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Onshore 3.4 template presentation

  1. 1. Introduction to Onshore Exploration<br />
  2. 2. Your Challenge Today<br />You are an exploration team in charge of a new petroleum exploration area. <br />Your task is to find and drill for new reserves and to maximize return on investment (ROI).<br />You will need to work as a company as well as in partnership with others.<br />You will show your new understanding of exploration and be rewarded through credibility Points.<br />
  3. 3. Finances<br />You will start with $50 millionYou can apply for more later.<br />Creating ValueProfit is measured by the net value of the oil and gas fields discovered MINUS all costs involved.<br />Winning team has highest ROIROI is calculated as Value created DIVIDED by Funds received.<br />
  4. 4. Credibility Points<br />You get CPs for doing wellduring the simulationCorrect answers and sensibledecisions are awarded with CPs<br />CPs are a measure of ability and credibilityA team’s CPs are considered when bidding for blocks and applying for funds from the HQ<br />
  5. 5. You will learn<br />Where and how to find hydrocarbons. Various surveys during exploration.<br />Licensing rounds. Farm-in and Partnerships.<br />Drilling rigs and Sub-contractors.<br />Environmental issues.<br />Economically viable volumes. Reducing uncertainty.<br />Team work and negotiation. Critical decision making, analytical skills. Multi-tasking.<br />
  6. 6. Oil and Gas Industry Value Chain<br />
  7. 7. Login<br />www.oilsim.com<br />
  8. 8. Main screen<br />
  9. 9. Map<br />Columns e.g C1, and C54 <br />Rows e.g. R35 and R163<br />Block<br />Blocks are divided into smaller cells<br />e g. C57,R73<br />
  10. 10. First challenge<br />Challenge: Find three sedimentary basins in the area. Basins are sedimentary rocks in the deep subsurface where oil and gas has been generated.<br />Procedure: Buy and study magnetic and gravimetric surveys; and to submit the coordinates, column and row number for each basin centre.<br />
  11. 11. Gravimetric surveys<br />Gravimetric surveys show the gravity in the sub-surface. Measured by airborne sensors.<br />Sedimentary rocks have lower densities than the surrounding crystalline rocks. Low gravity means high probability of a basin below.<br />Low gravity are basins. <br />High gravity are crystalline rocks<br />
  12. 12. Surveys in OilSim<br />
  13. 13. Real gravimetric survey<br />
  14. 14. Survey in Oilsim<br />Gravimetric survey:South-east quadrant<br />
  15. 15. Survey in OilSim<br />All four quadrant surveys in map context.<br />
  16. 16. Magnetic surveys<br />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.<br />Basins have low magnetic field<br />Non-basins have high magnetic fields. <br />
  17. 17. Real magnetic survey<br />
  18. 18. Survey in OilSim<br />Magnetic survey:North-west quadrant<br />
  19. 19. Survey in OilSim<br />All four quadrant surveys in map context.<br />
  20. 20. Gravimetric survey analysis<br />Locate edges of the continous basin structure (yellow area)<br />Locate the diagonals and thus basin centre<br />
  21. 21. Magnetic survey analysis<br />Locate edges of the continous basin structure (purple area)<br />Locate the diagonals and thus basin centre<br />
  22. 22. Finding the Midpoint<br />
  23. 23. Centre may not be the same<br />Example:<br />Top basin on both maps <br />Calculate the midpoint between the gravimetric and magnetic centres found<br />= C55 and R105<br />C50<br />R100<br />C60<br />R110<br />
  24. 24. Enter decision<br />
  25. 25. Centre Midpoint calculation<br />3 centres – one Centre midpoint for each basin<br />Example: C55, R105<br />Solve before deadline. All submissions are evaluated after the deadline (and not before).<br />You may get 0-100 CPs. All three centres must be located to get full credibility points.<br />
  26. 26. Solve task 1<br />
  27. 27. Task 1 solved<br />All teams have submitted their answers. Basin centres are located.<br />Message in Inbox. All teams have answers and CPs awarded.<br />
  28. 28. Challenge 2 : license round<br />Sedimentary basins may contain oil and gas.<br />The government has decided to put the blocks around one of the basins on offer.<br />Challenge: Identify the 3 most promising blocks and offer an amount for each of them.<br />
  29. 29. Challenge 2 : license round<br />Any restrictions involved? Yes, you need to watch for Environmentally Sensitive Areas.<br />What are we looking for? Hydrocarbon Prospects. <br />Where do we find prospects? In sedimentary basins<br />How do I find them? Interpreting 2D seismic and Common Risk Segment maps.<br />
  30. 30. Source and migration<br />2. MIGRATION ROCK<br />where hydrocarbons are driven through<br />3. CAP ROCK<br />Impermeable rock that stops migration of hydrocarbons<br />1. SOURCE ROCK<br />where organic material is put under sufficient pressure<br />4. PROSPECT<br />
  31. 31. Traps<br /><ul><li>Geological “pockets”, that might contain hydrocarbons.</li></ul>Anticline trap<br />(c) OLF<br />Stratigraphic<br /> trap<br />Salt dome trap<br />Fault trap<br />
  32. 32. Environmentally Sensitive Areas<br />
  33. 33. Sensitive Rangelands Survey<br />Red areas<br />You will not be allowed to bid, drill or operate in any of the red areas. <br />Green areas<br />Blocks in area may be awarded.<br />
  34. 34. Common Risk Segments<br />Is there a sedimentary basin and a migration route into the prospects in the area?<br />Is there porous reservoir rock in the area, so that the oil or gas can be stored?<br />Is there a sealing rock in the area, so that the oil and gas can be trapped?<br />If all are positive, then green<br />If some negative, then orange<br />If mostly negative, then red<br />
  35. 35. Common Risk Segment<br />CRS. Common Risk Segment surveys tell you about the probability of a structure in the block/cell containing<br /> oil or gas<br />Surface<br />Layer 3 Eocene<br />1500m below the surface<br />Layer 2 Paleocene<br />2500m below the surface<br />Layer 1 Cretaceous<br />3500m below the surface<br />
  36. 36. 2D Seismic surveys<br />Traps can be found with seismic surveys<br />2D seismic survey is a cross section of the geological layers along either a column or a row.<br />2D seismic surveys are used for locating prospects.<br />
  37. 37. Real Seismic<br />                                                                                                                                                                       <br />
  38. 38. Real Seismic<br />
  39. 39. OilSim of 2DSeismic <br />Unprocessed<br />Processed<br />Red is top of the sealing rock<br />Green is top of the reservoir rock<br />Interpreted<br />
  40. 40. Anticlinal traps<br />
  41. 41. Fault traps<br />Leakage<br />
  42. 42. Leakage?<br />Leakage<br />Sealant rock<br />
  43. 43. Order seismic <br /><ul><li>Buy 2D seismic from the survey shop</li></li></ul><li>Order Seismic<br />What type of data do you want?<br /><ul><li>Columns or Rows
  44. 44. Unprocessed or processed data
  45. 45. Interpreted or not</li></ul>Only buy maximum of 1 block of data at a time to speed up processing<br />
  46. 46. Order Seismic<br /><ul><li>It takes time to process your request </li></li></ul><li>View the Seismic<br /><ul><li>Red circles – navigate through the 2D seismic</li></li></ul><li>Cross-sections<br />Column<br />Row<br />Prospect, Reservoir<br />Basin,Source<br />
  47. 47. License Round in OilSim<br />Minimum bid is $250K<br />Maximum bid is $7.5M<br />Enter numbers without commas (ex: 250000)<br />You will bid for 3 licenses but each team will only be awarded one license<br />Highest bid wins the license<br />If two teams bid the same, the team with the most CP’s gets it<br />Random license awarded if none of your bids are high enough<br />Submit your bid before the deadline!<br />
  48. 48. Enter bids<br /><ul><li>Three different blocks
  49. 49. Three bids
  50. 50. Example-</li></ul>Block 1123<br />Bid 250000<br />
  51. 51. Recap on Challenge 2<br />Study Sensitive Rangelands Survey to see which blocks to avoid<br />Use Common Risk Segment surveys to see which blocks to examine closer (look for green)<br />Buy and study many 2D surveys to identify which ones have the most potential traps, as well as the biggest traps.<br />
  52. 52. Solve task 2<br />
  53. 53. Task 2 solved<br />Message sent to all teams with the results<br />Credibility Points are given for prosperity of the blocks you bid for<br />Every team has got one exploration license<br />
  54. 54. Challenge 3 : Exploration Drilling<br />Company management has reviewed the licence that you were awarded and the potential cost to drill a well.<br />Although the possibility of finding oil is fair, the costs involved are large. They have asked you to spread the risk. <br />Challenge: Farm-out a minimum of 20% on your license and farm-in as much as you can on other good licences.<br />
  55. 55. Partnerships<br />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.<br />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.<br />
  56. 56. Challenge 3.1 Partnering<br />Acquire 3D Seismic interpretations for the block you operate, and study the results from the licensing round-can send under “surveys” to possible partners<br />Farm-out: Get others to invest 20% or more in your license<br />Farm-in: Send offers to other teams to buy shares in their viable licences. Submit an offer for each viable licence, with amount offered and share wanted in whole %.<br />
  57. 57. Real 3D Seismic<br />Shows the subsurface structure in a cube.<br />
  58. 58. 3D Seismicin OilSim<br />Layer 3 Eocene<br />Layer 2 Paleocene<br />Layer 1 Cretaceous<br />
  59. 59. Licences<br />
  60. 60. Farm-in<br /><ul><li>Enter the total amount and the total % you want to buy
  61. 61. Add a message to the seller
  62. 62. Press “Send offer”
  63. 63. Min bid is $25000 and max is $1250000 per %</li></li></ul><li>Financing<br />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 <br />
  64. 64. Farm-in<br />license OWNER decides whether to ACCEPT or REJECT the offer<br />Partnerships established every time a license owner accepts an offer.<br />Overview: On the main page, you can see all licenses. 1) licenses you operate, 2) licenses you have invested in, and other licenses.<br />
  65. 65. Investing<br />All your farm-in offers to other teams are shown under “Investing” on the right-hand side of the homepage . <br />This is where a team offers investments to other teams for a % of their blocks<br />
  66. 66. Partnerships<br />Partners pay a proportional share of all future costs incurred by the partnership<br />Partners receive a proportional share of the net proceedings from any oil or gas found on the license. <br />The operator team makes all decisions regarding acquiring 3D seismics, drilling of wells and testing of wells. <br />Information: partners in a block can access info about drilled wells and discovered oil and gas fields.<br />
  67. 67. Ready to drill<br />Click on drill<br />
  68. 68. Choose rig<br />Truck-mounted Rigs<br />Light Duty Rigs<br />Heavy Duty Rigs<br />
  69. 69. Choose Rig<br />Max drilling depth is important<br />Rig cost = drilling days * day rate<br />
  70. 70. Rigs<br />Few: limited number of rigs available.<br />If you get one: start using it within 20 minutes.<br />If you don’t: wait in a queue, if another team is using the rig.<br />Price can change: rig day rates are dynamic.<br />
  71. 71. Service providers<br />9 Star quality:<br />Good- costs more<br />Bad: - cheaper, but reliability is low <br />5 types of providers- Construction and Maintenance , Logistics, Well Services, Camp Services and Analysis<br />
  72. 72. Penalties & Fines<br />Certain problems can occur if Service Provider Selection is poor quality<br />Other penalties can occur if you drill in areas indicated as problematic in the Environmental Impact Assessment<br />As in real life, problems can occur randomly and these are also applied with fines levied accordingly.<br />Oil spill control – 5% of overall drilling costs<br />
  73. 73. Environmental Impact Assessment<br />
  74. 74. Drill Position<br />EIA: enviromental impact analysis shows where not to drill.<br />Place your mouse where to drill<br />
  75. 75. Drilling Position<br />Layer 3 Eocene<br />Layer 2 Paleocene<br />Layer 1 Cretaceous<br />
  76. 76. Drill Position<br />Too deep for the chosen rig.<br />
  77. 77. Estimated cost<br />
  78. 78. Drilling Days<br />
  79. 79. Drilling Result<br />Proven volume (MBOE) counts<br />Test may increase proven volume<br />Remember to tick the boxes!<br />
  80. 80. Testing<br />Only if you discover a field – find Oil or Gas<br />You decide whether you want more information about that field<br />More information by doing a production test (and other tests)<br />Tests costs. Tests take 10 days per field. Tests have the same day-rate as the drilling if you use the same providers.<br />
  81. 81. Value and ROI <br />Volume Range, e.g. 1-897<br />Proven Reserves e.g. 1<br />
  82. 82. Value and ROI <br /><ul><li>Calculation of licence value
  83. 83. Sales value</li></li></ul><li>Value and ROI <br />Costs<br />Value of Licence<br />
  84. 84. Appraisal<br />From Probable volume to proven reserves<br />
  85. 85. Narrowing ranges<br />Exploration well:<br />0 to 572 MBOE (after drilling)<br />11 to 466 MBOE (after testing)<br />First appraisal well:<br />25 to 333 MBOE (after drilling)<br />34 to 310 MBOE (after testing)<br />Second appraisal well:<br />65 to 250 MBOE (after drilling)<br />101 to 152 MBOE (after testing)<br />Only proven MBOE counts<br />
  86. 86. Increasing proven volumes<br />Appraisal wells - proven reserves increase<br />Range between proven and possible is decreased<br />
  87. 87. Effect on calculation of licence<br />
  88. 88. Challenge 3B Drilling<br />
  89. 89. Continue...<br />Narrow uncertainty: Drill appraisal wells to get proven volumes<br />Drill into other prospects to find more proven volumes.<br />Farm-in and -out: Get into other good blocks.<br />Two additional licensing rounds: Repeat the processes.<br />Money: Apply for more money, if you run out of cash.<br />
  90. 90. Apply For More Funds<br />Click on Apply for More Funds Tab. <br />1 CP for each $100,000 applied for.<br />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.<br /><10 credibility points: Apply for cash and be fined $5million for each $20million requested.<br />
  91. 91. Licence strategy<br />Exploration acreage:<br /><ul><li>Resources
  92. 92. Reserves
  93. 93. Production</li>