How far will Halliburton go in the seismic business?
  from: Offshore Engineer
  by: Andrew McBarnet
  Friday, June 01, 2001

You must begin to wonder whether Halliburton is going to re-enter the seismic acquisition business which it left in a hurry in the early 1990s when it sold Halliburton Geophysical Services (HGS) to Western Geophysical at what was considered to be a knockdown price at the time.

Halliburton could easily afford to buy any of the main contractors, apart from WesternGeco, the Schlumberger/Baker Hughes vehicle which dominates the market, particularly on the marine side. This means that CGG, PGS or Veritas DGC, all public companies, are in play and it is known that Halliburton has on occasion reviewed the takeover possibilities.

The reason for the idle speculation is Halliburton’s recent big spending to build up Landmark Graphics, which specializes in software-based integrated solutions for exploration, drilling and production. A few eyebrows were raised when Halliburton shelled out the best part of $180 million to acquire the data management business of PGS earlier this year. In fact, the purchase plugged a longstanding gap in Landmark’s offerings. Over the years rival Schlumberger GeoQuest in particular has been able to corner much of the market for oil company corporate and state oil agency databases.

Landmark last month announced that it was launching PetroBank CDS (corporate data solution), which is basically an enhanced version of the old PGS product that had won some key contracts around the world including Russia and Brazil.

In a less well-publicised move Landmark has also acquired the UK-based ILEX Technologies to bolster its Web-based technology. ILEX, only founded two years ago, has been developing a ‘virtual workspace’ concept for the E&P industry which provides a single point of access to collect, analyze and manage project data from multiple disparate sources with a built-in access entitlement and data security system.

Much more high profile has been Halliburton’s $100 million acquisition through Landmark Graphics of Magic Earth, which brings a highly successful if somewhat hyped 3D visualization and data mining technology and service into the mix. Magic Earth, led by CEO Michael Zeitlin, began life as a spin-off from Texaco and since its establishment in 1999 has established a growing business for its visualization and interpretation tools which are designed to cut cycle times and greatly improve accuracy.

For Halliburton the net effect of these accretions is that companies in the group can now mirror many of the capabilities of the main seismic contractors apart from the acquisition and processing services. It may therefore warm to the idea that offering seismic acquisition and processing services will lead companies to use its comprehensive data management, interpretation and visualization solutions through the lifecycle of an oil or gas field.

What may prove to be a clinching argument is the gradual change taking place in the perception of the role of seismic. The advent of 4C/4D type survey is just one example of how seismic is increasingly being seen as a relevant tool for every stage of exploration and subsequent optimal exploitation of the reservoir. All the main contractors have been racing to build their reservoir expertise, exemplified by the $33 million purchase by Veritas DGC at the end of last year of RC2, a leading independent reservoir characterization company based in Denver, Colorado.

The geophysicist of the future is destined to be part of a multidisciplinary team for the duration of a field’s lifetime thanks to the contribution of modern seismic technology. It could therefore make sense for Halliburton to maintain and develop a seismic capability in-house which will support its otherwise comprehensive reservoir services. Obviously its experience with HGS in the late eighties may still be too fresh in the memory, but the nature of seismic operations has changed radically in the past decade. OE