 www.oilsim.

com
 Review Challenge

Available
Decision
data

Analysis
Today’s Challenges
Challenge 1 Finding basins
Challenge 2 Prospecting
Challenge 3 Exploration Drilling
Challenge 4 Depletion Plan
Challenge 5 Facilities Plan
Challenge 6 Construction Project
Challenge 7 Operations
 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 million
You can apply for more money later.
 Create value
Measured 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
Challenge 1 Finding basins
Challenge 2 Prospecting
Challenge 3 Exploration Drilling
Challenge 4 Drainage Plan
Challenge 5 Facilities Plan
Challenge 6 Construction Project
Challenge 7 Operations
 Columns e.g C1, and C54,

Block Rows e.g. R35 and R163,

Blocks are
divided into
smaller cells
e 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
C50
 Example:
Top basin on both
R100
maps
 Calculate the
midpoint
between the
C60
gravimetric and
magnetic centres
R110
found
 = C55 and R105
 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
Challenge 1 Finding basins
Challenge 2 Prospecting
Challenge 3 Exploration Drilling
Challenge 4 Depletion Plan
Challenge 5 Facilities Plan
Challenge 6 Construction Project
Challenge 7 Operations
 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
2. MIGRATION ROCK
where hydrocarbons
are driven through

3. CAP ROCK
1. SOURCE ROCK Impermeable
where organic rock that stops
material is put under migration of
sufficient pressure hydrocarbons 4. PROSPECT
  Geological “pockets”, that might contain hydrocarbons.

Anticline trap Stratigraphic

(c) OLF
Salt dome trap
trap
Fault trap
Red areas
You will not be awarded
blocks that contain any
red spots

Blue areas
Blocks in area may be
awarded
CRS. Common Risk Segment
surveys tell you about the
probability of a structure in
the block/cell containing oil
or gas Surface

Layer 3 Eocene
1500m below the seabed

Layer 2 Paleocene
2500m below the seabed

Layer 1 Cretaceous
3500m below the seabed
 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
not

Only buy maximum of 4 The yellow hatched area on

blocks of data at a time map can be clicked on and
to speed up processing dragged to blocks of interest
 Red circles – navigate
through the 2D seismic

 Yellow square – Row 1

from Column 1-56
 Column

Row

Basin,Source Prospect, Reservoir

 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
Challenge 1 Finding basins
Challenge 2 Prospecting
Challenge 3 Exploration Drilling
Challenge 4 Depletion Plan
Challenge 5 Facilities Plan
Challenge 6 Construction Project
Challenge 7 Operations
 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 3 Eocene

Layer 2 Paleocene

Layer 1 Cretaceous
 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
offer
Minimum
$100,000 per %
Add a message
to the seller
Press “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 3 Eocene

Layer 2 Paleocene

Layer 1 Cretaceous
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 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 Credit points:
Apply for cash and be fined $5million for each
$20million requested.
Challenge 1 Finding basins
Challenge 2 Prospecting
Challenge 3 Exploration Drilling
Challenge 4 Depletion Plan
Challenge 5 Facilities Plan
Challenge 6 Construction Project
Challenge 7 Operations
 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

 Read the maximum well flow rate
 Most suitable Tube size
Most
suitable
tube

Highest
well flow
rate
1. Click the Reservoir tab

2. Click the magnifying

glass for the reservoir

3. Study the data for

the 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
Challenge 1 Finding basins
Challenge 2 Prospecting
Challenge 3 Exploration Drilling
Challenge 4 Depletion Plan
Challenge 5 Facilities Plan
Challenge 6 Construction Project
Challenge 7 Operations
 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
Waveheights

Hurricanes
Earthquake survey
legend
  Value Shown = income less expenses
 Discount factors: 0%-20%

0% 5% 20%
16,000 16,000 16,000
14,000 14,000 14,000
12,000 12,000 12,000
10,000 10,000 10,000
8,000 8,000 8,000
6,000 6,000 6,000
4,000 4,000 4,000
2,000 2,000 2,000
- - -
1 3 5 7 9 11 13 15 17 19 21 23 25 1 3 5 7 9 11 13 15 17 19 21 23 25 1 3 5 7 9 11 13 15 17 19 21 23 25

189M 118M 48M

1. Click the Reservoir tab

2. Click the magnifying

glass for the reservoir

3. Average seabed depth

visible 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
Challenge 1 Finding basins
Challenge 2 Prospecting
Challenge 3 Exploration Drilling
Challenge 4 Depletion Plan
Challenge 5 Facilities Plan
Challenge 6 Construction Project
Challenge 7 Operations
 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!
 Where a solid
line
exists, the
Choose only 1 task below
activity – where a the line must
Dotted line 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
Challenge 1 Finding basins
Challenge 2 Prospecting
Challenge 3 Exploration Drilling
Challenge 4 Depletion Plan
Challenge 5 Facilities Plan
Challenge 6 Construction Project
Challenge 7 Operations
 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?