Onshore 3.4 template presentation new

518 views

Published on

Published in: Technology, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
518
On SlideShare
0
From Embeds
0
Number of Embeds
4
Actions
Shares
0
Downloads
8
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • 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 licences, investing in other team’s licences, 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.
  • credibility points (CPs) are awarded for correct answers and good work.
    Up to 100 CPs can be gained per challege.
    Everybody can see how many CPs you gain per challenge.
    CPs can be used to apply for more funds from Head Quarter. The more CPs 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 licences 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 credibility points that you have accumulated.
    credibility 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 licences.
    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 credibility you can get a list of the times you have gained or lost credibility 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.
    This map is divided into 252 square licence blocks, each identified by a number between 1001 to 1252.
    Each licence block is 8x8 cells big, and each cell is 2km x 2km. Each cell is identified by a column number and a row number, which run from C1 to C112 and R1 to R144, respectively.
    On the map you can see the block highlighted is 1134 and the cell in the top left hand-corner of this block is identifible by C57 and row R73.
  • 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.
  • 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.
  • This is an example of a real gravimetric survey of the Vilmenko region, onshore in Finland, Europe.
    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 Vilminko areas. Thus our main focus will be in these areas in terms of oil and gas exploration.
  • 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 and a green message appears at the top of the task information confirming that your basin centres have been accepted.
    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.
  • When the deadline has passed and task 1 is solved, you will get a message in your Mailbox.
    You can find the Mailbox in the left hand side.
    In the message you can see the block numbers your team and the other teams submitted, and how many credibility points each team got.
    If you look at the cell coordinates one of the teams that got 100 points or close to that, you can see what the correct answers were.
    What you know is that oil and gas is close to these identified basins.
    The next step is the first licensing round, where the blocks around one of the basins are being offered by the Government so that you can bid for them.
    Note that for the rest of the simulation, the gravimetric and magnetic surveys are practically useless, and you should only focus on the new surveys in order to find where the oil or gas is deposited now.
  • 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 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 keep 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.
  • Where NOT to drill.
    Due to special characteristics of nature, populated areas, and life habitats, these areas may be prohibited from oil and gas exploration.
    Endangered Species Range-Land areas, are areas where particular endangered animals, such as caribou are living and breeding, and therefore sensitive to any pollution and disturbance, derived from oil and gas exploration and production.
  • In Oilsim , the Endangered Species Range-Lands Survey covers the whole map, and might look like this. Red areas are spawning grounds, and blue are not.
  • 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.
  • 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.
  • In OilSim the 2D seismic surveys are either along a column or a row.
    Surveys are available for every second row and every second column.
    You use 2D seismic surveys to locate the prospects in the subsurface, and what you should look out for are the traps.
  • 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 orange arrow, within the grey triangle.
  • 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 orange arrow, within the grey triangle.
  • There are 3 types of data available when you order Seismic surveys in OilSim.
    Unprocessed data, is the raw data that is available fairly soon after the seismic providors have done the surveys
    Processed data gives you more information about the geological layers in the ground
    Interpreted date has been interpreted by geologists. These surveys identify the sealing and reservoir rocks, and possible fault lines in the geological structure.
    The traps in OilSim are either:
    anticlinal
    fault traps
  • The yellow circles show prospects in this 2D seismic. The reason that 4 areas have been marked is that the green line (reservoir rock) makes a “peak” and there is a sealing rock, making sure that the oil and/or gas doesn’t migrate to an other area.
  • In this scenario we can see a fault line go through the geological layer. There are 2 prospects are located right beside the fault line, but because the red line (sealing rock) is on both sides of the fault line the oil/gas can’t migrate and is trapped. The other potential prospect actually has had leakage because the reservoir rock (the green line) is above the sealing rock, which allows the oil/gas to migrate.
  • Hear 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 you want to buy seismic surveys, click on surveys-tab in the centre of the page. On the left hand side you’ll see the survey shop appear and click “buy”
  • To buy surveys, click on survey tab and then order the Seismic surveys from the survey shop.
    After you’ve clicked “buy” this screen will appear.
    The yellow box over the map allows you to buy all the seismic data for those particular blocks. So click and hold and move the box to the area you wish to purchase.
    Choose what area you want to buy.
    Decide if you want columns or rows
    Choose if you want processed or unprocessed surveys. Processed data takes more of your time, but you get better data
    Choose interpreted or uninterpreted data. Intrpretede data takes more of your time, but you get better data.
    Then order batch,
    The price of the order will change depending upon your requests and the data type you want.
  • Depending on your choice of data it may take a while to process all the 2D seismic. When the “batch process” has reached 100% the process is finished.
  • When the “batch process” has reached 100% the process is finished.
    You’ll then be able to view the batch you bought in the centre of the page.
    The red circles on this slide are navigation buttons and allow you to see all your 2D seismic in small icons. To focus on one specific 2D seismic, click on that icon.
  • In this figure you can see that 2D seismic surveys are along columns and rows.
    Prospects are visible on both types of 2D seismic surveys.
    Actually, you need to doublecheck if you see it in both the column and the row to be sure that it is ”closed” in both dimensions.
  • 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 credibility 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 credibility points, which are always useful throughout the simulation. credibility 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 credibility 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 credibility 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.
  • You choose which blocks to bid for in drop down boxes, and you enter how much you are willing to bid in the corresponding Bid field.
    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 choose between the blocks that are marked with orange colour in the map in the right hand side.
    Please note that you should only enter numbers, for instance 1000000 without any dollar signs, commas or points.
    You must enter your bid before deadline, and you can change your mind until the deadline has passed.
    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 licencing 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 credibility 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.
  • Farm-in and out is about spreading the risk, thus basic risk management must be applied: Risk Sharing.
  • First you must get other teams to invest at least 20% of your licence. 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 licence 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 licence blocks.
    What you should look out for is four-way closure structural traps, as these are the only traps in OilSim.
  • 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 one cell per horizon.
  • 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
  • Drilling Rigs comes is different sizes and prices.
    Truck mounted Rigs are relatively light and capable to drill relative shallow holes only.
    Light Duty Rigs are larger and more capable that truck-mounted Rigs.
    Heavy Duty Rigs are the largest onshore Rigs included into Oilsim in current version. They can drill deeper holes than anyone of the other types.
  • The next task is to choose which rig to use to drill the exploration well.
    There are three types of rigs: drillships for the deepest waters, semi-submersible rigs for middle waters, and jack-up rigs for shallow waters.
    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.
  • 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.
    Get participants to give examples of types of service providers
  • 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.
  • Place your drill string on a green cell. Red cells must be avoided.
  • 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.
  • Inputting estimated cost of drilling gives you credibility points. 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 credibility points and cost you less to clear an oil spill if it happens.
  • To determine how long it will probably take to complete drilling, check out the “drilling Information” tab.
  • 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).
    Oil or Gas was found in the middle layer, while no prospect was found in the top layer and the prospects were dry in the bottom layer.
    The area of the find is estimated to be between 1 and 11.4 square kilometers.
    The thickness of the field is estimated to be between 60 to 321 meters.
    The quality on a scale from 0 to 10 is estimated to be between 1.5 and 8.1
    These three variables – area, thickness, and quality – together give a volume range of between 5 and 1202 MBOE (million barrels of Oil equivalent)
    The 1202 MBOE is what is possible or 10% probable, while the 5 MBOE is what is PROVEN.
    It is only the proven volume of 5 MBOE that we can use in the calculations of economic viability and what the market is interested in knowing about.
  • 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.
  • 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 licence 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 licence 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 licence 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 licence bidding and partnership/drilling.
  • Onshore 3.4 template presentation new

    1. 1.  You are an exploration team in charge of a new petroleum exploration area.  Your task is to find and drill for new reserves and to maximize return on investment (ROI).  You will need to work as a company as well as in partnership with others.  You will show your new understanding of exploration and be rewarded through credibility Points.
    2. 2.  You will start with $50 million You can apply for more later.  Creating Value Profit is measured by the net value of the oil and gas fields discovered MINUS all costs involved.  Winning team has highest ROI ROI is calculated as Value created DIVIDED by Funds received.
    3. 3.  You get CPs for doing well during the simulation Correct answers and sensible decisions are awarded with CPs  CPs are a measure of ability and credibility A team’s CPs are considered when bidding for blocks and applying for funds from the HQ
    4. 4.  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.
    5. 5.  www.oilsim.com
    6. 6. Columns e.g C1, and C54 Rowse.g.R35andR163 Block Blocks are divided into smaller cells e g. C57,R73
    7. 7.  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.
    8. 8.  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
    9. 9.  Gravimetric survey: South-east quadrant
    10. 10.  All four quadrant surveys in map context.
    11. 11.  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.
    12. 12.  Magnetic survey: North-west quadrant
    13. 13.  All four quadrant surveys in map context.
    14. 14.  Locate edges of the continous basin structure (yellow area)  Locate the diagonals and thus basin centre
    15. 15.  Locate edges of the continous basin structure (purple area)  Locate the diagonals and thus basin centre
    16. 16.  Example: Top basin on both maps  Calculate the midpoint between the gravimetric and magnetic centres found  = C55 and R105 C50 R100 C60 R110
    17. 17.  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 credibility points.
    18. 18.  All teams have submitted their answers. Basin centres are located.  Message in Inbox. All teams have answers and CPs awarded.
    19. 19.  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.
    20. 20.  Any restrictions involved? Yes, you need to watch for Environmentally Sensitive Areas.  What are we looking for? Hydrocarbon Prospects.  Where do we find prospects? In sedimentary basins  How do I find them? Interpreting 2D seismic and Common Risk Segment maps.
    21. 21. 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
    22. 22. (c) OLF Anticline trap Fault trap Stratigraphic trap Salt dome trap  Geological “pockets”, that might contain hydrocarbons.
    23. 23. Red areas You will not be allowed to bid, drill or operate in any of the red areas. Green areas Blocks in area may be awarded.
    24. 24.  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
    25. 25. Layer 3 Eocene 1500m below the surface Layer 2 Paleocene 2500m below the surface Layer 1 Cretaceous 3500m below the surface CRS. Common Risk Segment surveys tell you about the probability of a structure in the block/cell containing oil or gas Surface
    26. 26.  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.
    27. 27. Unprocessed Processed Interpreted Red is top of the sealing rock Green is top of the reservoir rock
    28. 28. Leakage
    29. 29. Leakage Sealant rock
    30. 30.  Buy 2D seismic from the survey shop
    31. 31. 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
    32. 32.  It takes time to process your request
    33. 33.  Red circles – navigate through the 2D seismic
    34. 34. Column Row Prospect, ReservoirBasin,Source
    35. 35.  Minimum bid is $250K  Maximum bid is $7.5M  Enter numbers without commas (ex: 250000)  You will bid for 3 licenses but each team will only be awarded one license  Highest bid wins the license  If two teams bid the same, the team with the most CP’s gets it  Random license awarded if none of your bids are high enough Submit your bid before the deadline!
    36. 36.  Three different blocks  Three bids  Example- Block 1123 Bid 250000
    37. 37.  Study Environmentally Sensivity Area maps to see which blocks to avoid  Use Common Risk Segment surveys to see which blocks to examine closer (look for green)  Buy and study many 2D surveys to identify which ones have the most potential traps, as well as the biggest traps.
    38. 38.  Message sent to all teams with the results  credibility Points are given for prosperity of the blocks you bid for  Every team has got one exploration license
    39. 39.  Company management has reviewed the licence that you were awarded and the potential cost to drill a well.  Although the possibility of finding oil is fair, the costs involved are large. They have asked you to spread the risk.  Challenge: Farm-out a minimum of 20% on your license and farm-in as much as you can on other good licences.
    40. 40.  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.
    41. 41.  Acquire 3D Seismic interpretations for the block you operate, and study the results from the licensing round-can send under “surveys” to possible partners  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 licences. Submit an offer for each viable licence, with amount offered and share wanted in whole %.
    42. 42.  Shows the subsurface structure in a cube.
    43. 43. Layer 1 Cretaceous Layer 2 Paleocene Layer 3 Eocene
    44. 44. 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” Min bid is $25000 and max is $1250000 per %
    45. 45. 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
    46. 46.  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.
    47. 47. 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
    48. 48.  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.
    49. 49. Click on drill
    50. 50.  Truck-mounted Rigs  Light Duty Rigs  Heavy Duty Rigs
    51. 51.  Max drilling depth is important  Rig cost = drilling days * day rate
    52. 52.  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.
    53. 53.  9 Star quality:  Good- costs more  Bad: - cheaper, but reliability is low  5 types of providers- Construction and Maintenance , Logistics, Well Services, Camp Services and Analysis
    54. 54.  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.  Oil spill control – 5% of overall drilling costs
    55. 55.  EIA: enviromental impact analysis shows where not to drill.  Place your mouse where to drill
    56. 56. Layer 1 Cretaceous Layer 2 Paleocene Layer 3 Eocene
    57. 57.  Too deep for the chosen rig.
    58. 58.  Volume Range in MBOE counts  Test may increase Proven MBOE if oil or gas found
    59. 59.  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.
    60. 60.  Volume Range  Proven Reserves  Calculation of licence value  Sales value  Costs  Value of Licence
    61. 61.  From Probable volume to proven reserves
    62. 62. Exploration well:  0 to 572 MBOE (after drilling)  11 to 466 MBOE (after testing) First appraisal well:  25 to 333 MBOE (after drilling)  34 to 310 MBOE (after testing) Second appraisal well:  65 to 250 MBOE (after drilling)  101 to 152 MBOE (after testing) Only proven MBOE counts
    63. 63. Challenge 3B Drilling
    64. 64.  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.
    65. 65.  Click on Apply for More Funds Tab.  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.  <10 credibility points: Apply for cash and be fined $5million for each $20million requested.
    66. 66. Exploration acreage: •Resources •Reserves •Production

    ×