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Issue One January 2001
P L A N E T
A Field-Based “Oil Business
Game” for Honours
Geology Students
Gordon Walkden
Introduction
The inclusion of a challenging investigative theme provides a sound
means of enhancing the effectiveness of field training, giving it drive
and focus. When one of the prime aims is to demonstrate how
accurate geological knowledge generates commercial added value
and competitive advantage, then the exercise can become infectious
and compulsive for all concerned. The Aberdeen University field
based Oil Business Game was devised for senior Honours students
who are in the last few months of their study in a department with a
strong petroleum focus. It is a competitive team exercise, integrated
with an optional residential field course covering the superb Upper
Palaeozoic to Mesozoic geology of the SE Scottish/ NE English coast.
The game takes a week to unfold.
The oil game anchors the field course in applied realism, but adds
excitement and fun - something special and unusual for students on
the final straight of a Scottish 4 year undergraduate course! It is not
an exercise in sophisticated petroleum geology, but an exercise in the
data acquisition, management and decision making aspects of the
processes involved. Student response is very positive and some,
looking back on it, see it as a valuable introduction to the world of
work.
This article describes the game, not the underlying fieldwork that
underpins it. Despite the oil focus, the general principles and methods
of the game, including the associated computer software, are adaptable.
Direct translation to other applied themes, such as aggregate extraction
and water resources, would be straightforward, and the game can be
simplified. A “Research Company” version is in sketch form, and
doubtless other generic applications will occur to readers. All feedback
is welcome. Why not join us on a course, and see if the package is
transferable for your particular purposes?!
The exercise
The exercise simulates the activities of oil exploration and production
companies in creating teams, assessing plays, seeking investment,
evaluating oil prospects, conducting impact assessments, bidding for
blocks, and producing oil or gas that requires to be transported from
site. Integrated with the geology field course, it reinforces the
geological objectives, underscores the value of accurate field
observation, and illustrates the ways in which geological science can
be used in support of industry. In particular, it brings home to students
the extent to which diverse subdisciplines, such as palaeoecology,
trace fossils, diagenesis, sedimentology and structural geology
contribute to the holistic understanding necessary for accurate
petroleum modelling.
Individuals play both in their own right and as members of a team
(company). Personal “investment cash” is earned, players placing half
in their own company and half in a “portfolio” of choice in other
companies. Investment is controlled through a simulated stock market
(a purpose designed interactive spreadsheet, see figure 1) responsive
to actual investor confidence and company performance. The initial
share value of a company is set by the team at floatation but this
soon changes in successive rounds of bidding as market forces operate.
Once formed, each company team works as a group in data gathering
and interpretation exercises, and their relative effectiveness can quickly
become apparent. A final share trading round is delayed to show the
effects of this, when values can further change as investors move into
the better looking companies.
Investor capital is used by the companies to assess, bid for and develop
hydrocarbon prospects. These are potential fields contained in “blocks”
put up for auction by the “regulators”. Blocks are precisely defined,
based on real geological maps, involving real localities, rocks and
structural features that are visited and examined in detail at various
stages in the field course. Students are asked to imagine that they are
walking around inside potential reservoirs, emulating the virtual reality
caves used by some major companies, but some blocks are never
seen first hand. A certain amount of “tweaking” is obviously necessary
in block specifications, to define burial depth and overburden, and
some structural enhancement is sometimes necessary. A second
spreadsheet is used by companies to simplify and speed up reserve
calculations, recovery figures, development and production costs,
environmental premiums, taxation and ultimate likely profit or loss.
Specific input data are required that force competitors to consider
real issues and make judgements on these, including human and
environmental impacts.
The reservoirs, development costs and ultimate recovery figures are,
of course, imaginary, but the outturns used by the regulators are
based upon the same assumptions as used by the teams. Actual daily
oil and gas prices are used in calculations. The winning team (company)
and winning individual (shareholder) will be those who have made
the most of their investments. The results are calculated through the
spreadsheet and are made known on the last night of the field course.
The main stages of the exercise
The Business game operates during the evenings, whilst the field course
occupies the days. What the game generates, though, is an absolute
need to examine certain localities and acquire specific data. The
game and the fieldwork mutually reinforce one another.
Day 1: Outline of Business Game.
The exercise is outlined in its separate stages, and the work and
materials required in support, are explained. Laptops with information
and software are distributed.
Day 2: Skills statements; allocation of personal
investment capital, team building.
Individuals publish an A4 poster of relevant personal and scientific
attributes, and a notional cash reward of £100m is given to each.
Statements are reviewed by all; the fundamentals of team building
are reviewed and a procedure to create company teams is agreed
and implemented.
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