While Norwegian group Electromagnetic Geoservices (EMGS) was forced to cut fleet capacity because of deteriorating market conditions, UK rival Offshore Hydrocarbon Mapping (OHM) said late October that it was it was in early stages of discussions that 'may or may not lead to an offer being made for the company'.
Both companies have fallen victim to the financial and market forces that today besiege the global economy though, with the Organisation of Petroleum Exporting Countries (OPEC) acting as catalyst, the negative impact on the offshore oil and gas industry will hopefully be short-lived.
In EMGS's case, the company's fleet of five ships was reduced from five to three active units, while OHM complained that 'combined' vessel-utilisation figures had become "unacceptably low" and that there was "overcapacity". To whit, the UK firm's two vessels have also spent time tied up.
At the time of writing, EMGS was awaiting delivery of the first high capacity, purpose-built EM vessel - BOA Thalassa - from a Norwegian shipyard. Moreover, a second vessel - BOA Galatea - is due to join its fleet during Q2 this year (2009).
Notwithstanding the current oil price collapse, the issue here seems to be about misjudging the market in terms of market demand for Controlled Source Electromagnetic Resonance (CSEM), even though there has been a big uptake in the technology, judging by the sizeable number of contracts executed during 2008 - and the scope/scale of some of the surveys, especially in the Norwegian Arctic.
That said, and despite ExxonMobil being a long-time user of its own version of CSEM for exploration, a sense of scepticism among the majors about the value of electro-magnetic techniques in the hunt for hydrocarbons apparently prevailed at the 2008 European Association of Geophysicists and Engineers (EAGE) conference in Rome.
This is reinforced by a recent market research report, which showed that only about one-third of the oil companies polled were users of CSEM (EM) technology. And yet, according to OHM, three-quarters of those oilcos that have used the technology are satisfied with the results achieved on their behalf.
If there is doubt about the value of EM, then why is it that there was such a hefty commitment to EM-based surveys in Norwegian waters in 2008? Naturally the lion's share of the work went to EMGS, though Rocksource, also Norwegian, also secured at least one package.
That work started in January with an extensive and diverse programme of electromagnetic (EM) imaging surveys over the Troll field, which is situated in a shallow water region of the North Sea.
The primary objectives of the campaign were to validate the latest EM imaging technology developed by EMGS and, in collaboration with funder, Troll operator StatoilHydro, to advance a new generation of EM technology and applications.
The two companies had worked together on Troll in 2003 using early generation EM; this time a suite of new systems was deployed. This included a high density grid geometry to enhance EMGS's understanding of 3D resistivity mapping and how this can be used to delineate reservoirs and to estimate hydrocarbon volumes. A course grid EM scanning survey was also run, but across a larger area to demonstrate the effectiveness of scanning in detecting commercial hydrocarbon reservoirs rapidly.
It was in April that StatoilHydro awarded its next contract to EMGS, this time to determine the hydrocarbon potential of exploration prospects in the Norwegian sector of the Barents Sea using its seabed-logging technology.
Bear in mind that, unlike seismic surveys, seabed logging can identify reservoirs before seismic shoots are conducted, and where seismic methods indicate the presence of a suitable structure, seabed-logging data improves confidence in ranking the prospect, and it has the potential to find hydrocarbons in traps that cannot be detected using seismic methods. That work kicked off in the spring of 2008.
May saw EMGS secure industry pre-funding to begin an extensive multi-client electromagnetic (EM) scanning survey in the Barents Sea, ahead of Norway's 20th exploration licensing round. In the event, it became the world's largest multi-client EM survey thus far, covering more than 9000sq km (30 blocks), includes all the Barents Sea acreage scheduled for the 20th Round.
Following completion, EMGS CEO Terje Eidesmo said the results revealed 'valuable information' related to the prospectivity of the survey areas and that the EM data would give potential bidders a 'competitive advantage' during the licensing round, and would help them to target their exploration resources more effectively.
Time will tell in that regard as there remains no substitute for actual drilling of a well to determine absolutely the presence of hydrocarbons.
Come Q3 2008 and EMGS had secured yet more work, much of it stemming from the Barents Sea multi-client survey. One package involved the deployment of its Clearplay service, which utilises densely sampled, wide-azimuth 3D EM grids. This service integrates 3D seismic and other information aimed at improving the estimation of hydrocarbon volume and distribution.
It is important to realise that the EMGS story is not confined to Norwegian waters as, during the second half of 2008, the company secured groundbreaking contracts in the US Gulf of Mexico, offshore Libya and a shallow water shoot off Malaysia. The Libya contract is intriguing, partly because this is the firm's first piece of work for an OPEC member state; also in the Mediterranean. The name of the client has not been disclosed.
For British rival OHM, the big positive of 2008 is surely the legacy success of its EM survey work conducted in Falklands waters back in 2006, which paved the way to UK independent Rockhopper conducting a 3D survey the following year and which has confirmed a number of apparently highly promising targets for future drilling.
Rockhopper says it is to start advanced work on the data, which will include AVO (amplitude versus offset) analysis, imaging studies, geochemical modelling, further detailed log analysis, depth conversion and reservoir modelling.
OHM ran two EM surveys in the North Falkland Basin, both of which indicated the presence of discreet resistors in the area of the drilling targets. They covered prospect J1 and lead K. Those areas were also the subject of a 2D seismic survey, also acquired during January and February, 2006.
A key lead K prospect is Ernest, located 100km north of the Falklands. A four-way dip closed area of some 2880 acres with a stock tank oil in place estimate of at least 300 million barrels. OHM recorded a strong CSEM response confined to the enclosure.
A second (unnamed) prospect 40km from the islands described as a 'shallow rollover' was identified as having an areal extent ranging 2000-6000 acres with potential in place reserves of 180-600 million barrels. However, Rockhopper has indicated further work is required to progress this particular target to prospect status whereas 'prospect Ernest (is) sufficiently defined to drill'.
All told, the work carried out to date has identified five oil and gas plays with a recoverable reserves potential of billions of barrels. Intriguingly, a well drilled by Shell more than 10 years ago just clipped the edge of one of the Rockhopper targets.
That would appear to be a respectable result, moreover, one that really does demonstrate the value of EM in the quest for new hydrocarbon resources.