Challenging times as doubts raised over CSEM technique

Paul Boughton

Life in the controlled source electromagnetic survey camp remains challenging, reports Jeremy Cresswell.

With both main protagonists in the controlled source electromagnetic (CSEM) survey camp suffering from the impact of last year's plummeting oil prices, there is also lingering scepticism in some quarters regarding the efficacy of this offshore technique for detecting the presence of hydrocarbons.

While directors at Offshore Hydrocarbon Mapping (OHM Group) have taken a cut in pay and trimmed their workforce to help the UK company ride out current difficulties, Electromagnetic Geoservices (EMGS) of Norway has restructured, cut its workforce and hired in a new chief executive. Both companies have now reconfigured their vessel requirements as a result of less work.

Of the two, EMG is the more successful and, as oil prices showed mid-2009 signs of recovery, this was reflected by a number of contracts being won. OHM too has secured contract work, but it appears to be rather short-term, though the company is involved in a three-year joint industry project.

A measure of the difficulties is that, even allowing for fleet reduction, recovering oil prices and new business, Roar Bekker, EMGS CEO said in a statement: "Although we have been successful in our efforts to reduce operating costs in late 2008 and early 2009, we must now further reduce our operating expenses to match the current demand environment.

"However, we believe that the plan announced is necessary and the right course of action to streamline our operations into a more efficient and commercially oriented business. These actions will secure a sustainable financial position short-term, whilst enabling the company to respond to increased demand in a profitable manner."

Bekker replaces Terje Eidesmo, who has been on sick leave for some months. Under Bekker's leadership, EMGS anticipates that the measures will result in annual reductions in operating expenses of about $8-10million.

A further impact of the cutbacks at EMGS is that the company intends to cut back on its research and development programme, except where collaboration with customers is involved, and concentrate on marketing existing products. The intention is to pay particular attention to nurturing the existing strategic alliance with Fugro regarding the application of EMGS's apparently unique 3D EM technology.

The Norwegian firm operates the world's largest EM (electromagnetic applications) survey vessel fleet and has conducted over 400 surveys to improve drilling success rates across the world's mature and frontier offshore basins.

This is a lot more than OHM has thus far completed, also ExxonMobil which has utilised a proprietory variation on the CSEM theme known as R3M on a variety of locations offshore Brazil, Colombia, Canada, US Gulf of Mexico and in the West Africa theatre, notably Nigeria.

Arguably the two must significant business developments for EMGS of late is that, based on the new production licenses awarded to existing clients in the 20th Licensing Round on the Norwegian Continental Shelf this year, the company expects to realise uplift revenues in excess of $10million from the Barents Sea multi-client 3D EM campaign conducted in 2008.

Bekker sees 'significant potential' for additional sales from new customers that have been awarded 20th Norwegian Round licenses.

The latest and very significant piece of good news is that the Norwegian firm is to carry out a CSEM campaign offshore Newfoundland, utilising the survey vessel Siem Mollie. This $12million package of work is for a so far undisclosed client. However, Bekker believes that either ExxonMobil or StatoilHydro is that client as, in April this year, Statoil declared a discovery at Flemish Pass, some 500km east-northeast of St John's, Newfoundland.

The clue pointing to ExxonMobil is more compelling. And it lies in the EMGS statement announcing the contract. In it, Bekker says: "We value our long-term relationship with this supermajor, and we are proud that EMGS has been asked to continue the work we started in this area in 2006. The customer has become one of the world's leading users of 3D EM and is applying our technology as an integrated part of its frontier exploration programme and workflow, thereby reducing risk in a challenging exploration environment."

It happens that CSEM work was conducted by EMGS for ExxonMobil in the Orphan Basin in 2006.

ExxonMobil and StatoilHydro, of which EMGS is in essence a spin-out, are the world's heaviest users of CSEM seabed logging to date.

As for OHM, its much needed good news was revealed in late May. The Aberdeen-headquartered firm had landed a modest contract with UK explorer Nautical Petroleum, which is keen to develop its Quadrant 9 Kraken heavy crude discovery but needs to build a better picture of the scale of this apparently promising find. This $1million contract marks the first full commercial use of its WISE (Well Integration with Seismic and Electromagnetics) technology that uses available seismic and well data to underpin CSEM survey design enabling CSEM technology to be successfully applied in technically challenging areas.

Kraken is located on North Sea block 9/2b and the just booked survey follows a successful pilot project undertaken for the licence partners earlier this year.

CSEM data acquired by OHM during the pilot project was integrated with the client's existing well and seismic data using WISE workflows and determined that the resistive body associated with the discovery in well 9/2-1 extended significantly north and south of that well.

The appraisal survey will now map the lateral extent of the discovery and help distinguish between competing geological hypotheses, which in turn will guide further appraisal drilling. The campaign was scheduled to be conducted by OHM's dedicated vessel OHM Leader in June, with initial results expected in July this year.

A successful outcome is important both for Nautical and partners Canamens Energy North Sea and Celtic Oil, and also OHM as WISE is the subject of a three-year joint industry project co-ordinated by the UK North Sea industry body ITF (Industry Technology Facilitator) and launched in 2008.

The goal of the project, sponsored by a consortium of oil companies and the OHM Group, is to develop new and innovative methods of jointly integrating and interpreting seismic, CSEM and well log data - the ultimate objective being to provide improved maps of reservoir properties, such as hydrocarbon saturation, across a field.

Investigations include establishing the optimum algorithm for remapping CSEM results into the higher resolution seismic data and developing a joint inversion methodology for seismic and CSEM data.

This ground-breaking research, clearly being applied for real in the case of Nautical's Kraken asset, will further assist the industry to exploit the combined strengths of each of these valuable data types, allowing application to both existing and newly acquired data.

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