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UPPP2015

Competition & Game Rules

About the competition


The online competition is a turn-based strategic game aiming to imitate reality as much as
possible. However it still contains several simplifications to make the game easier to understand
and more entertaining to play.

Game concept
You are the managers of a well-established oil company with a diversified upstream and
downstream portfolio continuously seeking new upstream opportunities to replace the reserves
and the production. You and your teammates have to focus only on the upstream process/activity.

Upppland has decided to open its oil industry to international players recently, due to a lack of
funds for exploration of the countrys petroleum potential. Several companies entered the First
International Bid Round of Upppland which resulted in significant discoveries and subsequent
increase of production and oil export levels of the country. Your company owns a big exploration

license in the country. Thanks to the success of the International Bid Round, Upppland teamed up
with its neighbouring and surrounding countries and they formed the Oil Producer Upppian
Countries, thus creating the OPUC area. Thanks to your long-lasting successful international track
record and your presence in Upppland you are one of the few companies invited to operate in the
OPUC area. The upstream industry go back high in the past in this area as well, however, most
acreage could not be explored and developed according to the lack of funds in these closed
economies in recent decades. The primary objective of OPUC countries is to find operators who
commit themselves to efficient exploring, developing and producing the discovered hydrocarbon
fields. Therefore an exploration license will be granted. You are delegated exclusively to the
management of the OPUC Area portfolio and you do not have to deal with other assets of the
company. Nevertheless, you have access only to the free funds of your own portfolio to explore
and develop new opportunities here.
The game is compiled of two closely linked sections:
1. Exploration
2. Development, Production, Commercialization
You are given 600 million U$ (Uppp Dollar) of cash on hand to start the upstream process.

Timing & Decision-making


Contestants are going to play for 20 turns. 1 turn in the game means 24 hours in the real world, so
in every 24 hours there is going to be a turn change when the decision is processed and the results
are made.
Any member of the team can decide what they wish to do in each turn. Be careful, if the same
decision is made at the same time among the members, the earliest decision will be the valid one.
(GMT 16:00 Processing a turn lasts for an hour and you cannot enter the game during that time.
You are advised to return a bit later. Financial accounting and the effects of decision-making are
only shown when a turn change occurs.)

Financing
You begin the game with a budget of 600 million U$ for upstream operations. You have a revolving
credit of 500 million U$ total at a 10% interest rate. You can use this credit facility to finance 60%
of your investments at field development phase only. If you exceed the 60% limit on any of your
investments, the penalty interest rate will be 30%.

UPSTREAM

Playing the game

In each turn you will be offered the chance to perform exploration activites, followed by
development activities in the OPUC Area. You will have to start unveiling the geological potential
and characteristics using conventional tools of exploration. Naturally, if you judge some actions
(ex. a development activity) as not needed, you do execute. If later an action is judged to be
needed, then this can still be performed. In case a bad interpretation version is adopted, a new
interpretation should be made with sacrifice of a next day.

At the end of the Exploration phase your team is supposed to delineate a field by giving the crucial
input parameters (like recoverable reserves; porosity; N/G; petroleum type etc.) for development
and economic planning. These input parameters will be loaded into the Field Development phase.
With the help of this information you will have to evaluate the fields if you have sufficient amount
of funds and of course the opportunity is prospective enough. Your funds are scarce so do not
waste them on low return projects. If the IRR of a project is just a few percents, it might be better
to wait for more suitable opportunities. If judged rentable, your task will be to work out and fulfil a
field development program on the field.
The phases of the game are represented by pictos at the right side of the screen. Each icon
represents an individual part of the upstream processes.

The game runs by the following schedule.


1st year:
2D Seismic data acquisition (obligatory step) and Old
Wells' data acquisition (optional)
2nd year:
Prospect mapping (obligatory) and Drilling of a well,
3D seismic acquisition also (by the team's own decision)
3rd year:
New wells' data analysis (in case there was drilling in
the 2nd year.) and Starting field development (by the teams
own decision)
6th year:
Production (in case of adequate field development)

The important issue is that one step requires a full turn; i.e. In
the 2nd turn Prospect Mapping and Drilling of a Well will be
also available within a turn. You will see drilling data after one
year only.
The purchased and performed analyses are available at any
time later by clicking on the appropriate icon found at the right
side of the screen.

2D seismic data acquisition and Old Wells' data acquisition


Both 2D Seismic acquisition and purchasing an Old Well's data are available within a turn. You get
old well's data immediately.

Prospect mapping
In the prospect mapping menu, a bottom of a regional seal layer interpreted and mapped in depth
(m, tvdss).
The structural form of this regional seal could be a good location to be an oil charged reservoir in
various type of rock.

3D seismic acquisition
3D seismic acquisitions will increase the possible produced hydrocarbon amount at the lifetime of
reservoir. You can run 3D seismic acquisitions after a successfully appraisal but the possible
produced hydrocarbon amount of discovered (!) reservoir wont be increasing.

Drilling of a well
The drilling point can be chosen anywhere within the indicated area on the base of the analyses.

By selecting a point, data will appear about drilling depth and cost and you can also start drilling
phase here.
Drilling takes one year, after that the well log will be opened up as a result of the drilling.
In the same turn, If You made more than 1 exploration well inside the same structure reservoir, the
first exploration well will be drilled, the additional wells others have to stopped. If You drill further
wells in the same structure, you will lose your money and never get it back. Choose drilling
positions wisely and carefully.
Starting field development on the given well is possible in case of discovery.
If the team needs more accurate information for the calculation of oil in place, appraisal drilling
can be performed which provides significant input information for the consideration of field
development.
Appraisal available one year later after starting drilling. According to your choice you may consider
or skip Appraisal phase. Please note that most Exploration and Discovery is followed by an
Appraisal phase, during which additional information is gained. In this game you will only have
information about potential Oil-Water contacts, if any and the nature of the Aquifer. All other
parameters will remain identical to the ones in the Exploration well (except for several wells on the
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same potential closures). Please consider also, that Appraisal has a cost measurable to at least an
Exploration well. If you skip the Appraisal phase, you will be left with your refined OOIP
calculations that may differ from the real ones. If you elect to go through Appraisal phase, you will
have the opportunity to re-iterate the OOIP calculation and in a lucky case to arrive at a value close
to reality.
Appraisal drilling takes within a year, it is the team's own decision to start it.

FIELD DEVELOPMENT
When you successfully drill a well, you will be navigated to another screen where the map of the
license area will appear. By selecting a point, a list of input data will appear and you can also start
the field development phase.

Here you can also find 5 buttons that navigate to 5 panels.

Field Development panel contains facilities that can be constructed. For detailed information about
building, please see section Field development, facilities and costs.

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Before the beginning of construction the capacities of the necessary facilities can be set. Total
investment can be checked by clicking on
Investment Calculation
.

By clicking the Development field, development starts. If the team decides to request credit, it is
possible but note that the amount of credit cannot exceed 60% of all investment.
Please note that the oil processing train starts operating in the 3rd year of investment, production
is possible only after construction.

Further investment and increasing capacities can be performed later on the production field.
Development can be started only once in a year thus new investment can be launched after
development is completed.

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Field details panel shows the wells and facilities in operation and under construction and the
fields production performance.

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Financial data
panel indicates the main financial results relating to the given license area.

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Repaying credit
- In this panel your team can repay from the all existing amounts of credit.
Credit repayment can occur any time when the team wishes but interest of the credit is subtracted
immediately in the same round the credit is requested.

Abandon field
button shall be used if the player wants to stop the operation of a field.

You can leave the field by clicking on the ABANDON icon. Note that if you leave a field, it cannot be
developed later.

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Financial data of all upstream activity

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Selling the produced hydrocarbons


Crude oil
The oil quantity that leaves the license area is sold on the average international market price at the
end of the year. Note that there can be several bottlenecks of oil sales. (See the facilities section
for details.)
Natural gas
The associated natural gas is used for power generation or transferred to the government for free,
according to the license agreements in force in the OPUC area. (This is done automatically; the
teams do not have to deal with gas at all.)

Fiscal regime
If the teams want to plan their revenues precisely, they have to model the fiscal regime of the
license agreements as well. The country has its own tax regime which means 70% tax is levied.

Inputs & miscellaneous rules


The following data will be provided for each field.

Fielddata

Depth

[ft]

API

reservoir depth
API gravity

Rsi

[scf/bbl
Gas-Oil Ratio
]

Area

[acre]

Area of the field

Average thickness

[ft]

Average thickness of the reservoir

Porosity

[%]

Porosity of the reservoir rock

Heff/H

1/1

The ratio of effective and average thickness

Initial water saturation [%]

Initial water saturation in the reservoir

Permeability

[md]

Permeability of the reservoir rock

Distance
road

[miles]

In case a CPU (Central Production Unit) is built, its distance


from the closest main road

from main

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Distance from main


[miles]
train line

In case a CPU is built, its distance from the closest main rail
line

Distance
pipeline

In case a CPU is built, its distance from the closest main


hydrocarbon route.

from main

[miles]

Furthermore, information for the country in which the field is located will also be provided. These
data are constant throughout the game. These are the following:

Countrydata

Average
temperature

[F]

average atmospheric temperature

Geothermal
gradient

[F/1000
ft]

average geothermal gradient

OPEX & CAPEX


parameter
Government take

OPEX and CAPEX levels in the country you operate


The % of the generated oil revenue withdrawn by the
government

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There are some technical parameters which are constant regardless of the country or field. These
are:

Constants

Atmospheric
pressure
Methane
density
Wellbore
radius

14.7 psia
0.037463 pound/cubic ft

0.29 ft

the diameter of the well sections that cross the


reservoir

Oil price varies throughout the game. In the first period the price is 100 U$ (Uppp Dollar)/bbl

Evaluation of fields production curve


Before purchasing a development concession you will need to evaluate it. To do this, you have to
calculate the oil in place, the recoverable reserves and finally the production profile while also
considering the necessary investment, operating costs and taxes. The recoverable reserve size (i.e.
the recovery ratio) and the production profile are dependent on your field development scheme.
(Please see next section for detailed information on field development.) Note that the fields are
developed with pressure maintenance technology and ESPs (electronic submersible pumps) are
used at each production wells.
With the above specified data set and by using the Vasquez and Beggs formula (1980), you can
calculate the bubble point pressure, the oil formation volume factor and the original reserve for
undersaturated reservoir.
Following that original oil in place (OOIP) can be calculated.
During the recoverable reserve calculation use the Beggs and Robinson formula (1975) for the oil
viscosity calculation.
For water viscosity calculation use the McCain formula (1991). Water is assumed to be fresh water
without any salt content.

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For estimation of the recovery factor with pressure maintenance technology use the correlation
issued in API Bulletin D14 (1967).
The production is separated into two phases, waterless production and production with water. The
total liquid (water + oil) production level of a field with a given well network is constant in the
entire life of a field (without taking into consideration the bottlenecks of the surface infrastructure)
but watercut of the production changes in time. For the calculation of the production profile you
may use the following formulas:

For
waterless production portion
(from sensitivity calculation made by numerical simulation)
Wlp= waterless (till 1% of water contain) production portion of the total production
Wlp=0.6047-0.035*log(o/w)+0.02861*log(Wd)-0.0342*log(h)+0.06*(heff/h)-0.0067*log(k)
where;
(Wd) Well distance interval = 2000 < distance between the injectors and producers < 10000 [ft]
Reservoir total thickness interval (h) = 40 < thickness < 300 [ft]
Permeability interval = 1 < k < 1000 [mD]
Over (or below) the limits the maximal (minimal) limit value has to be used

Distance between injectors and producers = 2*(A/(n+m)/3.14)^0.5


where:
A: field area [sq ft]
n: number of producers
m: number of injectors

ROOIP in the waterless production phase =ROOIP*Wlp* Sp, where

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Sp= Scheme parameter, a correction factor depending on the injection well pattern:
At five point system (producer -injector ratio = 1) Sp=1
At seven or four point system (producer -injector ratio = 2) Sp=0.9
At nine point system (producer -injector ratio = 3) Sp=0.8
Sp can be calculated directly from the final producer-injector rate for a middle point.

When the produced oil amount in the waterless production phase exceeds ROOIP*Wlp* Sp, the
waterless phase alters to
production with water phase
.
In production with water phase
For Field level Water Oil Ratio prediction use Timmermann (1971) formula, where;
Np= cumulative oil production [bbl], its domain: ROOIPWlp < Np < ROOIP
a, b = reservoir specific constants, can be determined from the first and last point of the curve
1st point (starting of the water production) WC=1%, Np=ROOIPWlp
2nd point (end of potential production) WC=99%, Np= ROOIP
For well level estimations you may use the following equations
Average producer productivity equation:

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where:
q
f= qo+qw [bbl/d]
r
= drainage radius [ft]
e
r
= wellbore radius [ft]
w

r
= (A/n/3.14)^0.5
e
A: field area [sq ft]
n: number of producers

Estimation
of the average injector final productivity:

where
i

[bbl/d]
w
K
=
average water permeability (assumed to be equal to k)
w
r
=
middle distances between the injectors and producers
ei
r
=
(A/(n+m)/3.14)^0.5
ei

where:

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A: field area [sq ft]


n: number of producers
m: number of injectors

As the game itself, the model for the estimation of the production of a field should also be built
using 1 year long periods.

Field Development, facilities and costs


To bring up the precious oil from the depths of the earth, you will need to develop the field. For
this purpose, producer and injector wells are needed as well as a well-designed surface facility.
Your task also includes the design of the transportation capability.
For a well-functioning field development program you need to focus on the produced amount, the
capacities of the equipment (bottleneck effect) and the timing of your development. Both the
production and injection capacity, as well as the surface processing or transportation capacity can
be the bottleneck in the system. Also, according to the rules of OPUC, the daily oil production of a
field cannot be greater than one third of its storage capacity. It is important to optimise the
number of wells and capacity of the surface infrastructure to make the operation of the field as
efficient as possible.
Before starting the field development you have to take into account that

the granted concession rights are valid for 20 years or turns.

all fields need to be developed with pressure maintenance technology.

for security reasons the maximal drawdown pressure at water injector wells is 1500 psia.

minimal bottom hole pressure at producer wells is 50% of reservoir pressure. Pressure
build-up follows hydrostatic tendency. g is 10 m/s2.

In the
Development
panel you will find the facilities that can be constructed (producer well,
injector well, oil processing train, storage tanker, road, rail and pipeline transportation units). By
clicking on
Investment Calculation
button, you can see the CAPEX of the units to be construced.
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You can select the number of units (in case of wells) or the capacity (in case of other facilities).
When you have set the desired number or capacity of all the facilities, you may select
Development. Keep in mind that there are certain limitations for the construction of production
facilities.
Note that in one turn you are able to access the build panel only once. That means that you have
one opportunity in each turn to decide what facilities are to be constructed.
Limitsforplayers'inputs

Maximum unit/ Step/interva Maximum pieces/


capacity built in l on the capacity built per
period
slider
concession
Production
wells

wells+Injector piece

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N/A

Oil processing train

bbl/d 50,000

1,000

4 trains*

Storage tanker

bbl

1,000

6 tanks*

Export route - road

bbl/d 50,000

1,000

50,000

Export route - rail

bbl/d 100,000

1,000

100,000

Export route - pipeline

bbl/d 500,000

1,000

500,000

150,000

* Note: The number of units is maximised not the capacity.


It can happen that the revenues of a field will not cover the OPEX and the taxes payable for the
given field. In this case you can abandon the field at zero charge in each period. However, you
cannot abandon a field if there are ongoing construction works within its perimeters.
Below you will find a summary of the different equipment and facilities that could be developed
and the cost-functions of the CAPEX and OPEX related to them.
CAPEX is charged when the construction order is given (except for oil processing train). When the
processing train is being constructed, the first part of the CAPEX is charged on the spot while the
remaining parts are charged at the beginning of the following turns. Facilities start the operation in
the turn following the construction except for the processing train that is in operation from the 3rd
year following the start of construction.
Production wells are the elemental tools of oil mining. CAPEX of one unit depends on the depth to
be drilled and geological factors. The construction costs contain the installation of ESP (Electrical
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Submersible Pump), pipelines connecting to the CPU (Central Processing Station) and other well
site infrastructure. As pressure maintenance technology is used for field development, injector
wells must be also drilled. Injector wells are fed by the water of nearby rivers and lakes. Significant
part of operational costs of wells connected to the amount of liquid produced, however, the
regular maintenance of wells requires notable financials as well. Capital and operational costs for
producer and injector wells can be calculated as follows:
Productionwell

CAPEX - fix

Production or injector wells drilled in period [#] * U$ 5 mln/well

CAPEX - variable Production or injector wells drilled in period [#] * U$ 0.2 mln/1000 ft *
Reservoir depth [1000feet]^1.5
OPEX - fix

Production or injector wells in operation [#] * U$ 0.25 mln/well/year

OPEX - variable

Produced or injected liquid amount [MMbbl/year]^0.8 * U$ 0.3 mln/MMbbl

Oil processing train or CPU is the heart of each oil field. Their main task is to transform the
produced raw oil into a transportable and marketable quality product. The construction of an oil
processing train takes 3 years. CAPEX emerges as follows: in the first year 30%, in the second year
50%, in the third year 20% of total cost. As evident as it is the construction cost depends on the
capacity of the unit with significant initial investment. The OPEX of the unit is also related to the
maximal capacity. One processing train can be built in each period (until reaching 4 trains) of which
the minimal capacity is 1,000 bbl/day while the maximal capacity is 50,000 bbl/day.
Oilprocessing
train

CAPEX - fix
CAPEX - variable

U$ 20 mln
Processing train capacity built in period [Mbbl/d]^0.9 * U$ 8
mln/(Mbbl/d)

OPEX - fix

Processing trains in operation [#] * U$ 0.5 mln/train/year

OPEX - variable

Processing train capacity [MMbbl/year] ^0.8 * U$ 1.8 mln/MMbbl

Storage tankers are required for temporary oil storage, as in some cases the transportation is not
possible immediately. CAPEX of these facilities are proportional to the size and capacity of the unit.
However the operational costs are unit based. One tanker can be built in each period (until

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reaching 6 tanker units) of which the minimal capacity is 1,000 bbl/day while the maximal capacity
is 150,000 bbl/day.

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Storagetanker

CAPEX - fix

U$ 1 mln

CAPEX - variable

Storage capacity constructed in period [Mbbl]^0.9 * U$ 0.5


mln/Mbbl

OPEX - fix

Storage tankers in operation [#] * U$ 0.1 mln/#/year

OPEX - variable

N/A

Players may choose between three different means of transportation. One transportation system
can be built in each period from all types of transportation infrastructures.
For road transportation a road connecting to the main system must be built together with truck
filling heads. Road CAPEX must be paid in the first year road is constructed and only have to be
paid. Whereas filling station CAPEX must be paid each time additional road transport capacity is
constructed. OPEX of road has fix part due after a road is constructed and a variable part
depending on the length of the road. Fix filling station OPEX must be paid based on the number of
filling stations in operation. The external
transportation
cost in case of road transport is
7 U$/bbl
(in excess of the CAPEX and OPEX of the facilities). One road transportation unit can be built in
each period (until reaching the total road transportation capacity of 50,000 bbl/d) of which the
minimal capacity is 1,000 bbl/day while the maximal capacity is 50,000 bbl/day.
Road

CAPEX fix

U$ 1 mln

CAPEX - variable Road length [mile] * U$ 0.5 mln/mile


OPEX fix

U$ 0.1 mln/year

OPEX - variable

Road length [mile] * U$ 0.1


mln/mile/year

Truckfillingstation

CAPEX fix

U$ 1 mln

CAPEX - variable

Truck filling capacity built in period [Mbbl/d]^0.8 * U$ 0.5 mln/(Mbbl/d)

OPEX fix

Truck filling stations in operation [#] * U$ 1 mln/#/year

OPEX - variable

N/A

For transportation with train to a pipeline a filling station at the nearest rail line must be
constructed. Pipeline CAPEX has a notable large fix part and a variable part dependent of the
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length and the capacity of the pipe. CAPEX of filling station follows the same logic, self-evidently
without taking into consideration the distance. Note that each time a new pipeline is constructed a
new filling station must also be built. Fix OPEX of both units is based on the number of facilities
built while variable OPEX of the pipeline depends on its capacity. The external
retransportation
cost in case of rail transport is
5 U$/bbl
(in excess of the CAPEX and OPEX of the facilities). One rail
transportation unit can be built in each period (until reaching the total rail transportation capacity
of 100,000 bbl/d) of which the minimal capacity is 1,000 bbl/day while the maximal capacity is
100,000 bbl/day.
Pipelinetorailfilling
station

CAPEX - fix
CAPEX variable
OPEX fix
OPEX - variable

U$ 10 mln
Pipeline capacity built in period [Mbbl/d]^0.5 * U$ 0.16 mln/(Mbbl/d) *
Pipeline length [mile] * U$ 1 mln/mile
Pipelines to filling stations in operation [#] * U$ 0.1 mln/#/year
Pipeline capacity in operation [MMbbl/year] * Pipeline length [mile] * U$
0.002 mln/MMbbl

Railfilling
station

CAPEX fix

U$ 5 mln

CAPEX - variable

Rail filling capacity built in period [Mbbl/d]^0.8 * U$ 2


mln/(Mbbl/d)

OPEX fix

Rail filling stations in operation [#] * U$ 2 mln/#/year

The third mean of transporting the crude oil to the international market is using a pipeline. In this
case a pipeline to the nearest international transportation pipeline and a connection point must
also be constructed. If pipeline capacity has to be increased, a new pipeline and a separate
connection point has to be built. The CAPEX and OPEX functions of these facilities are quite similar
to that of the railway units, however they have significantly higher initial costs. Meanwhile the
external transportation cost in case of pipeline transport is
3 U$/bbl (in excess of the CAPEX and
OPEX of the facilities). One pipeline transportation unit can be built in each period (until reaching
the total road transportation capacity of 500,000 bbl/d) of which the minimal capacity is 1,000
bbl/day while the maximal capacity is 500,000 bbl/day.

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Pipeline

CAPEX - fix

U$ 10 mln]

CAPEX -

Pipeline capacity built in period [Mbbl/d]^0.5 * U$ 0.16 mln/(Mbbl/d) * Pipeline

variable

length [mile] * U$ 1 mln/mile

OPEX - fix

Pipelines in operation [#] * U$ 0.1 mln/#/year

OPEX -

Pipeline capacity in operation [MMbbl/year] * Pipeline length [mile] * U$ 0.002

variable

mln/MMbbl

Connection

point

CAPEX - fix

U$ 20 mln

CAPEX - variable

Pipeline capacity [Mbbl/d] * U$ 3 mln/(Mbbl/d)

OPEX - fix
OPEX - variable

Connection points in operation [#] * U$ 0.5


mln/#/year
N/A

OPEX is incurred from the year the facility is in operation. OPEX is charged at the end of each turn.
Parts of OPEX that not depend on the actual throughput of a unit are paid for all the commissioned
infrastructure irrespective of their utilisation.
It is important to note that:
All costs are multiplied by a country factor.
Construction of facilities takes 1 year (except for oil processing trains). The operation begins in the
year following the construction year.
Facilities operate 300 days a year, taking into consideration the time spent on repair, adjustment
and maintenance.
In case more than one means of transportation is available, oil is transported via the cheapest way.
If the capacity is not enough the rest of the production is transported via other existing means.

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Ranking &

Final Scoring

Your performance and the final scoring is based on the cash generated by Uppplandian portfolio to
your company. We will also take into consideration and evaluate the effects of your decisions
made in the final turn (Round #20). By running a 21st turn automatically without the opportunity
to make any decisions right at the end of the game.
Thereafter, teams are ranked by their overall amount of cash earned by the end of the game. Note
that we subtract the remaining unpaid credit from the final result. After then ranking the teams is
based on the score of their overall performance. At the end of the online competition 40 teams
with best overall score will get the chance to take part in the Semifinal where the teams will have
to solve a quiz as well. On the whole, evaluation will be based on the scores of the online rounds
and the quiz for getting into the live final.

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