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OILSIM EXPLORATION

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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OILSIM EXPLORATION

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  1. OILSIMEXPLORATION Svalex 2007 Longyearbyen, Svalbard, Norway 20 - 23 August 2007

  2. 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

  3. 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

  4. 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

  5. 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)

  6. 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

  7. 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

  8. Oil & Gas Industry • Upstream • Exploration • Production • Downstream • Refining • Distribution

  9. 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

  10. Map Columns (1 to 112) 1000 m deep Cell (112,89) Rows (1 to 152) Block 168

  11. Login www.oilsim.com

  12. Main screen

  13. 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

  14. Surveys

  15. 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

  16. Gravimetric surveys

  17. Magnetic surveys

  18. More detail North East

  19. Quarter map survey

  20. Enter decision

  21. 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

  22. 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

  23. 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”)

  24. Migration Prospect Play Migration Basin

  25. Prospect Seal Reservoir Migration

  26. Real Seismic

  27. 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

  28. 2D Seismic example

  29. Prospects Top of sealing rock Top of reservoir rock

  30. Cross-sections Column Row Basin, Source Prospect, Reservoir

  31. Wells 179

  32. 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 -)

  33. Common Risk Segment • Prospect probability • Red: low • Orange: medium • Green: high

  34. 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

  35. Enter bid

  36. 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

  37. Task 2 • Submit your bid before the deadline • After the deadline, all bids are evaluated, and each team gets one and only one licence

  38. 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

  39. 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)

  40. 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 %)

  41. Farm-in

  42. Send an offer

  43. 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

  44. 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

  45. 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

  46. 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

  47. Available Rigs

  48. Drilling days

  49. Drilling Depths “water depth” Seabed Layer 3 1500 m below seabed 2500 m below seabed Layer 2 3500 m below seabed Layer 1

  50. Seabed Depth

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