Offshore - Dubai -Introduction to Exploration

 You are an exploration
team in charge of a new
petroleum province.
 Multidisciplinary challenge: Enhance your
overall understanding of petroleum
exploration and field development.
 Create a Return on Investment

 You start with $200 million
 Create value
Net value of the oil and gas discovered MINUS
all costs involved
Knowledge points awarded
Sensible decisions and correct answers
KPs are a measure of ability and
credibility
Considered when bidding for blocks
Use when applying for funds

 Where and how to find hydrocarbons
 Licensing rounds
 Farm-in and Partnerships - negotiations
 Drilling rigs
 Sub-contractors
 Environmental issues
 Economically viable volumes
 Team work, Critical decision making,
analytical skills
 Multi-tasking

Columns e.g C1 to C112
Rowse.g.R1toR144
Block
Blocks are
divided into 64
smaller cells
e g. R52C110

 Challenge: Find three sedimentary basins
 Procedure:
 Buy and study magnetic and gravimetric surveys
 Submit the coordinates for each centre
 Column and row number for each basin centre

 Gravimetric surveys indicate
changes in the gravitational
pull of the Earth in different
areas of the sub-surface.
 Lower gravitational fields
indicates likelihood of low
density rocks –Sedimentary
rocks, porous and hopefully
containing hydrocarbons

Survey
shop
Gravimetric
survey of
North-west
area

 Magnetic surveys show
anomalies in in the expected
magnetic field of the Earth in
particular areas.
 Sedimentary rocks in the basins
have a lower concentration of
magnetic materials and lower
magnetic field than the
surrounding crystalline rocks.

 Magnetic
survey:
North-west
quadrant

 All four quadrant
surveys in map
context

 Locate edges of
the continous
basin structure
 Locate the
diagonals and
thus basin centre

 Example:
Top basin on both
maps
 Calculate the
midpoint
between the
gravimetric and
magnetic centres
found
 = C55 and R105
C50
R100
C60
R110

 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 KPs. All
three centres must be located
to get full knowledge points.

Message in Inbox:
 Shows results
 Answers
submitted
 KPs awarded

 The government has
decided to put the blocks
in one of the basins on
offer.
 Challenge: Identify the 3
most promising blocks
and offer an amount for
each of them.
Licensing
area

 Any restrictions involved? - Spawning grounds
 What are we looking for? - Prospects
 Where do we find prospects?
 In basins, where hydrocarbons have been
 1) are produced and 2) trapped
 How do I find them? - Geoscientific analysis
 2D seismic, Common Risk Segment maps

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

(c) OLF
Anticline trap
Fault trap
Stratigraphic
trap
Salt dome trap
 Geological “pockets”, that might contain hydrocarbons.

Red areas
You will not be awarded
blocks that contain any
red spots (spawning
grounds)
Blue areas
Blocks in area may be
awarded

Layer 3 Eocene
1500m below the seabed
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

 Traps can be found with
seismic surveys and
sound waves bouncing
off structures
 2D seismic survey is a
vertical cross section of
the geological layers
along either a column or
a row

Unprocessed Processed
Interpreted Red is top of the
sealing rock
Green is top of
the reservoir rock

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

 It takes time to process your request
 Created to order
 Moves to surveys once processed

 Red circles – navigate
through the 2D seismic
 Yellow square – Row 1
from Column 1-56

Column
Row
Prospect, ReservoirBasin,Source

 Three blocks
 Three amounts
 Min: $1M
 Max: $30M
 You will only get
awarded one block – and only pay for one
 Highest bid wins
 If equal, then team with highest KP wins

 Environmentally sensitive
areas – blocks to avoid
 Common Risk Segment
surveys – areas of higher
probability of prospects
 2D seismic – blocks with
most structures
 Final tip - Check water depth
- shallow water blocks

 Message sent to all
Results and KPs
 One license per
team

 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.

 Acquire 3D Seismic interpretations for the
block you operate, and study the results from
the licensing round
 Farm-out: Get others to invest 20% or more
in your license – you can send them surveys
 Farm-in: Send offers to other teams to buy
shares in their viable licenses. Submit an offer
for each viable license, with amount offered
and share wanted in whole %.

 Shows the subsurface structure in a cube.

Layer 1 Cretaceous
Layer 2 Paleocene
Layer 3 Eocene
Prospects
are no
guarantee of
oil or gas

 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.

Either accept the
amount or % the
license owner
requests, or amend
the amounts to your
own offer
Add a message to
the seller
Press “Send offer”
Minimum of
$100000 per %

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

 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.

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

 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.

•Before choosing a
rig, you need to
check your water
depth
Find this at the
bottom of the
BLOCK page

 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

 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.

Upto 9 Star quality-
 Good: normally
costs more
 Bad: cheaper,
but reliability is
low, so you risk
extra drilling time
and extra costs

 EIA survey: more knowledge about the area.
 Less probability for drilling problems.
 Less severe consequences if you run into
problems.

 EIA:
enviromental
impact analysis
shows where
not to drill.
 Place your
mouse where
to drill

 Certain problems can occur if Service
Provider Selection is poor quality
 Other penalties can occur if you drill in areas
indicated as problematic in the
Environmental ImpactAssessment
 As in real life, problems can occur randomly
and these are also applied with fines levied
accordingly.

Layer 1 Cretaceous
Layer 2 Paleocene
Layer 3 Eocene

 Proven volume (MBOE) counts
 Test may increase proven volume
 Remember to tick the boxes!

 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.

25% of 8 MBOE @ $50
12% $39.9M
Expected costs if
you developed the
field (capex) and
produced
the oil (opex)
If total expenses are
higher than the sales
value, the value of the
license is zero

 From Probable volume to proven reserves

First well:
 0 to 1572 MBOE (after drilling)
 11 to 1266 MBOE (after testing)
Second well:
 25 to 1033 MBOE (after drilling)
 34 to 910 MBOE (after testing)
Only proven MBOE counts

 Click on Apply for More FundsTab.
 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.

 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.

Offshore - Dubai -Introduction to Exploration

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