Download - Game Rules 2014
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UPPP2014
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 country’s 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.
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Timing
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.
(GMT 12:00 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%.
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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. The important issue is that one step requires a full turn; i.e. „Geological mapping” will take
a full day; likewise, „Seismic acquisition”, „Prospect generation”, „Drilling of a well” etc. will also take a
day each. Purchasing of old wells' data is optional and is available after the seismic acquisition only. If
a bad interpretation version is adopted, a new interpretation should be made with sacrifice of a next
day.
The purchased and performed analyses are available at any time by clicking on the SHOW MAP icon
found at the bottom right side of the screen.
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You can change layers by rolling down menu found on the top left side of the screen.
At the end of the first 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 second 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 shown by the picture below. Each icon represents an individual part of
the upstream processes.
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The game runs by the following schedule.
1st year: Geological analysis (obligatory step)
2nd year: Seismic data acquisition (obligatory step)
3rd year: Prospect mapping (obligatory) and old wells' data acquisition (optional)
4th year: Drilling of a well and new wells' data analysis (by the team's own decision)
5th year: Starting field development (by the teams own decision)
8th year: Production (in case of adequate field development)
Drilling of a well
The drilling point can be chosen on the base of the analyses.
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You can see country specific information or select the drilling possibilities in the Locator . By selecting
an active 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.
Then you will be given the chance for well testing, which provides significant input information for the
consideration of field development.
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. Appraisal drilling takes one year, it is the team's own decision to start it.
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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.
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Development panel contains facilities that can be constructed. For detailed information about building,
please see section “Field development, facilities and costs”.
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.
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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.
Field details panel shows the wells and facilities in operation and under construction and the field’s
production performance.
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Financial data panel indicates the main financial results relating to the given license area.
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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Other icons and their functionalities
This icon navigates back to the locator panel.
Pushing this icon opens a panel with the actual and previous years' oil prices
Financial data of all upstream activity
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.
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Inputs & miscellaneous rules
The following data will be provided for each field.
Field data
Depth [ft] reservoir depth
API° 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 from main
road [miles]
In case a CPU (Central Production Unit) is built, its distance
from the closest main road
Distance from main train
line [miles]
In case a CPU is built, its distance from the closest main rail
line
Distance from main
pipeline [miles]
In case a CPU is built, its distance from the closest main
hydrocarbon route.
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:
Country data
Average
temperature [F°] average atmospheric temperature
Geothermal
gradient
[F°/1000
ft] average geothermal gradient
OPEX & CAPEX
parameter OPEX and CAPEX levels in the country you operate
Government take 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 14.7 psia
Methane density 0.037463 pound / cubic ft
Wellbore radius 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.
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
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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(µo/µw)+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
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.
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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:
where:
qf = qo+qw [bbl/d]
re = drainage radius [ft]
rw = wellbore radius [ft]
re = (A/n/3.14)^0.5
A: field area [sq ft]
n: number of producers
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Estimation of the average injector final productivity:
where
iw [bbl/d]
Kw= average water permeability (assumed to be equal to k)
rei = middle distances between the injectors and producers
rei = (A/(n+m)/3.14)^0.5
where:
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.
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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.
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.
Limits for players' inputs
Maximum unit/
capacity built in
period
Step/interval
on the slider
Maximum pieces/
capacity built per
concession
Production wells+Injector wells piece 10 1 N/A
Oil processing train bbl/d 50,000 1,000 4 trains*
Storage tanker bbl 150,000 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
* 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
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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
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:
Production
well
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.
Oil processing train
CAPEX - fix U$ 20 mln
CAPEX - variable 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 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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Storage tanker
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
Truck filling station
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 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
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U$/bbl (in excess of the CAPEX and OPEX of the facilities). One rail transportation unit can be built in
each period (until reaching the total rail transportation capacity of 100,000 bbl/d) of which the minimal
capacity is 1,000 bbl/day while the maximal capacity is 100,000 bbl/day.
Pipeline to rail filling
station
CAPEX - fix U$ 10 mln
CAPEX – variable Pipeline capacity built in period [Mbbl/d]^0.5 * U$ 0.16 mln/(Mbbl/d) *
Pipeline length [mile] * U$ 1 mln/mile
OPEX – fix Pipelines to filling stations in operation [#] * U$ 0.1 mln/#/year
OPEX - variable Pipeline capacity in operation [MMbbl/year] * Pipeline length [mile] * U$
0.002 mln/MMbbl
Rail filling 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$/bbl (in excess of the CAPEX and OPEX of
the facilities). One pipeline transportation unit can be built in each period (until reaching the total road
transportation capacity of 500,000 bbl/d) of which the minimal capacity is 1,000 bbl/day while the
maximal capacity is 500,000 bbl/day.
Pipeline
CAPEX - fix U$ 10 mln]
CAPEX -
variable
Pipeline capacity built in period [Mbbl/d]^0.5 * U$ 0.16 mln/(Mbbl/d) * Pipeline length
[mile] * U$ 1 mln/mile
OPEX - fix Pipelines in operation [#] * U$ 0.1 mln/#/year
OPEX -
variable
Pipeline capacity in operation [MMbbl/year] * Pipeline length [mile] * U$ 0.002
mln/MMbbl
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Connection point
CAPEX - fix U$ 20 mln
CAPEX - variable Pipeline capacity [Mbbl/d] * U$ 3 mln/(Mbbl/d)
OPEX - fix Connection points in operation [#] * U$ 0.5 mln/#/year
OPEX - variable 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.
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 10 teams with best overall
score will get the chance to take part in the Semifinal.