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OilSim Exploration

OilSim Exploration. OLF OILSIM 2008. Overview. Purpose: Enhance your overall understanding of petroleum exploration Multidisciplinary challenge You are an exploration team in charge of a new petroleum province Your task is to get maximum return on investment (ROI). Money.

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OilSim Exploration

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  1. OilSim Exploration OLF OILSIM 2008

  2. Overview • Purpose: Enhance your overall understanding of petroleum exploration • Multidisciplinary challenge • You are an exploration team in charge of a new petroleum province • Your task is to get maximum return on investment (ROI)

  3. Money • You start with $200 Million • You can apply for more money later • Value: • Net value of the oil fields discovered • MINUS costs (surveys, wells, etc.) • Winning team: • highest return on investment (ROI) • ROI = Earnings / Funds received

  4. Learning Points • Where and how to find oil • Surveys used in exploration • Licensing rounds • Farm-in and Partnerships • Rigs and Sub-contractors • Addressing environmental issues • Reducing uncertainty • Economically viable volumes

  5. Oil & Gas Industry • Upstream • Exploration • Field Development • Production • Downstream • Refining • Distribution

  6. Structure • Phase 1: Find Basins • Phase 2: Bid for Licences • Phase 3: Drilling • 3.1 Farm-in • 3.2 Order Rig • 3.3 Select Providers • 3.4 Select Position • 3.5 Testing

  7. Map Columns (1 to 112) 600 sea bed depth Cell (73,66) 134 Rows (1 to 152) Block 134

  8. Login www.oilsim.com

  9. Main screen

  10. First task • Find the 3 basins in the area • Basin: Sedimentary rocks in the deep subsurface where oil and gas was generated • Procedure • Buy and study magnetic and gravimetric surveys • Submit 3 block numbers; one for each basin centre

  11. Surveys

  12. Gravimetric surveys • Gravimetric surveys show the gravity in the sub-surface • Sedimentary rocks (“basins”) have lower densities than the surrounding crystalline rocks • Low gravity (green) -> Basins • High gravity (red) -> Crystalline rocks

  13. Gravimetric surveys

  14. Magnetic surveys

  15. More detail North East

  16. Quarter map survey

  17. Enter decision

  18. Task 1 • Possible to get between 0 and 100 knowledge points (KP) • KP’s can be used e.g. when you apply for money • Must be solved before deadline • After the deadline, all submissions are evaluated

  19. Task 1 solved • All basins are located • Message sent to all teams with the results • Oil and gas is close to the basins • Next step: First licensing round • The blocks around one of the basins are on offer

  20. Second task • Bid to get a exploration licence • Exploration licence: A permission from the Government to explore a block • Procedure • Buy and study Common Risk Segment Maps, 2D Seismic surveys, and Spawning Ground Maps • Submit 3 bids • Block number • Amount offered to Government (“bonus”)

  21. Migration Prospect Play Migration Basin

  22. Prospect Seal Reservoir Migration

  23. Real Seismic

  24. 2D Seismic surveys • A 2D Seismic survey is a cross section of the geological layers • along either a column or a row • Is used for locating prospects • Look out for traps • Three separate geological layers

  25. 2D Seismic example

  26. Prospects Top of sealing rock Top of reservoir rock

  27. Cross-sections Column Row Basin, Source Prospect, Reservoir

  28. Wells 179

  29. Remarks • In OilSim, there is only one type of trap: the four-way closure structural trap • in reality, there are several other types • Three prospecting systems • 3. Eocene (1.500 m below seabed) • 2. Paleocene (2.500 m -) • 1. Cretaceous (3.500 m -)

  30. Common Risk Segment • Prospect probability • Red: low • Orange: medium • Green: high There is one CRS for each geological layer

  31. Common Risk Segment Band 3 Eocene Band 2 Paleocene Band 1 Creataceous

  32. Spawning Grounds There are spawning ground areas in the map – these are environmentally sensitive areas where fish breed Some spawning grounds might be in the blocks that have been offered However, no licences will be awarded in blocks that are spawning grounds To find out which blocks are spawning grounds, you can buy a Spawning Ground Survey

  33. Spawning Ground Survey 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

  34. Tips • Study spawning ground maps to see which blocks to avoid • Use CRS to see which blocks to study • Buy and study many 2D surveys • Focus on shallow water blocks • It is cheaper to drill exploration wells in shallow water • It is more economically viable to produce oil and gas in shallow water

  35. Enter bid

  36. Bidding • Minimum bonus: 1000000 • Maximum bonus: 30000000 • You will only get one licence • Highest bid gets the licence • If you lose on all three blocks, you will get a random licence (of the ones that are left) • Do submit 3 bids -> more KP’s and higher probability for success

  37. Task 2 • Submit your bid before the deadline • After the deadline, all bids are evaluated, and each team gets one and only one licence

  38. Task 2 solved • Every team has got one exploration licence • Message sent to all teams with the results • Knowledge Points: a measure of how prosperous the blocks the team bid for were • Next step: Farm-in

  39. Farm-in & -out • The headquarters of you company has evaluated the licence that you got awarded • Although the possibility of finding oil is fair, the costs involved are large, and the headquarters wants you to spread the risk. • This is accomplished by: • investing in other licences (farm-in), and • letting other invest in your licence (farm-out)

  40. Task 3.1 Farm-out • Get other’s to invest 20% or more in your licence (“farm-out”) • You can only send farm-in offers (!) • Offers to buy parts of other licences • Procedure for farming in: • Study CRS and 2D Seismic surveys • Submit one offer for each viable licence • Amount offered • Share wanted (in whole %)

  41. Farm-in

  42. Send an offer

  43. Partnerships • Partners pay their share of all future costs incurred by the partnership. • Partners receive their share of the net proceedings from any oil found on the licence • The operator team takes all decisions regarding acquirement of 3D seismic, drilling of wells and testing of wells

  44. Task 3.1 • Study CRS and 2D seismic surveys of the other licences • Submit your bids • Minimum amount 100,000 for 1% • You are not allowed to drill before at least 20% of your licence has been farmed out • You can farm-in & -out at any time • Partners in a block get all info about drilled wells and discovered oil and gas fields

  45. Task 3.1 • Partnerships will be established every time a seller accepts an offer • On the main page, you can see all the licences • The licences you operate • The licences you have invested in • Other licences • Next task: order rig

  46. Task 3.2 Rig • 3 rig types • Drillships • Semi-submersibles • Jack-up rigs • Different water depths, Different day rates • Rig cost = drilling days * day rate

  47. Available Rigs

  48. Drilling days

  49. Drilling Depths “water depth” Seabed Layer 3 Eocene 1500 m below seabed 2500 m below seabed Layer 2 Paleocene 3500 m below seabed Layer 1 Cretaceous

  50. Seabed Depth

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