    • 66. Cash : Initial $200million investment Funds from partnerships Funds from the bank Value: Valuation of licences (operators and partners) based on oil and gas found less expected costs if these licences were to be developed
    • 67.  Click on Apply for More FundsTab.  1 CP for each $100,000 applied for.  Answer the questions: All correct gives cash and you can keep CPs. One wrong gives cash and you keep ½ of your CPs.Two wrong gives ½ cash and you lose all CPs. All wrong, you get no cash and lose all CPs.  Expensive money if less than 10 credibility points: Apply for cash and be fined $5million for each $20million requested.
    • 68.  Narrow uncertainty: Drill appraisal wells to get proven volumes  Drill into other prospects to find more proven volumes.  Farm-in and -out: Get into other good blocks.  Two additional licensing rounds: Repeat the processes.  Money: Apply for more money, if you run out of cash.

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