Merger, acquisitions and new launches keep EM market buoyant
Norway’s offshore geophysical sector is a lively place and for long a source of significant innovation, both in terms of techniques developed and applied, radical new vessels and associated systems, plus innovative processing and interpretation of data.Adding extra spice of course is the ongoing game of corporate chess by which we mean merger and acquisitions activity.
All of the foregoing has taken place over the past 12 months:
* EMGS has launched new EM technologies and collaborations.
* PGS has taken delivery of the first of its third generation survey vessels, immediately settin up a new record for towed streamer arrays.
* Wavefield Inseis and TGS Nopec announced a proposed merger in July 2007 that, at the time of writing, has still not been completed due to boardroom issues hampering progress.
Across two days consecutive in June 2008, EMGS (Electromagnetic Geoservices) announced two important developments for the company … one billed as the ‘world’s first fully integrated EM system’ and a collaboration with Blueback Reservoir to launch a new decision-support tool for exploration professionals called Bridge.
EMGS specialises in seabed logging, which is based on electro magnetic (EM) waves. Otherwise generally referred to as CSEM (controlled source electro-magnetic survey, this company worked intimately with Statoil to develop the technique, but became embroiled in a several years intellectual property wrangle that was essentially laid to rest in May 2006 when the University of Southampton withdrew its appeal against a 2005 decision by the UK Patent Office to award ownership of a UK patent and a number of foreign applications on sea bed logging to Statoil.
This in turn paved the way for the patent and applications to be transferred from Statoil, to EMGS’s already substantial portfolio which continues to grow, witness the news regarding the launch of Clearplay. Billed as the first every fully integrated EM system. EMGS describes it as “seamless, end-to-end EM services and products” fusion package aimed at oil & gas exploration.
The objective? To enable clients to find and develop ‘more hydrocarbons, more quickly, and at lower cost per barrel than traditional methods alone’.
As for Bridge, this is a software package designed to enable the easy integration of electromagnetic (EM) data with other geophysical and geological information such as 3D seismic, hopefully resulting in a clearer and more complete understanding of the subsurface.
Additionally, Bridge has also been developed as an EM plug-in for Petrel, a leading geological and geophysical integration platform developed by Blueback.
A measure of the confidence now shown in EM is that StatoilHydro has commissioned EMGS to carry out an extensive multi-client survey in the Barents Sea, ahead of Norway's 20th exploration licensing round. At more than 3000 km2, the survey represents a significant milestone for EMGS and may be extended.
The company was also commissioned to carry out a 2000sq km search for commercial hydrocarbon deposits in the Krishna-Godavari basin, ahead of India’s 7th New Exploration Licensing Policy round (NELP 7.)
Unlike traditional techniques that rely on seismic surveys to indicate potential reservoir structures, EM scanning technology searches for electrical properties (resistivity) that can indicate the location of hydrocarbons directly. Scanning with EM techniques offers the additional benefit of revealing potential leads such as stratigraphic traps, which are not easily visible on seismic maps.
When Petoleum Geo-Services (PGS) took the plunge in the 1990s by ordering the world's first Ramform-style survey vessels, the company shook the seismic marketplace. Amid the aftershocks were attempts by competitors to develop other ultra-high capacity designs without infringing Ramform intellectual property.
That first generation of Ramforms is now being phased out and, in their place, third generation S-class tonnage is being introduced, starting with Ramform Sovereign early 2008 since when the ship has rapidly acquitted itself including setting up a new record to a towed stream array.
That record was established in May while the Sovereign was working in the Norwegian North Sea. She deployed 17 streamers which were towed 50m apart, narrowly beating the earlier record of 16 held by the Ramform Victory, which has gone to Japan's Ministry of Economy, Trade and Industry.
The new vessel is 16m longer than the previous Ramforms with significantly higher acquisition and transit speed, 25 per cent greater endurance, and 60 per cent higher production capacity compared to the existing Ramform fleet.
The Sovereign is predicted to establish further towing records later this year when she starts on the seismic industry's largest ever HD4D job for Petrobras where parts of the job will be conducted with 18 streamers, again with 50m separation.”
PGS expects to take delivery of a second S-class, Ramform Sterling, in Q2 2009.
Despite the energy-sapping merger with TGS-Nopec, a fraught process that has taken a year thus far but is yet to be completed, and the knock-on impact of this on Wavefield Inseis Q1 2008 performance, Wavefield Inseis Inseis appears to have landed one of the world's biggest 3D seismic and on-board processing contracts.
The client is BP, the location is Libya’s offshore Sirte Basin, and the work will be carried out using the Geowave Endeavour, which is the latest 3-D survey vessel addition to the Wavefield Inseis fleet.
At the time of writing, the company had received a letter of intent from BP. The work is expected to take about a year to complete. On-board processing will include SRME (Surface-Related Multiple Elmination) and full Pre-Stack Time Migration.
BP staged a return to Libya H1 2007, securing a package of on- and-offshore licenses. However, while the Sirte Basin is known to be prolific, it is also expensive to drill. The energy major said in May that year that offshore wells would cost some $130million apiece … little wonder that a major seismic sweep is being conducted first prior to firming up on targets.
And little wonder that Wavefield Inseis is assigning its flagship to the task; Geowave Endeavour should become operational late 2008, following her anticipated end of June launch at Norway's Fosen shipyard.
The 160m vessel will have a 16 streamer capacity and eight gun strings, and Wavefield Inseis says is will be ‘perfectly suited’ to meet the growing demand for high-density 4D seismic data and the need for wide-azimuth and multi-azimuth data acquisition.
However, the ship has other work booked prior to the Libya deployment with BP, including working for BG, carrying out 3D work in the Norwegian North Sea, teamed with another of the company's fleet … Geowave Master.
Like others in the seismic sector, Wavefield views the future with optimism, with solid demand anticipated by its CEO Atle Jacobsen who said at the company's Q1 2008 results announcement: “Despite operating in the shadow of the merger conflict since the autumn (2007), the company is now back on track, performing and developing according to our initial stand alone strategy.”
Wavefield Inseis has so far seen a 15–20 per cent improvement in contract rates for 2008 versus 2007 and ended the first quarter with a contracts backlog of $210million for the remainder of the year, with enquiries coming in for 2009.
Like others, the company has also identified a trend for surveys to become larger and more operationally complex. This is a trend that favours large capacity 3D vessels and 2D units working with standardised equipment.
The foregoing is just a taste of what is happening in the Norwegian survey business and the sector will be very much to the fore at Offshore Northern Seas 2008 in Stavanger, August 26-29.
