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Slide 1: OilSim intro Oktober, 2007
Slide 2: Overview • Enhance your overall understanding of petroleum exploration • Common platform to work on • Multidisciplinary challenge • You are an exploration team in charge of a new petroleum province • Your task is to get maximum return on investment (ROI)
Slide 3: Money • You start with $200Millions – You can apply for more money later • Earnings: – Net value of the oil fields discovered – MINUS costs (surveys, wells, etc.) • Winning team: – highest return on investment (ROI) – ROI = Earnings / Funds received
Slide 4: Learning Points • • • • • • • Where and how to find oil Surveys used in exploration Licensing rounds Farm-in and Partnerships Rigs and Sub-contractors Reducing uncertainty Economically viable volumes
Slide 5: Oil & Gas Industry • Upstream – Exploration – Development – Production • Downstream – Refining – Distribution
Slide 6: Structure • Phase 1: Find Basins • Phase 2: Bid for Licences • Phase 3: Drilling – 3.1 – 3.2 – 3.3 – 3.4 – 3.5 Farm-in Order Rig Select Providers Select Position Testing
Slide 7: Map Columns (1 to 112) 600 sea bed depth Rows (1 to 152) 134 Cell (73,66) Block 134
Slide 8: Login www.oilsim.com
Slide 9: Main screen
Slide 10: First task • Find the 3 basins in the area • Basin: Sedimentary rocks in the deep subsurface where oil and gas was generated • Procedure 1.Buy and study magnetic and gravimetric surveys 2.Submit 3 block numbers; one for each basin centre
Slide 11: Surveys
Slide 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
Slide 13: Gravimetric surveys
Slide 14: Magnetic surveys
Slide 15: More detail North East
Slide 16: Quarter map survey
Slide 17: Enter decision
Slide 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
Slide 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
Slide 20: Second task • Bid to get a exploration licence • Exploration licence: A permission from the Government to explore a block • Procedure 1. Buy and study Common Risk Segment Maps and 2D Seismic surveys 2. Submit 3 bids – Block number – Amount offered to Government (“bonus”)
Slide 21: Migration Prospect Play Basin Migration
Slide 22: Prospect Seal Reservoir Migration
Slide 23: Common Risk Segment • Prospect probability – Red: low – Orange: medium – Green: high There is one CRS for each geological layer
Slide 24: Common Risk Segment Band 3 Eocene Band 2 Paleocene Band 1 Creataceous
Slide 25: Real Seismic
Slide 26: 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
Slide 27: 2D Seismic example
Slide 28: Prospects Top of sealing rock Top of reservoir rock
Slide 29: Cross-sections Column Row Basin, Source Prospect, Reservoir
Slide 30: Wells 9 17
Slide 31: 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 -)
Slide 32: Tips • 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
Slide 33: Enter bid
Slide 34: Remarks • • • • • 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
Slide 35: Task 2 • Submit your bid before the deadline • After the deadline, all bids are evaluated, and each team gets one and only one licence
Slide 36: 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
Slide 37: 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)
Slide 38: 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: 1. Study 2D Seismic surveys 2. Submit one offer for each viable licence – Amount offered – Share wanted (in whole %)
Slide 39: Farm-in
Slide 40: Send an offer
Slide 41: 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
Slide 42: Task 3.1 • Study 2D seismic surveys of the other licences • Submit your bids • 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 prospects – Minimum amount 100,000 for 1%
Slide 43: 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
Slide 44: 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
Slide 45: Available Rigs
Slide 46: Drilling days
Slide 47: Drilling Depths Seabed Layer 3 Eocene Layer 2 Paleocene Layer 1 Cretaceous “water depth” 1500 m below seabed 2500 m below seabed 3500 m below seabed
Slide 48: Seabed Depth
Slide 49: Task 3.2 Rigs
Slide 50: Rigs • Limited number of rigs available • You can order a rig – use it within 20 minutes • Not enough for all – Wait in a queue, if another team is using the rig • Rig day rates are dynamic
Slide 51: Task 3.3 Providers
Slide 52: Track Record
Slide 53: Select Providers
Slide 54: Task 3.4 Position • You have to choose where to drill – Which cells? • ..and how deep to drill – Either to the Eocene horizon – Through the Eocene to the Paleocene horizon, – or through the Eocene, the Paleocene, and to the Cretaceous horizon
Slide 55: 3D Seismic • Shows the structure: – in one (of the three) horizons – in one block • Look out for “tops” – a top = a trap = a prospect
Slide 56: 3D Seismic
Slide 57: Three targets Layer 3 Eocene Column 60, Row 79 Layer 2 Paleocene Layer 1 Creataceous Column 60, Row 78
Slide 58: Select Positions
Slide 59: Summary
Slide 60: Drilling position 3
Slide 61: Drilling position 2
Slide 62: Conf. & Budget
Slide 63: Drilling results
Slide 64: Drilling result
Slide 65: Task 3.5 Testing • If you discover a field-> decide whether you want more information about that field • You get more information by doing a production test (and other tests) • Tests take 10 days per field • Tests have the same day-rate as the drilling (you use the same providers)
Slide 66: Test decision
Slide 67: Field value
Slide 68: Prospects
Slide 69: Licence Value
Slide 70: Appraisal
Slide 71: Appraisal – From Probable volume to proven reserves
Slide 72: Narrowing ranges • First well: – 0 to 572 MBO (after drilling) – 11 to 266 MBO (after testing) – Proven volume: 11 MBO • Second well – 11 to 233 MBO (after drilling) – 35 to 210 MBO – Proven volume: 35 MBO
Slide 73: Continue... • Drill appraisal wells to narrow the uncertainty (get proven volumes) • Drill into other prospects • Farm-in and -out • Two additional licensing rounds • Apply for more money, if you run out of cash • Winner: highest ROI