offshore 3.4 presentation
DESCRIPTION
TRANSCRIPT
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
Credibility points awardedSensible decisions and correct answersCPs are a measure of ability and credibilityConsidered when bidding for blocksUse 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
Complete Value Chain
Upstream
www.oilsim.com
www.oilsim.com
Blocks are divided into smaller cellse g. R1C1
Columns e.g C1 and C54
Rows e.g R15 and R97
Home page
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 CPs. All three centres must be located to get full credibility points.
Message in Inbox:
Shows results Answers
submitted CPs 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 Common Risk Segment maps and 2D seismic
1. SOURCE ROCKwhere organic material is put under sufficient pressure
2. MIGRATION ROCKwhere hydrocarbons are driven through
3. CAP ROCKImpermeable rock that stops migration of hydrocarbons 4.
PROSPECT
(c) OLFAnticline trap
Fault trap
Stratigraphic trap
Salt dome trap
Geological “pockets”, that might contain hydrocarbons.
Red areasYou will not be awarded blocks that contain any red spots (spawning grounds)Blue areasBlocks in area may be awarded
Layer 2 Paleocene
Layer 1 Cretaceous
Surface
Which blocks? Shortlist blocks to
investigate further. Review Common Risk
Segment -Green indicates highest probability of containing prospects
Check block water depths Layer 3 Eocene Block
tab shows water depth
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 4 blocks 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
Leakage?
Leakage?
Column
Row
Prospect, ReservoirBasin,Source
Three blocks Three amounts
Min: $1M Max: $30M
You will only getawarded one block – and only pay for one
Highest bid wins If equal, then team with highest CP
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 CPs
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.
Input the % you would like to own of their licence Input amount for the whole % - minimum offer is $100000 per %Add a message to the sellerPress “Send offer”
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 Upto 100m
Semi-submersible rigs for middle waters Upto 600m
Drillships for the deepest waters Over 600m
Rig cost = drilling days * day rate
Limited number of rigs
20 minutes to use Queues Prices can change
Upto 9 Star quality-
Good: normally costs more
Bad: cheaper, but reliability
is low, so you risk extra drilling time and extra costs
EIA: enviromental impact analysis shows where not to drill.
Place your mouse where to drill
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 Impact Assessment
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! Tests Take 10 days
25% of 8 MBOE @ $50
12% $39.9M
Expected costs ifyou developed thefield (capex) andproducedthe oil (opex)
If total expenses arehigher than the salesvalue, the value of thelicense is zero
From Probable volume to proven reserves
Appraisal wells - proven reserves increase Range between proven and possible is decreased
397 MBOE @ $50 including 25% recovery factor, 0.8 production factor, 10% discount factor)12% $39.9M
$6 of $50 = 12% tax)
Expected costs ifyou developed thefield (CAPEX) andproducedthe oil (OPEX)
Now total expenses are lower than the sales value and so we have a positive licence value
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.
Expensive money if less than 10 credibility 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.