OilSim Exploration

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OilSim Exploration

• OLF OILSIM 2008

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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)

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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

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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

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Oil Gas Industry

• Upstream
• Exploration
• Field Development
• Production
• Downstream
• Refining
• Distribution

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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

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Map
Columns (1 to 112)
600 sea bed depth
Cell (73,66)
134
Rows (1 to 152)
Block 134
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Login
www.oilsim.com
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Main screen
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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

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Surveys
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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) -gt Basins
• High gravity (red) -gt Crystalline rocks

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Gravimetric surveys
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Magnetic surveys
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More detail
North East
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Quarter map survey
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Enter decision
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Task 1

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

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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

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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)

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Migration
Prospect
Play
Migration
Basin
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Prospect
Seal
Reservoir
Migration
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Real Seismic
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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

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2D Seismic example
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Prospects
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Cross-sections
Column
Row
Basin, Source
Prospect, Reservoir
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Wells
179
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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 -)

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Common Risk Segment

• Prospect probability
• Red low
• Orange medium
• Green high

There is one CRS for each geological layer
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Common Risk Segment
Band 3 Eocene
Band 2 Paleocene
Band 1 Creataceous
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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

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Spawning Ground Survey
Red AreaSpawning Grounds You will not be
awarded blocks that contain any red area
Blue AreaNot Spawning Grounds
The survey covers the whole area
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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

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Enter bid
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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 -gt more KPs and higher
  probability for success

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Task 2

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

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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

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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)

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Task 3.1 Farm-out

• Get others 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 )

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Farm-in
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Send an offer
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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

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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

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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

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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

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Available Rigs
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Drilling days
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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
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Seabed Depth
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Task 3.2 Rigs
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Rigs

• Limited number of rigs available
• You can order a rig
• Start using it within 20 minutes
• Not enough for all
• Wait in a queue, if another team is using the rig
• Rig day rates are dynamic

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Task 3.3 Providers
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Track Record
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Select Providers
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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

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Environmental Impact Assessment

• Buy an EIA survey to get more knowledge about the
  area
• EIA equals
• Less probability for drilling problems
• Less severe consequences if you run into problems
• In the EIA you can also see which drilling
  locations to avoid

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3D Seismic

• Shows the structure
• in one (of the three) horizons
• in one block
• Look out for tops
• a top a trap a prospect

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3D Seismic
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Three targets
Layer 3 Eocene
Column 60, Row 79
Layer 2 Paleocene
Layer 1 Creataceous
Column 60, Row 78
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Select Positions
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Drilling position 3
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Drilling position 2
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Budget
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Drilling results
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Drilling result
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Task 3.5 Testing

• If you discover a field-gt 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)

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Test decision
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Field value
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Prospects
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Licence Value
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Appraisal
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Appraisal

• From Probable volume to proven reserves

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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

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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