Last month’s Annual Meeting of the European Association of Geoscientists and Engineers (EAGE) in London was by far the largest in the EAGE’s history. Over 8000 delegates showed up at the conference and exhibition at the Excel Centre in London to create plenty of buzz, sales pitches and rumor. Andrew McBarnet offers this perspective.
Some of the big increase in attendance at the EAGE’s event, nearly 2000 more than the previous record, can simply be put down to London being the venue, with its universal appeal and unique attractions. An opening speech by a royal – HH Prince Andrew, Duke of York – probably didn’t do any harm. Also, it’s hard to beat company evening events hosted in the Tower of London and the 19th Century Cutty Sark tea clipper anchored in the Thames, not to mention the official conference night for all delegates in the Natural History Museum, where the main band played to a packed audience massed around a very large dinosaur skeleton enhanced by state-of-the-art techno lighting.
The numbers also reflect the growing membership and international expansion of EAGE, which may, one day, have to drop ”European” from its title and replace it with “International” or “Global.” Half the membership, which has climbed to 17,000 from less than half that figure just a few years ago, comes from outside Europe. The association now has offices to serve its members in Moscow, Dubai, and Kuala Lumpur, is building a presence in South America, and is even staging regular events in North America, natural habitat of the US-based Society of Exploration Geophysicists (SEG).
The focus of the EAGE’s Annual Meeting is always predominantly oil and gas E&P, so an obvious conclusion would also be that business in the geoscience field serving the oil industry is thriving. Not just geoscience, because the event has, for almost a decade, incorporated the SPE’s EUROPEC conference and claims to be the largest multidisciplinary event combining geoscience and engineering.
The fun at these meetings, where everyone is pitching something, is to determine how much of the talk is based on reality and to come to some conclusion on where this sector of the oil industry is heading. On the evidence present in London, this is probably as good as it’s going to get.
There are a number of challenges on the horizon for the marine seismic business, not all of which have been fully acknowledged. The most fundamental is whether the main marine seismic contractors, of which there are only five left standing, can escape rampant commoditization.
This is always a sensitive issue, because companies naturally want to differentiate themselves for commercial advantage. Otherwise, if all the offerings look much the same, selling marine 3D surveys boils down to price, and that invariably ends in a low-balling fest, leading to economic misery.
Traditionally, the two ways that contractors can make a case for being superior to their competitors is by their vessels’ quality and capacity and by the promised results from the technology being towed.
Taking vessels first, the global seismic fleet is pretty much up to date, following the modernization programs initiated by the leading players at the end of the last decade. There are differences between the companies in terms of vessel size, power, and class. For example, not many are fully rated for Arctic operations, and not all have the capability to extend the weather window in northern Europe. CGG, which, since the acquisition of the Fugro fleet owns the largest number (22) of 3D vessels, does have a higher proportion of older stock, but is credited with spending $1 billion over the last three years in renovations and standardization.
For the oil company customer, the truth is that the vast majority of boats being offered for 3D seismic perform as advertised. In other words, the boat design is unlikely to be a deciding factor. Petroleum Geo-Services (PGS) might argue that its new Titan class is in a different league, which it is in terms of its enormous size and ability to tow up to 24-26 streamers. But many of the benefits, like being able to stay out of port for long periods with at-sea maintenance, exceptional crew comfort, etc., are about PGS making its operations cost-effective, i.e., not necessarily of direct interest to the client. The company has to be admired for the audacity of these monsters, the first of which, Ramform Titan, is now operational off the NW European continental shelf. It remains to be seen whether there is any marketable advantage. These vessels have to be costly to run, and many surveys do not require such a massive data harvester.
If vessels are not the key differentiator, can we say that acquisition and processing technology is the key? In the past few years it has certainly looked that way. PGS, in particular, stole a march on the field with its GeoStreamer, launched in 2007. This was the first acquisition system to offer a ”broadband” solution to improving subsurface imaging resolution in complex geological settings. The latest version, GeoStreamer GS, uses a time- and depth-distributed source technology (GeoSource) to avoid all source ghost effects on the emitted source signal spectrum. The complementary signals emitted by sub-sources in the array allow the ”source ghost” effects to be removed, so much richer low- and high-frequency signal information is recovered. The system uses dual-sensor, solid streamers towed very deep to recover all of the seismic wavefield reflected from geological targets in the earth.
For a while, PGS was on its own with this technology, and even now, attributes its strong financial in 1Q 2013, with increased earnings and improved EBIT, primarily to the traction gained in the market for GeoStreamer. However, all the talk and displays at the EAGE meeting in London demonstrated just how far the playing field has been leveled, so much so that potential oil company customers can be forgiven for thinking that broadband seismic has become a standard service offered by all the main providers of marine seismic surveys. There is a wide range of broadband solutions out there now. They are not all dependent on expensively researched and developed acquisition technology, but are accessible through streamer-towing strategies and special processing, and an element of special pleading.
Increasingly, oil companies have been making broadband a prerequisite for marine seismic surveys. Until recently, the narrative was that PGS (GeoStreamer), CGG (BroadSeis) and WesternGeco (ObliQ and more) differentiated themselves from the rest of the herd because they had developed full acquisition and processing techniques to deliver broadband, which Dolphin Geophysical, Polarcus, and the multiclient specialists such as TGS and Spectrum could not match. As is so often the case in this technologically driven industry, that has all changed very rapidly.
Companies like Dolphin and Polarcus have come up with the rather ingenious argument, expressed to anyone who cared to listen in London, that broadband is actually a misnomer. They say that enhancement of low frequencies is what oil company clients are really looking for, rather than increasing the recorded bandwidth at both the high and low end. They contend that GeoStreamer and BroadSeis introduce unnecessary complexities into acquisition configurations, and complications into data processing requirements. Anecdotal evidence from a recent workshop on broadband technology in Kuala Lumpur suggests that they be winning the argument. Broadband experts reportedly now concede that most of the bases for socalled broadband can be covered by the less-elaborate solutions advocated by Dolphin, Polarcus, and others.
Dolphin rather cheekily takes a shot at the big guns when it refers to its SHarp broadband combination of acquisition and processing as ”fleet ready, no new equipment required.” In common with the Polarcus RightBAND technique, SHarp is predicated on towing streamers deeply to record the low frequencies, plus some fancy processing to do deghosting, etc. Polarcus emphasizes an intelligent application of geophysical principles, involving each component of the seismic workflow. It customizes the source arrays for each project to generate the necessary broadband signals. Solid Sercel Sentinel streamers, deep-towed and recording in the quiet environment created as a result, enable the company to deliver data that it suggests have the lowest possible noise content across the entire frequency spectrum. Sercel claims its broadband results are as good or better than those achieved by the Big Three. For its data processing train, Polarcus uses the ION Geophysical subsidiary GXT, which, with WiBand offers an answer to the source and receiver notches in the frequency spectrum resulting from the free surface reflections (ghosts) that limit data resolution in the marine environment. Significantly, it is applicable to conventional ”flat” (cf. sloping) streamer data acquisition configurations, which make up the vast majority of legacy data and the majority of new data.
As a high-profile acquirer of data through its multi-client projects, TGS has introduced its Clari-Fi, three-step processing solution that allows broadband data to be generated from conventionally acquired seismic data. Clari-Fi Totus addresses the source and receiver ghosts, while Clari-Fi Amplio broadens the spectrum to a desired shape, up to the first ghost notch frequency. The company says the solution is flexible enough to be used on a variety of marine data types (2D, 3D, narrow, and wide azimuth), both new and legacy data, and on either pre-stack or post-stack data sets. Soon, there will be plenty of other companies providing broadbandenabling products. The clear implication is that marine seismic companies will be searching for some further technology advance that can distance themselves from their competitors. A year ago, at the EAGE Annual Meeting in Vienna, WesternGeco launched IsoMetrix as the ultimate seismic acquisition technology, able to record data measuring wavefield pressure and gradient vertically and cross-line. If it works, that would be impressive, was the word. Geophysicists were talking as if it would put everyone else out of business, particularly since Schlumberger has an aggressive patent protection department to prevent copying.
A year later, IsoMetrix has yet to prove commercially successful amid rumors of streamer problems. Some have mischievously connected the recent abrupt replacement of the company CEO with the technology’s muted appearance.
In London, CGG’s equipment manufacturing subsidiary, Sercel, fired what can only be described as a shot across WesternGeco’s bow when it announced MS Sentinel. Lo and behold, in addition to the high-quality pressure measurement provided by its hydrophone sensor, the system features two additional acceleration components, based on its Sentinel solid streamer technology. Sercel claims directional measurements for both cross-line and vertical wave fronts that deliver multisensor data sets for enhanced broadband imaging. Sercel stated it would be 2014 before the MS Sentinel will be available, but it appears as though WesternGeco won’t have this particular differentiator all to itself.
Doubtless, PGS and other contractors will be considering their response to the cross-line measurement possibility, which will clearly provide more information about the subsurface. This always assumes that acquisition bugs and processing issues of the much larger data sets can be sorted out.
The overall message is clear: no one is going to get a jump on the opposition for long. That being said, contractors begin to look very much like operators of ”boats for rent” with not much to differentiate them, i.e., the commodity scenario that they dread. With a buoyant market and negligible slack in the global vessel capacity to meet demand, marine contractors were able to leave London without too much to worry about. But a clutch of new high streamer-count vessels are due out in 2014−15. This could affect the supply-demand equation, unless there are some vessel retirements. Also companies can’t count on oil companies’ upstream spending continuing at its current rate. Don’t be surprised, therefore, if a survey price war breaks out in the not too distant future. OE