PetroChallengeOilSim3

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  • We have direct providers of Fresh Cut BG, SBLC and MTN which are specifically for lease. Our bank instrument can be engaged in PPP Trading, Discounting, Signature Project(s) such as Aviation, Agriculture, Petroleum, Telecommunication, Construction of Dams, Bridges, Real Estate and all kind of projects. We do not have any broker chain in our offer neither do we get involved in chauffer driven offers. We deliver with time and precision as set forth in our agreement. Our terms and Conditions are reasonable, below is our instrument description.

    DESCRIPTION OF INSTRUMENTS:
    1. Instrument: Bank Guarantee (BG/SBLC)
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    4. Age: One Year, One Day
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    All relevant business information will be provided upon request.
    If Interested kindly contact me via Email:~

    Email:andreydro.finance@gmail.com
    Skype ID: andreydro.finance

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    Andrey Dorofeev
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  • Welcome to OilSim Exploration, the petroleum exploration business simulation. This Powerpoint presentation is an introduction to OilSim, intended for those that are going to participate in an OilSim Exploration event.
  • The purpose of OilSim is to improve your overall understanding of the oil and gas exploration industry. OilSim is an online business simulation, and it encompasses several – if not all – the disciplines that comprise the exploration industry. In OilSim, you work together with others in a team. Your team competes and collaborates with other teams that participate in the simulation. Your team has been sent out by an energy company to a new and promising new oil and gas area, and 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.
  • In order for your team to be able to start exploring, the headquarters have provided you with 200 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.
  • Knowledge points (KPs) are awarded for correct answers and good work. Up to 100 KPs can be gained per challege. Everybody can see how many KPs you gain per challenge. KPs can be used to apply for more funds from Head Quarter. The more KPs you gain, the more money you can ask for.
  • OilSim is a business simulation designed to give you an overview of the petroleum exploration industry. The key learning points include: how you find oil and gas, which surveys are used for what, the importance of having good information, how licenses are awarded, how energy companies spread the risk by going into partnerships, how drilling is done using rigs and sub-contractors, 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.
  • 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.
  • 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.
  • 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.
  • This is an example of a map, used in OilSim. Maps like these are normally handed out to all participants for reference. You can see that there is land to the left and increasing depths of sea to the right. All exploration in OilSim is done offshore in the area to the right. The water depth runs from 0 meters to 1000 meters, and it must be said right away that oil and gas fields in shallower water are always cheaper to explore and easier to make commercial viable. This map is divided into 252 square license blocks, each identified by a number between 501 and 752. Each license block is 8x8 cells big, and each cell is 2km x 2km. Each cell is identified by a column letter and a row number, which run from A to DL, and 1 to 144, respectively. On the map you can see the cell identified by column BO and row 49. This cell is in block 619. Rows are nominated R1..n, Columns are nominated C1..n
  • 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.
  • One of the two types of surveys are the gravimetric surveys. Gravimetric surveys show how the gravity 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.
  • This is an example of a real gravimetric 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.
  • Surveys are found under the tab called surveys. You will then see the Survey Shop in the top box to the right. You may then buy 4 magnetic surveys and 4 gravimetric surveys. Each of the surveys covers one quarter of the full map, called quadrants. The four quadrants are: North-West North-East South-West South-East. In order to see the full map, you need to open all four surveys.
  • An example of a gravimetric quadrant survey
  • Open all four quadrant survey, and place the survey according to the map coordinates, in order to see the full map context
  • 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.
  • This is an example of a real magnetic survey. 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.
  • An example of a magnetic survey quadrant map.
  • Open all four quadrant survey, and place the survey according to the map coordinates, in order to see the full map context
  • To identify the centre of the basin, you shall identify the coordinates of the extreme points of the continuous basin structure. The basin structure is coloured in red, orange and yellow. Extreme points are the most eastern, western, northern and southern points of the basin structure. When the extreme point are identified, you shall make diagonals, in order to identify the centre of the basin. The centre lies where in the diagonals intersect with each other. Identify the row number and column number of the centre.
  • To identify the centre of the basin, you shall identify the coordinates of the extreme points of the continuous basin structure. The basin structure is coloured in purple only. Extreme points are the most eastern, western, northern and southern points of the basin structure. When the extreme point are identified, you shall make diagonals, in order to identify the centre of the basin. The centre lies where in the diagonals intersect with each other. Identify the row number and column number of the centre.
  • 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.
  • 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 survey Finding 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 surveys The 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.
  • 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 r
  • 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.
  • Over the years governments, organisations and the Oil and Gas companies have become aware of the impact exploration and production can have on the environment. Policies are now in place during the licensing rounds to limit or even prohibit drilling in particular areas, this can include areas of special natural characteristics, areas populated by particular species or protected habitats.
  • 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.
  • 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 hydrocardons If one is negative, then the area is shown in orange – with a medium probabilty of hydrocardons If the answers to 2 or 3 questions are “NO”- then the area is red and has a low probability of containing oil or gas.
  • The three geological layers beneath ground level, or the seabed are known as horizons or prospecting systems – are numbered from the bottom up (the one that was laid down first) The bottom layer is called Cretaceous and is 3500 meters below the seabed. The middle horizon is called Paleocene and is 2500 meters below the seabed. And finally, the highest or top horizon is called Eocene and is 1500 meters below the seabed.
  • 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.
  • 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 begins red lines are where the geologists think the sealing rock begins In this particular case there is a prospect indicated under the o range arrow, within the grey triangle.
  • All 2D seismic surveys in OilSim contains geologists interpretations of reservoir rock and cap rock. Where the green line is the bottom of the reservoir and the the red line is the bottom of the cap rock. You might have noticed that 2D seismic surveys in OilSim have been simplified. There are no fault lines or other anomalies and so only one type of trap. The trap type is called a “four-way closure structural trap” and it is visible on 2D seismic surveys as ”tops” or ”bumps”
  • This slide shows an example of a 2D seismic survey as in OilSim. Each of the surveys show the structure in the subsurface along a half row or a half column. In this slide the survey shown is for row R30 and covers the first 57 columns, from C1 to C57. The vertical black lines are borders between the license blocks, Since there are 3 of the geological layers in OilSim, it is possible to locate prospects in all three layers.
  • As explained in an earlier slide, you are looking for the peaks or bumps, which might indicate a possible four-way trap. Where a number of peaks appear within one block, perhaps on all 3 layers, this could give more possibilities of prospects within one block. Here you can see the prospects that a visible in this 2D seismic. You need to look out for the peaks. This 2D seismic shows row R30, from column C57-C113. In this case the best block would be block 554.
  • 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.
  • An exploration license is a permission from the Government to drill exploration wells in a license block. The licensing round process in real life involves many economical and political activities , where oil companies and license owners –the government – conduct bidding activities in order to strike the best, but fair deals. The process is long with set deadlines throughout. Typical licensing rounds require long negotiations and the need for an oil company to satisfy certain criteria, or achieve a number of agreements including: The signature bonus ( cash paid up front for the right to explore) Production share agreement (PSA) Fixed or negotiable fiscal terms Work programme - c ommitment to drill wells and/or acquire seismic surveys in a certain timeframe State participation in exploration , development and production phases; Local content –education and training for local people to provide agreed numbers in workforce Collaboration with local vendors – bringing business to local suppliers Research and development requirements - technology & competence development and experience
  • In OilSim this has been simplified and the Government is only concerned with the amount of the signature bonus, the amount offered to the Government and the number of knowledge points a team has achieved. The minimum bid allowed is 1 million dollars and the highest bid is 30 million dollars. You should try and bid for 3 licenses as this increases your chances of getting a good block and also will help you secure more knowledge points, which are always useful throughout the simulation. Knowledge points in this task are based on a) how green or yellow the CRS surveys are in the blocks that you bid for, and b) how many and how large the prospects are in the blocks that you bid for. You can get up to 300 knowledge points. Even though you can submit 3 offers, each team will only be awarded one license and will only pay for that license. If two or more teams bid for the same block, the highest bidder will get the license. However, if two or more teams bid the same amount of money, then the team with the most knowledge points will be awarded the license. If you do not offer sufficient amounts for all your blocks and other teams bid higher amounts, then you will be awarded a random block by the Government from one of the ones left in that licensing area.
  • So to bid for a license, you look to the New Licensing Round task on the homepage on the right hand-side. You choose which blocks to bid for by finding the block numbers in drop down boxes. You then enter in whole millions and with no dollar signs, commas or points how much you are willing to bid for that block. E.g block 591 and bid 2000000 You should enter three blocks and three amounts, with the highest amount in the first choice, and the second-highest amount in the second choice. You can only bid for blocks that are within the orange licensing area shown on the main map. In fact it is a good idea to mark this area on your own map. You must enter your bids before deadline, but you can amend your choices or amounts at anytime until the deadline by changing the numbers and pressing update again. When the deadline has passed all bids will be evaluated.
  • 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 knowledge 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.
  • First you must get other teams to invest at least 20% of your license. This means that you need to convince others to invest in you. The procedure for farming in is similar to the procedure in tasks 1 and 2. First you buy and study 3D seismic surveys for the blocks that you are the operator of. Then you negotiate either in person or by sending messages. Then you submit one offer for each license that you would like to own a share in. You submit the amount that you offer and the share that you want for that amount.
  • 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.
  • Farm-out: When a license owner sells a % of their own license Pick teams to send farm-out offers to or Select All if you want everyone to see your offer Indicate how much you want to farm out and what amount you wish to receive for this % of your block. Explain in text why you have a good block. Press Next
  • Choose which surveys to show others – provides evidence of your good block Select “place on market” so that others can see your farm-out offer
  • You can either send a farm-in offer to a team of your own choice or you can check out the Farm-out offers on the market and send farm-in offers to one of these. Study the surveys for this block to determine whether there are likely prospects, especially the 3d seismics. If you review a farm-out offer on the market, the license owner will offer for you to be able to see their 3d seismics before you submit your actual farm-in offer.
  • 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
  • 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
  • This figure illustrates the different “depths” we are working with in OilSim 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. To determine how long it will probably take to complete drilling, check out the “drilling Information” tab.
  • Before you choose where to drill you should buy an Environmental Impact Assessment (EIA) survey to get more knowledge about the area. The benefit of an EIA survey is that you will be prepared for any environmental challenges you might encounter when drilling. With an EIA survey you will have lesser probability for drilling problems, and the extra costs will be less. Also, in the EIA survey you can see which drilling locations you should avoid. Some areas in your block are challenging to drill in. This can be because of strong currents, adverse conditions on the seabed or other local conditions. When you drill in those locations your costs go up 20%. You can see these locations in the EIA survey. You only have to buy one EIA survey for each license that you operate. You can find the EIA surveys under Surveys.
  • Place your drill string on a green cell. Red cells must be avoided.
  • 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. 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.
  • 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.
  • 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.
  • 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.
  • Here we have an example of all cells are red, meaning that the rig cannot drill to this depth. Click on Back a couple of times, and choose another rig, capable of drilling deeper, than your current choice.
  • 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.
  • 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 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.
  • Here you can see an example of how the volume range narrows for each test and each well
  • When you have drilled and tested a couple of wells to narrow the uncertainties in the first field(s), you can start drilling into other prospects in your license block to see if they might make the block economically viable. You should follow what happens in the blocks you have farmed into, as well as keep an eye on new opportunities to invest. You will have the chance to get new and maybe better license blocks in the additional licensing round(s). 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. The winner is the team that has the highest ROI (return on investment) when the simulation stops.
  • 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.
  • Finally we wish to attract your attention to the license strategy, you must apply, in order to maximise your ROI. The winning strategy is about to securing continous access to new promising exploration areas, continously identify new large high quality reservoirs, Building projects with world class performance Systematic approach to recovery, in order to optimise depletion of reservoirs. In this version of OilSim you will be able to show your excellence in the first two challenges, by showing your abilities in license bidding and partnership/drilling.

Transcript

  • 1.  
  • 2.
    • You are an exploration team in charge of a new petroleum province. Your task is to get maximum return on investment (ROI)
    • Multidisciplinary challenge: Enhance your overall understanding of petroleum exploration and field development.
  • 3.
    • 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.
    • Winning team has highest ROI Return on investment is calculated as Value of oil discovered DIVIDED WITH Funds received.
  • 4.
    • You get KPs for doing well during the simulation Correct answers and sensible decisions are awarded with KPs
    • KPs are a measure of ability and credibility Accumulated KPs are used when bidding for blocks and applying for funds from the HQ
  • 5.
    • Where and how to find hydrocarbons. Various surveys during exploration.
    • Licensing rounds. Farm-in and Partnerships.
    • Drilling rigs and Sub-contractors.
    • Environmental issues.
    • Economically viable volumes. Reducing uncertainty.
    • Team work and negotiation. Critical decision making, analytical skills. Multi-tasking.
  • 6. Oil Gas
  • 7.
    • www.oilsim.com
  • 8.  
  • 9. Columns Rows Block Blocks are divided into smaller cells e g. R1C1
  • 10.
    • 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.
  • 11.
    • Gravimetric surveys show the gravity in the sub-surface. Measured by airborne sensors.
    • Sedimentary rocks have lower densities than the surrounding crystalline rocks. Low gravity means high probability of a basin below.
    • Low gravity are basins.
    • High gravity are crystalline rocks
  • 12.  
  • 13.  
  • 14.
    • Gravimetric survey: South-east quadrant
  • 15.
    • All four quadrant surveys in map context.
  • 16.
    • 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.
  • 17.  
  • 18.
    • Magnetic survey: North-west quadrant
  • 19.
    • All four quadrant surveys in map context.
  • 20.
    • Locate edges of the continous basin structure (yellow area)
    • Locate the diagonals and thus basin centre
  • 21.
    • Locate edges of the continous basin structure (purple area)
    • Locate the diagonals and thus basin centre
  • 22.
    • Calculate the average columns and rows
  • 23.  
  • 24.  
  • 25.
    • All teams have submitted their answers. Basin centers are located.
    • Message in Inbox. All teams have answers and KPs awarded.
  • 26.
    • 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 offer an amount for each of them.
  • 27.
    • Any restrictions involved? Yes, you better watch out for spawning grounds.
    • What are we looking for? Prospects. Not oil or gas as such, but potential reserves of hydrocarbons.
    • Where do we find prospects? In sedimentary basins, where hydrocarbons 1) are produced and 2) trapped
    • How do I find them? Traps can be seen with 2D seismic , but you need Common Risk Segment maps to identify the probability of finding hydrocarbons.
  • 28. SOURCE ROCK where organic material is put under sufficient pressure MIGRATION ROCK where hydrocarbons are driven through CAP ROCK stops migration of hydrocarbons
  • 29.
    • Subsurface structure identified to be likely to contain hydrocarbons
    • What makes a prospect?
        • Source rock, where oil and gas is generated
        • Porous migration rock, that routes the hydrocarbon into the prospect
        • Porous reservoir rock , which can contain the oil or gas
        • Impermeable cap rock that prevents further migration of hydrocarbons. Known as a trap
  • 30. (c) OLF Anticline trap Fault trap Stratigraphic trap Salt dome trap
        • Geological “pockets” , that might contain hydrocarbons.
  • 31.  
  • 32. Red areas You will not be awarded blocks that contain any red spots Blue areas Blocks in area may be awarded
  • 33.
    • CRS is made by geologists asking:
      • Is there a sedimentary basin and a migration route into the prospects in the area?
      • Is there porous reservoir rock in the area, so that the oil or gas can be stored?
      • Is there a sealing rock in the area, so that the oil and gas can be trapped?
      • If all are positive, then green
      • If some negative, then orange
      • If mostly negative, then red
  • 34.
    • Three prospecting systems: Not related to each other
    • Eocene 1500m below the seabed
    • Paleocene 2500m below the seabed
    • Cretaceous 3500m below the seabed
  • 35. Layer 3 Eocene Layer 2 Paleocene Layer 1 Cretaceous CRS. Common Risk Segment surveys tell you about the probability of a structure in the block/cell containing oil or gas Surface
  • 36.
    • 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
  • 37.                                                                                                                                                                         
  • 38.
    • Green is bottom of the reservoir
    • Red is bottom of the cap rock
    • A trap is shown as a top or bump
    With interpretation
  • 39.
    • Three separate geological layers/horizons
    • See block numbers on top
  • 40.
    • Look out for Anticline traps (four-way structural traps)
    • Combine rows and columns
  • 41. Column Row Prospect, Reservoir Basin,Source
  • 42.
    • Long process:
        • Invitation or announcement
        • Qualification with or without Pre-qualification
        • Preparation , data acquisition , evaluation
        • Establishment of partnerships
        • Priority , recommendation for bidding
        • Application , documentation , bid
        • Announcement of bidding results
        • license negotiation
        • Work programme
  • 43.
    • Minimum bid is USD 1000000 (one million)
    • Maximum bid is USD 3000000 (thirty million)
    • You should bid for 3 licenses
    • BUT each team will only be awarded one license
    • Highest bid gets the license
    • If two teams bid the same, the team with the most KP’s gets it
    • Random license awarded if none of your bids are high enough
    • Submit your bid before the deadline
  • 44.
    • Three different blocks
    • Three bids
    • 1 Example-
    • Block 591
    • Bid 2000000
  • 45.
    • Study spawning ground maps to see which blocks to avoid
    • Use Common Risk Segment surveys to see which blocks to examine closer
    • Buy and study many 2D surveys for the green blocks from the CRS surveys to identify which ones have the most (big) structures)
    • Check water depth, and go for shallow water blocks if possible
  • 46.  
  • 47.
    • Message sent to all teams with the results
    • Knowledge Points are given for prosperity of the blocks you bid for
    • Every team has got one exploration license
  • 48.
    • 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.
  • 49.
    • 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
    • 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 %.
  • 50.
    • Shows the subsurface structure in a cube.
  • 51. Layer 1 Cretaceous Layer 2 Paleocene Layer 3 Eocene
  • 52.
    • “ Tops” are prospects, where hydrocarbons may be.
    • Prospects are no
    • guarantee for oil or gas
  • 53.
    • 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.
  • 54.
    • Farm-out: When a license owner sells a % of their own license
    • Teams are able to put a Farm-out offer on the market for other teams to see
    • Choose the % you wish to farm-out and the Amount you will accept for this %
  • 55.
    • Choose which surveys to show others
    • Place your farm-out offer on market
    • Others can then then see your offer and send you their own farm-in offers
  • 56.
    • Farm-in : When an investor buys a % of another team’s license
    • Study surveys – 3D and 2D seismics and CRS of the other licenses.
  • 57.
    • 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”
  • 58. 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
  • 59.
    • 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 .
  • 60. 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
  • 61.
    • Partners pay a proportional share of all future costs incurred by the partnership
    • Partners receive a proportional share of the net proceedings from any oil or gas found on the license.
    • The operator team makes all decisions regarding acquiring 3D seismics, drilling of wells and testing of wells.
    • Information: partners in a block can access info about drilled wells and discovered oil and gas fields.
  • 62.
    • 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
  • 63. Seabed 3500 m below surface Layer 3 Eocene Layer 2 Paleocene Layer 1 Cretaceous 19 days 35 days 45 days 1500 m below surface 2500 m below surface v
  • 64.
    • EIA survey: more knowledge about the area.
    • Less probability for drilling problems.
    • Less severe consequences if you run into problems.
    • = Which drilling locations to avoid.
  • 65.
    • EIA: enviromental impact analysis shows where not to drill.
    • Place your mouse where to drill
  • 66.
    • 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.
  • 67.
    • Star quality:
    • Good: normally costs more
    • Bad: cheaper,
    • but reliability is low, so you risk extra drilling time and extra costs
  • 68.
    • 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.
  • 69. Layer 1 Cretaceous Layer 2 Paleocene Layer 3 Eocene Where to drill: which cells on each layer. One cell deviation between layers. How deep to drill:
  • 70. Layer 1 Cretaceous Layer 2 Paleocene Layer 3 Eocene
  • 71.
    • Too deep for the chosen rig.
  • 72.
    • Volume Range in MBOE counts
    • Test may increase Proven MBOE if oil or gas found
  • 73.
    • 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.
  • 74.  
  • 75.
    • From Probable volume to proven reserves
  • 76.
    • First well:
      • 0 to 572 MBOE (after drilling)
      • 11 to 266 MBOE (after testing)
    • Second well:
      • 11 to 233 MBOE (after drilling)
      • 35 to 210 MBOE (after testing)
    • Only proven MBOE counts.
  • 77.
    • 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.
  • 78.
    • 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.
  • 79.
    • Exploration acreage:
    • Resources
    • Reserves
    • Production
  • 80.