Market demands drive consolidation

The world of marine seismic is in the throes of major change. The process began in 2000 with the formation of WesternGeco, the joint venture of Schlumberger Geco-Prakla and Baker-Hughes Western Geophysical. This brought approximately 60% of the fleet together under one marketing umbrella and began the process of fleet concentration and rationalization.

The world of marine seismic is in the throes of major change. The process began in 2000 with the formation of WesternGeco, the joint venture of Schlumberger Geco-Prakla and Baker-Hughes Western Geophysical. This brought approximately 60% of the fleet together under one marketing umbrella and began the process of fleet concentration and rationalization. The invest-ment community has suggested fleet concen-tration and rationalization was necessary for at least the past four years. Strategic changes in the commodity approach to 3D seismic have also been suggested.

In 2001 Petroleum Geo-Services and Veritas DGC agreed to merge, consolidating approximately 25% of the fleet under one company. While this merger is still in the final approval stage, it is expected to be cleared without any major challenges.

These changes mean that the oil industry can expect to see even more seismic company concentration and equipment shakeouts through at least 2002 and perhaps beyond. Niche players may survive, but the remainder of the fleet will either consolidate or be driven out of business. This is seen as a necessary adjustment to compete in a changing business climate.

With exploration activity levels dropping to reflect trimmer exploration budgets for 2002, the pressure will be on vessel operators to mothball or retire many ships. The sorting process will take some time, and the ultimate shape and capability of the fleet are still unclear. Among other contributing factors, developing technologies and an expanding need for deepwater remote sensing will play a role.

Marketshare

The two largest players are now locked in a battle for the volatile exploration business. As this battle for market share evolves, it will change the number of vessels and the character of the fleet over the next year or two.

The fleet of the future will reflect the diverse needs of the operators who are its customers. To take advantage of a streamlined focused group of vessels means the operators will pay fully for the services they require. At the end of the day, even a consolidated geophysical industry must make a profit in order to attract investment.

New capabilities

The geophysical market has shifted dramatically from the 2D world of 10 years ago or even the 3D world of just five years ago. New technologies that have evolved the market include:

  • Four-component (4C) bottom cable
  • Vertical sensor buoy arrays
  • Downhole sensors in combination with surface vessel sources.

These innovations require different vessels and sensor equipment, but offer increased reservoir imaging capability throughout the lifecycle of offshore fields. Oil companies are experimenting with these new tools now. Production geophysics will soon find its proper place in the production life of new fields where the advantages will be most useful.

Eventually production geophysics will be applied to older, more well-developed properties, but only after the cost and sweep efficiencies improve. This is good news for the marine seismic industry. Production geophysics will require more frequent surveys and the ability to compare one survey against another. This approach to reservoir tracking lends itself to long-term planning and long-term contractual relationships as opposed to single-project pricing, which is the current norm.

Changes

The fleet will be changed and shaped by the expanding needs of the oil companies for reservoir modeling, tracking, and production forecasting. Initially, these services will come at a higher price, but as companies properly apply and leverage the new seismic technologies, the costs of the services will be offset by higher offshore field productivity (higher volumes over a shorter time) and tighter control over in-place reserves.

Marine seismic is the most efficient data collection system ever developed for the sea and delivers value years after the initial data gathering. The fleet will continue to change to meet the challenges of tying deepwater field attributes to hydrocarbon flows and of locating the remaining available hydrocarbon volumes in older fields.

Regional surveys will still be done with 2D vessels. Exploration targets will receive 3D coverage. Producing fields will have 4C and downhole monitoring equipment installed to track the extraction of in-place reserves. Seismic data is still the industry's best long-term value for money spent. ;

Editor's Note: An asterisk (*) next to the company name indicates the company did not update the data displayed in the spreadsheet.

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