Offshore e&p3.4

www.oilsim.com

Today’s Challenges

Environmental issues Team work and negotiation Critical decision making, analytical

skills, multi-tasking Learn through experience Economically viable volumes-

reducing uncertainty Return on Investment Function appreciation

You start with $700 millionYou can apply for more money later.

Create valueMeasured by the net value of the oil and gas fields discovered MINUS all costs involved.

Correct answers and sensible decisions are awarded with CPs

Complete Value Chain

Upstream

Today’s Challenges

Columns e.g C1, and C54,

Row

s e

.g. R

35

and R

16

3,

Block

Blocks are divided into smaller cellse g. R1C1

Challenge: Find three sedimentary basins in the area. Basins are sedimentary rocks in the deep subsurface where oil and gas has been generated.

Procedure: Buy and study magnetic and gravimetric surveys; and to submit the coordinates, column and row number for each basin centre.

Gravimetric surveys show the gravity in the sub-surface. Measured by airborne sensors.

Sedimentary rocks have lower densities than the surrounding crystalline rocks. Low gravitational pull means high probability of a basin below.

Basins have a lower gravitational pull. Crystalline rocks have higher

gravitational pull

Gravimetric survey:South-east quadrant

Magnetic surveys show similar information as gravimetric surveys. The sedimentary rocks in the basins have a lower concentration of magnetic materials than the surrounding crystalline rocks.

Sedimentary basins are the areas with the lowest magnetic field.

Basins have low magnetic field Non-basins have high magnetic fields.

Magnetic survey:North-west quadrant

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 CPs.

Today’s Challenges

All teams have submitted their answers. Basin centres are located.

Message in Inbox. All teams have answers and CPs awarded.

Sedimentary basins may contain oil and gas

The government has decided to put the blocks around one of the basins on offer

Challenge: Identify the 3 most promising blocks and submit a bid to the Government for these licences

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 spotsBlue areasBlocks in area may be awarded

Layer 3 Eocene1500m below the seabed

Layer 2 Paleocene2500m below the seabed

Layer 1 Cretaceous3500m below the seabed

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

2D seismic survey is a cross section of the geological layers along either a column or a row

2D seismic surveys are used for locating prospects

Unprocessed Processed

Interpreted Red is top of the sealing rock

Green is top of the reservoir rock

Leakage

Sealant rock

What type of data do you want?

Columns or Rows

Unprocessed or processed data

Interpreted or notOnly buy maximum

of 4 blocks of data at a time to speed up processing

The yellow hatched area on map can be clicked on and dragged to blocks of interest

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

Awarded 1 block Pay for 1 block Highest bid wins If equal, then team with highest

CP wins

Environmental Sensitive Areas map to see which blocks to avoid

Common Risk Segment surveys to see which blocks to examine closer

2D surveys seismic to identify which ones have the most (big) structures

Check water depth, and go for shallow water blocks if possible

Remember to submit 3 bids

Today’s Challenges

Message sent to all teams with the results

Credibility Points are given for prosperity of the blocks you bid for

Every team has got one exploration license

HQ is happy with the license awarded. Challenge: 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

Get others to invest 20% or more in your license – you can show/send 3D seismic

Shows the subsurface structure in a cube.

Layer 1 Cretaceous

Layer 2 Paleocene

Layer 3 Eocene

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.

Enter the percentage and total amount for have agreed to offerMinimum $100,000 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

Partners receive a proportional share of the net proceeds from oil and gas

The operator team makes all decisions regarding drilling

Teams can farm-out up to 70% of licence

Operators must keep 30% of licence

•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

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.

= Which drilling locations to avoid.

EIA: enviromental impact analysis shows where it will cost you more to drill.

Place your mouse where to drill

Layer 1 Cretaceous

Layer 2 Paleocene

Layer 3 Eocene

Oil spill or Gas Blowout control

Estimated cost

Volume Range in MBOE counts

Test may increase Proven MBOE if oil or gas found

From Probable volume to proven reserves

Exploration well: 0 to 1572 MBOE (after drilling) 11 to 1266 MBOE (after testing)

First appraisal well: 25 to 1033 MBOE (after drilling) 34 to 910 MBOE (after testing)

Second appraisal well: 65 to 850 MBOE (after drilling) 101 to 752 MBOE (after testing)

Only proven MBOE counts

After your first drill in each well, reprocess seismic

Decide which discoveries to drill how many appraisal wells into

Ultimately, you should either: Get a positive net present value, Or a conclusion that additional

appraisal wells will not result in a net present value

Click on Apply for More Funds Tab. 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.

Make a well plan for each reservoir in your block, choosing: Number of production wells Tubing size

Aiming to choose a plan that

maximises value of block Increased sales value Decreased drilling costs

Click the Surveys tab

Nodal analysis

Expected Production Profile

Highest well flow rate

Read the maximum well flow rate Most suitable Tube size

Most suitable tube

1. Click the Reservoir tab

2. Click the magnifyingglass for the reservoir

3. Study the data forthe reservoir

Click on Drilling Rig

1. Submit plans with different number of wells and tubing sizes

1. Review Reservoir information after each revised plan

2. Aiming to maximize sales value and minimize drilling costs, whilst increasing Recovery Factor

3. You can amend your well plans until the deadline

4. Credibility points – upto 100 kp if plans are optimal for all your reservoirs

5. After deadline – Value of Licence will be adjusted based on final Well Plan submitted

Plan the facilities to produce the oil and gas that has been found in the block

Maximize the value of the license block Maintain sales value Decrease facilities

costs Reduce risk

Environmental surveys

Earthquake survey legend

Waveheights

Hurricanes

Value Shown = income less expenses Discount factors: 0%-20%

0% 5% 20%

189M 118M 48M

1. Click the Reservoir tab

2. Click the magnifyingglass for the reservoir

3. Average seabed depthvisible here

Determine maximum production volumes of values of oil, gas and water(In gas fields it is gas, condensate and

water)

Estimated no. of barrels can be transported per day Different flowline (riser) and pipeline sizes = Different no. of barrels

Flowline size : Multiphase fluid from seabed

to platform (acting as flowline and riser)

Pipeline size : Oil and condensate to

storage tanks Gas to processing plant

Connect pipelines to Gas terminal and an Oil terminal

Plan the construction of facilities required to operate your platform

Submit a financial summary of the plan

Execute construction plan Minimize capital expenses Amend construction plan as issues

occur Get to FIRST oil!

Choose only 1 activity – where a Dotted line

Where a solid line exists, the task below the line must be completed before starting the task above the line

Considerations: Reach First Oil

within 21 periods of 90 days – TOTAL 1890 days

Time V. Cost Local Content

Activity completed

Activity delay – still ongoing

Issue with activity

Progress of activity

PART A Activity Hierarchy Survey – study activity

dependencies Vendor report - compare providers/local content Prepare construction plan Submit Planning Summary

PART B Execute Plan - as many activities as possible

within each period; provider for each activity Check Timeline chart to see progress Reassess/alter providers as issues occur

Financial consequences of your decision?

Other major drivers of decision Did country strategy play a role? Above-ground risks? Changeable market conditions? Impact on commercial contracts? Operating agreements affected? Other information to consider?