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OILSIM EXPLORATION. Svalex 2007 Longyearbyen, Svalbard, Norway 20 - 23 August 2007. Schedule - Example. Monday 20 August 16.00 Introduction to OILSIM Exploration 16.30 Simulation Phase 1 starts (Find Basins) 17.00 Phase 1 Deadline. Phase 2 (First Licensing Round opens)
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OILSIMEXPLORATION Svalex 2007 Longyearbyen, Svalbard, Norway 20 - 23 August 2007
Schedule - Example Monday 20 August 16.00 Introduction to OILSIM Exploration 16.30 Simulation Phase 1 starts (Find Basins) 17.00 Phase 1 Deadline. Phase 2 (First Licensing Round opens) 18.00 End Day 1 Tuesday 21 August 16.00 Oilsim Exploration continues 16.30 First Licensing Round deadline 16.45 Phase 3 starts: Farm-In, Order Rig, Providers, Drilling Location, Testing (continues the rest of the day) 17.45 2nd Licensing Round opens 18:15 2nd Licensing Round deadline 18:55 Simulation ends 18.55 Debriefing 19.00 End Day 2
Schedule - Example OilSim Field Development Wednesday 22 August 10.00 Introduction to OilSim Field Dev. 10.30 Challenge 1 Reservoir characterization 11.00 Challenge 2 – Design Basis 11.30 Challenge 3 – Concept Solutions 12.00 End first part ------------------------------------------------------------------------- 16.00 Challenge 4 – Planning 16.30 End of the 1 Cycle (Results) 17.00 2nd Cycle starts - Challenge 1 Reservoir characterization 17.30 Challenge 2 – Design Basis 18.00 Challenge 3 – Concept Solutions 18.30 Challenge 4 – Planning 18.50 End of simulation 18.50 Debriefing 19.00 Course ends
Schedule - Example OilSim Exploration Competition Thursday 23 August 09.30 Simulation Phase 1 starts (Find Basins) 09.40 Phase 1 Deadline. Phase 2 (First Licensing Round opens) 10.20 First Licensing Round deadline 10.20 Phase 3 starts: Farm-In, Order Rig, Providers, Drilling Location, Testing (continues the rest of the day) 10.40 2nd Licensing Round opens 11.10 2nd Licensing Round deadline 11.45 Simulation ends 11.45 Debriefing 12.00 End
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)
Money • You start with $200M • 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
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
Oil & Gas Industry • Upstream • Exploration • Production • Downstream • Refining • Distribution
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
Map Columns (1 to 112) 1000 m deep Cell (112,89) Rows (1 to 152) Block 168
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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
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
More detail North East
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
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
Second task • Bid to get an exploration licence • Exploration licence: A permission from the Government to explore a block • Procedure • Buy and study Common Risk Segment Maps and 2D Seismic surveys • Submit 3 bids • Block number • Amount offered to Government (“bonus”)
Migration Prospect Play Migration Basin
Prospect Seal Reservoir Migration
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
Prospects Top of sealing rock Top of reservoir rock
Cross-sections Column Row Basin, Source Prospect, Reservoir
Wells 179
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 -)
Common Risk Segment • Prospect probability • Red: low • Orange: medium • Green: high
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
Remarks • Minimum bonus: 1000000 • 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
Task 2 • Submit your bid before the deadline • After the deadline, all bids are evaluated, and each team gets one and only one licence
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
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)
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 2D Seismic surveys • Submit one offer for each viable licence • Amount offered • Share wanted (in whole %)
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
Task 3.1 • Study 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 prospects
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
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
Drilling Depths “water depth” Seabed Layer 3 1500 m below seabed 2500 m below seabed Layer 2 3500 m below seabed Layer 1