Oil Sim Exploration Faroes


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OilSim Faroes 2008

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  • Welcome to OilSim Exploration, the petroleum exploration business simulation. This presentation is an introduction to OilSim, intended for those that are going to participate in an OilSim Exploration event or training course.
  • Oil Sim Exploration Faroes

    1. 1. Faroe Islands 3-4 November 2008
    2. 2. <ul><li>Purpose: Enhance your overall understanding of petroleum exploration </li></ul><ul><li>Multidisciplinary challenge </li></ul><ul><li>You are an exploration team in charge of a new petroleum province </li></ul><ul><li>Your task is to get maximum return on investment (ROI) </li></ul>
    3. 3. <ul><li>You start with $200 Million </li></ul><ul><ul><li>You can apply for more money later </li></ul></ul><ul><li>Value: </li></ul><ul><ul><li>Net value of the oil fields discovered </li></ul></ul><ul><ul><li>MINUS costs (surveys, wells, etc.) </li></ul></ul><ul><li>Winning team: </li></ul><ul><ul><li>highest return on investment (ROI) </li></ul></ul><ul><ul><li>ROI = Earnings / Funds received </li></ul></ul>
    4. 4. <ul><li>Where and how to find oil </li></ul><ul><li>Surveys used in exploration </li></ul><ul><li>Licensing rounds </li></ul><ul><li>Farm-in and Partnerships </li></ul><ul><li>Rigs and Sub-contractors </li></ul><ul><li>Addressing environmental issues </li></ul><ul><li>Reducing uncertainty </li></ul><ul><li>Economically viable volumes </li></ul>
    5. 5. <ul><li>Upstream </li></ul><ul><ul><li>Exploration </li></ul></ul><ul><ul><li>Field Development </li></ul></ul><ul><ul><li>Production </li></ul></ul><ul><li>Downstream </li></ul><ul><ul><li>Refining </li></ul></ul><ul><ul><li>Distribution </li></ul></ul>
    6. 6. <ul><li>Phase 1: Find Basins </li></ul><ul><li>Phase 2: Bid for Licences </li></ul><ul><li>Phase 3: Drilling </li></ul><ul><ul><li>3.1 Farm-in </li></ul></ul><ul><ul><li>3.2 Order Rig </li></ul></ul><ul><ul><li>3.3 Select Providers </li></ul></ul><ul><ul><li>3.4 Select Position </li></ul></ul><ul><ul><li>3.5 Testing </li></ul></ul>
    7. 7. Columns (A to DL) Rows (1 to 152) 600 sea bed depth Cell (BO,49) Block 619 619
    8. 8. www.oilsim.com
    9. 10. <ul><li>Find the 3 basins in the area </li></ul><ul><li>Basin: Sedimentary rocks in the deep subsurface where oil and gas was generated </li></ul><ul><li>Procedure </li></ul><ul><ul><li>Buy and study magnetic and gravimetric surveys </li></ul></ul><ul><ul><li>Submit the coordinates, column (letter) and row (number)for each basin centre </li></ul></ul>
    10. 12. <ul><li>Gravimetric surveys show the gravity in the sub-surface </li></ul><ul><li>Sedimentary rocks (“basins”) have lower densities than the surrounding crystalline rocks </li></ul><ul><li>Low gravity (green) -> Basins </li></ul><ul><li>High gravity (red) -> Crystalline rocks </li></ul>
    11. 15. North East
    12. 18. <ul><ul><li>Find the cell that contains the center of the basin </li></ul></ul><ul><ul><li>You have to locate all 3 cells to get 100 kp </li></ul></ul>
    13. 19. <ul><li>Possible to get between 0 and 100 knowledge points (KP) </li></ul><ul><ul><li>KP’s can be used e.g. when you apply for money </li></ul></ul><ul><li>Must be solved before deadline </li></ul><ul><li>After the deadline, all submissions are evaluated </li></ul>
    14. 20. <ul><li>All basins are located </li></ul><ul><li>Message sent to all teams with the results </li></ul><ul><li>Oil and gas is close to the basins </li></ul><ul><li>Next step: First licensing round </li></ul><ul><ul><li>The blocks around one of the basins are on offer </li></ul></ul>
    15. 21. <ul><li>Bid to get a exploration licence </li></ul><ul><li>Exploration licence: A permission from the Government to explore a block </li></ul><ul><li>Procedure </li></ul><ul><ul><li>Buy and study Common Risk Segment Maps, 2D Seismic surveys, and Spawning Ground Maps </li></ul></ul><ul><ul><li>Submit 3 bids </li></ul></ul><ul><ul><ul><li>Block number </li></ul></ul></ul><ul><ul><ul><li>Amount offered to Government (“bonus”) </li></ul></ul></ul>
    16. 22. Basin Prospect Play Migration
    17. 23. Migration Reservoir Seal Seal Reservoir
    18. 24.                                                                                                                                                                         
    19. 25. <ul><li>A 2D Seismic survey is a cross section of the geological layers </li></ul><ul><ul><li>along either a column or a row </li></ul></ul><ul><li>Is used for locating prospects </li></ul><ul><li>Look out for traps </li></ul><ul><li>Three separate geological layers </li></ul>
    20. 27. Top of sealing rock Top of reservoir rock
    21. 28. Column Row Prospect, Reservoir Basin,Source
    22. 29. 659
    23. 30. <ul><li>In OilSim, there is only one type of trap: the four-way closure structural trap </li></ul><ul><ul><li>in reality, there are several other types </li></ul></ul><ul><li>Three prospecting systems </li></ul><ul><ul><li>3. Eocene (1.500 m below seabed) </li></ul></ul><ul><ul><li>2. Paleocene (2.500 m -) </li></ul></ul><ul><ul><li>1. Cretaceous (3.500 m -) </li></ul></ul>
    24. 31. <ul><li>Prospect </li></ul><ul><li>probability </li></ul><ul><ul><li>Red : low </li></ul></ul><ul><ul><li>Orange : medium </li></ul></ul><ul><ul><li>Green : high </li></ul></ul>There is one CRS for each geological layer
    25. 32. Band 3 Eocene Band 2 Paleocene Band 1 Creataceous
    26. 33. <ul><li>There are spawning ground areas in the map – these are environmentally sensitive areas where fish breed </li></ul><ul><li>Some spawning grounds might be in the blocks that have been offered </li></ul><ul><li>However, no licences will be awarded in blocks that are spawning grounds </li></ul><ul><li>To find out which blocks are spawning grounds, you can buy a Spawning Ground Survey </li></ul>
    27. 34. Red Area: Spawning Grounds You will not be awarded blocks that contain any red area Blue Area: Not Spawning Grounds The survey covers the whole area
    28. 35. <ul><li>Study spawning ground maps to see which blocks to avoid </li></ul><ul><li>Use CRS to see which blocks to study </li></ul><ul><li>Buy and study many 2D surveys </li></ul><ul><li>Focus on shallow water blocks </li></ul><ul><ul><li>It is cheaper to drill exploration wells in shallow water </li></ul></ul><ul><ul><li>It is more economically viable to produce oil and gas in shallow water </li></ul></ul>
    29. 37. Remember to update the site
    30. 38. <ul><li>Minimum bonus: 1000000 </li></ul><ul><li>Maximum bonus: 30000000 </li></ul><ul><li>You will only get one licence </li></ul><ul><li>Highest bid gets the licence </li></ul><ul><li>If you lose on all three blocks, you will get a random licence (of the ones that are left) </li></ul><ul><li>Do submit 3 bids -> more KP’s and higher probability for success </li></ul>
    31. 39. <ul><li>Submit your bid before the deadline </li></ul><ul><li>After the deadline, all bids are evaluated, and each team gets one and only one licence </li></ul>
    32. 40. <ul><li>Every team has got one exploration licence </li></ul><ul><li>Message sent to all teams with the results </li></ul><ul><li>Knowledge Points: a measure of how prosperous the blocks the team bid for were </li></ul><ul><li>Next step: Farm-in </li></ul>
    33. 41. <ul><li>The headquarters of your company has evaluated the licence that you were awarded </li></ul><ul><li>Although the possibility of finding oil is fair, the costs involved are large, and the headquarters wants you to spread the risk. </li></ul><ul><li>This is accomplished by: </li></ul><ul><ul><li>investing in other licences (farm-in), and </li></ul></ul><ul><ul><li>letting other invest in your licence (farm-out) </li></ul></ul>
    34. 42. <ul><li>Get other’s to invest 20% or more in your licence (“farm-out”) </li></ul><ul><li>You can only send farm-in offers (!) </li></ul><ul><ul><li>Offers to buy parts of other licences </li></ul></ul><ul><li>Procedure for farming in: </li></ul><ul><ul><li>Study CRS and 2D Seismic surveys </li></ul></ul><ul><ul><li>Submit one offer for each viable licence </li></ul></ul><ul><ul><ul><li>Amount offered </li></ul></ul></ul><ul><ul><ul><li>Share wanted (in whole %) </li></ul></ul></ul>
    35. 45. <ul><li>Partners pay their share of all future costs incurred by the partnership. </li></ul><ul><li>Partners receive their share of the net proceedings from any oil found on the licence </li></ul><ul><li>The operator team takes all decisions regarding acquirement of 3D seismic, drilling of wells and testing of wells </li></ul>
    36. 46. <ul><li>Study CRS and 2D seismic surveys of the other licences </li></ul><ul><li>Submit your bids </li></ul><ul><ul><li>Minimum amount 100,000 for 1% </li></ul></ul><ul><li>You are not allowed to drill before at least 20% of your licence has been farmed out </li></ul><ul><li>You can farm-in & -out at any time </li></ul><ul><li>Partners in a block get all info about drilled wells and discovered oil and gas fields </li></ul>
    37. 47. <ul><li>Partnerships will be established every time a seller accepts an offer </li></ul><ul><li>On the main page, you can see all the licences </li></ul><ul><ul><li>The licences you operate </li></ul></ul><ul><ul><li>The licences you have invested in </li></ul></ul><ul><ul><li>Other licences </li></ul></ul><ul><li>Next task: order rig </li></ul>
    38. 48. <ul><li>3 rig types </li></ul><ul><ul><li>Drillships </li></ul></ul><ul><ul><li>Semi-submersibles </li></ul></ul><ul><ul><li>Jack-up rigs </li></ul></ul><ul><li>Different water depths, Different day rates </li></ul><ul><ul><li>Rig cost = drilling days * day rate </li></ul></ul>
    39. 51. Seabed 3500 m below seabed Layer 3 Eocene Layer 2 Paleocene Layer 1 Cretaceous 1500 m below seabed 2500 m below seabed “ water depth”
    40. 54. <ul><li>Limited number of rigs available </li></ul><ul><li>You can order a rig </li></ul><ul><ul><li>Start using it within 20 minutes </li></ul></ul><ul><li>Not enough for all </li></ul><ul><ul><li>Wait in a queue, if another team is using the rig </li></ul></ul><ul><li>Rig day rates are dynamic </li></ul>
    41. 58. <ul><li>You have to choose where to drill </li></ul><ul><ul><li>Which cells? </li></ul></ul><ul><li>..and how deep to drill </li></ul><ul><ul><li>Either to the Eocene horizon </li></ul></ul><ul><ul><li>Through the Eocene to the Paleocene horizon, </li></ul></ul><ul><ul><li>or through the Eocene, the Paleocene, and to the Cretaceous horizon </li></ul></ul>
    42. 59. <ul><li>Buy an EIA survey to get more </li></ul><ul><li>knowledge about the area </li></ul><ul><li>EIA equals </li></ul><ul><li>Less probability for drilling problems </li></ul><ul><li>Less severe consequences if you run into problems </li></ul><ul><li>In the EIA you can also see which </li></ul><ul><li>drilling locations to avoid </li></ul>
    43. 60. <ul><li>Shows the structure: </li></ul><ul><ul><li>in one (of the three) horizons </li></ul></ul><ul><ul><li>in one block </li></ul></ul><ul><li>Look out for “tops” </li></ul><ul><ul><li>a top = a trap = a prospect </li></ul></ul>
    44. 62. Layer 1 Creataceous Layer 2 Paleocene Layer 3 Eocene Column 60, Row 79 Column 60, Row 78
    45. 69. <ul><li>If you discover a field-> decide whether you want more information about that field </li></ul><ul><li>You get more information by doing a production test (and other tests) </li></ul><ul><li>Tests take 10 days per field </li></ul><ul><li>Tests have the same day-rate as the drilling (you use the same providers) </li></ul>
    46. 75. <ul><ul><li>From Probable volume to proven reserves </li></ul></ul>
    47. 76. <ul><li>First well: </li></ul><ul><ul><li>0 to 572 MBO (after drilling) </li></ul></ul><ul><ul><li>11 to 266 MBO (after testing) </li></ul></ul><ul><ul><li>Proven volume: 11 MBO </li></ul></ul><ul><li>Second well: </li></ul><ul><ul><li>11 to 233 MBO (after drilling) </li></ul></ul><ul><ul><li>35 to 210 MBO </li></ul></ul><ul><ul><li>Proven volume: 35 MBO </li></ul></ul>
    48. 77. <ul><li>Drill appraisal wells to narrow the uncertainty (get proven volumes) </li></ul><ul><li>Drill into other prospects </li></ul><ul><li>Farm-in and -out </li></ul><ul><li>Two additional licensing rounds </li></ul><ul><li>Apply for more money, if you run out of cash </li></ul><ul><ul><li>Winner: highest ROI </li></ul></ul>