You are an exploration team in charge of a new petroleum province. Your task is to get maximum return on investment (ROI)

Multidisciplinary challenge: Enhance your overall understanding of petroleum exploration and field development.

You start with $200 millionYou can apply for more money later.

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

Winning team has highest ROIReturn on investment is calculated as Value of oil discovered DIVIDED WITH Funds received.

You get KPs for doing wellduring the simulationCorrect answers and sensibledecisions are awarded with KPs

KPs are a measure of ability and credibilityAccumulated KPs are used when bidding for blocks and applying for funds from the HQ

Where and how to find hydrocarbons. Various surveys during exploration.

Licensing rounds. Farm-in and Partnerships. Drilling rigs and Sub-contractors. Environmental issues. Economically viable volumes. Reducing

uncertainty. Team work and negotiation. Critical decision

making, analytical skills. Multi-tasking.

Oil

Gas

www.oilsim.com

Columns

Row

sBlock

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 gravity means high probability of a basin below.

Low gravity are basins. High gravity are crystalline rocks

Gravimetric survey:South-east quadrant

All four quadrant surveys in map context.

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

All four quadrant surveys in map context.

Locate edges of the continous basin structure (yellow area)

Locate the diagonals and thus basin centre

Locate edges of the continous basin structure (purple area)

Locate the diagonals and thus basin centre

Calculate the average columns and rows

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

Message in Inbox. All teams have answers and KPs 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 offer an amount for each of them.

Any restrictions involved? Yes, you better watch out for spawning grounds.

What are we looking for? Prospects. Not oil or gas as such, but potential reserves of hydrocarbons.

Where do we find prospects? In sedimentary basins, where hydrocarbons 1) are produced and 2) trapped

How do I find them? Traps can be seen with 2D seismic, but you need Common Risk Segment maps to identify the probability of finding hydrocarbons.

SOURCE ROCKwhere organic material is put under sufficient pressure

MIGRATION ROCKwhere hydrocarbons are driven through

CAP ROCKstops migration of hydrocarbons

Subsurface structure identified to be likely to contain hydrocarbons

What makes a prospect? Source rock, where oil and gas is

generated Porous migration rock, that

routes the hydrocarbon into the prospect

Porous reservoir rock, which can contain the oil or gas

Impermeable cap rock that prevents further migration of hydrocarbons. Known as a trap

(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

Blue areasBlocks in area may be awarded

CRS is made by geologists asking: Is there a sedimentary basin and a migration route

into the prospects in the area? Is there porous reservoir rock in the area, so that

the oil or gas can be stored? Is there a sealing rock in the area, so that the oil

and gas can be trapped? If all are positive, then green If some negative, then orange If mostly negative, then red

Three prospecting systems:Not related to each other

Eocene 1500m below the seabed

Paleocene 2500m below the seabed

Cretaceous 3500m below the seabed

Layer 3 Eocene

Layer 2 Paleocene

Layer 1 Cretaceous

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

Green is bottom of the reservoir

Red is bottom of the cap rock

A trap is shown as a top or bump

With interpretation

Three separate geological layers/horizons

See block numbers on top

Look out for Anticline traps (four-way structural traps)

Combine rows and columns

Column

Row

Prospect, ReservoirBasin,Source

Long process: Invitation or announcement Qualification with or without Pre-qualification Preparation, data acquisition, evaluation Establishment of partnerships Priority, recommendation for bidding Application, documentation, bid Announcement of bidding results license negotiation Work programme

Minimum bid is USD 1000000 (one million) Maximum bid is USD 3000000 (thirty million) You should bid for 3 licenses BUT each team will only be awarded one

license Highest bid gets the license If two teams bid the same, the team with the

most KP’s gets it Random license awarded if none of your bids

are high enoughSubmit your bid before the deadline

Three different blocks

Three bids

1 Example-Block 591Bid 2000000

Study spawning ground maps to see which blocks to avoid

Use Common Risk Segment surveys to see which blocks to examine closer

Buy and study many 2D surveys for the green blocks from the CRS surveys to identify which ones have the most (big) structures)

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

Message sent to all teams with the results

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

Every team has got one exploration license

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

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

“Tops” are prospects, where hydrocarbons may be.

Prospects are no guarantee for 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.

Farm-out: When a license owner sells a % of their own licenseTeams are able to put a Farm-out offer on the market for other teams to see Choose the % you wish to farm-out and the Amount you will accept for this %

•Choose which surveys to show others•Place your farm-out offer on market•Others can then then see your offer and send you their own farm-in offers

Farm-in: When an investor buys a % of another team’s license

Study surveys – 3D and 2D seismics and CRS of the other licenses.

Either accept the amount or % the license owner requests, or amend the amounts to your own offerAdd 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.

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

Seabed

3500 m below surface

Layer 3 Eocene

Layer 2 Paleocene

Layer 1 Cretaceous

19 days

35 days

45 days

1500 m below surface

2500 m below surface

v

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 not to drill.

Place your mouse where to drill

Few: limited number of rigs available. If you get one: start using it within 20

minutes. If you don’t: wait in a queue, if another team

is using the rig. Price can change: rig day rates are dynamic.

Star quality: Good: normally

costs more Bad: cheaper, but reliability is

low, so you risk extra drilling time and extra costs

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

Where to drill: which cells on each layer. One cell deviation between layers.

How deep to drill:

Layer 1 Cretaceous

Layer 2 Paleocene

Layer 3 Eocene

Too deep for the chosen rig.

Volume Range in MBOE counts

Test may increase Proven MBOE if oil or gas found

Only if you discover a field – find Oil or Gas You decide whether you want more

information about that field More information by doing a production test

(and other tests) Tests costs. Tests take 10 days per field. Tests

have the same day-rate as the drilling if you use the same providers.

From Probable volume to proven reserves

First well: 0 to 572 MBOE (after drilling) 11 to 266 MBOE (after testing)

Second well: 11 to 233 MBOE (after drilling) 35 to 210 MBOE (after testing)

Only proven MBOE counts.

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.

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.

Exploration acreage:•Resources•Reserves•Production