Fine summer for seismic
  from: Offshore Engineer
  by: Andrew McBarnet
  Friday, September 05, 2008

Midsummer stocktaking suggests that the E&P geoscience community is still in rude health. First signs of softening in the pricing of marine seismic surveys have not as yet shown up as anything but a conversation piece in the booming market worldwide, according to Andrew McBarnet.

No one so far seems fazed by the additional capacity of at least 20 vessels scheduled to join the world fleet in the next 18 months to two years. To some extent this may be bravado on the part of shipowners and contractors because everyone knows that at some point there will be too many vessels chasing too few jobs. Indeed Dalton Boutte, president of WesternGeco, told OE as much in an interview some time ago (OE April). Like other major contractors his view is that those companies with the state of the art vessels and differentiating technology are best equipped to ride out any difficulties.

That hypothesis has still to be tested. The pain experienced at the end of the 1990s when the seismic market tanked big time did not seem to be selective. In other words, all seismic contractors both big and small, were adversely affected. Admittedly the prevailing conditions are different. Over-supply of vessels coupled with an acute lack of demand is certainly not the case now as it was 10 years ago. Then, the oil industry was embroiled in an orgy of consolidation and downsizing against a backdrop of a dramatic drop in oil price (which at $10-12 a barrel seems a little comical these days). Oil companies had no incentive to invest heavily in exploration and were engaged in satisfying shareholders with a strategy of cutting costs and acquiring acreage and producible assets through mergers and acquisition.

Renewed enthusiasm

The huge increase in crude prices is clearly a big reason for the renewed enthusiasm for seismic exploration. Hydrocarbon accumulations which would have been deemed marginal or uneconomic are now prospective and worth looking for. International oil companies are running out of reserves, but are facing fewer and fewer access opportunities in which to search for replacements, hence some urgency in their exploration efforts. But Big Oil is by no means the main driver. In the North Sea, for example, the BPs and Shells are giving up on squeezing the last drop out of some maturing assets and relinquishing small finds because for them the economics and resource allocation required for development do not make sense. This process is opening the field to a new generation of aggressive independents, many on the back of venture capital or listing on junior stock market exchanges. They believe that they can profitably take advantage of modern geoscientific methods to prove up and produce minor league assets which are beneath the dignity of their bigger rivals. The recent 2008 economic report from UK Oil & Gas, the representative body of the UK offshore oil and services industry, has a graph showing the growing contribution being made by smaller independents.

Even if the economic environment is different, when the predicted over-supply of marine vessels kicks in, it’s hard to believe that there won’t be some casualties at least among some of the smaller fry, mainly Norwegian seismic operations floating on investment money washing about when times were good. Having said that, there still seems to be money around: for instance, the Norwegian company GGS-Spectrum recently split the company up and floated off the majority of the seismic business into a new company Spectrum which was successfully listed on the Oslo Axess market at the beginning of July. The demerger ended an unhappy three-year union between GGS, initially a multi-client seismic survey company, and UK-based Spectrum Energy & Information Technology, a longstanding minor seismic player with interests in speculative surveys and data processing. The new Spectrum has already signed a sweet deal with GX Technology (GXT), a subsidiary of ION Geophysical Corporation, for the 12 month charter of the GGS Atlantic seismic vessel which it has inherited. The GGS Atlantic will acquire long offset 2D seismic data for ION GXT’s BasinSPAN programme of surveys aimed at building ultra-deep seismic data libraries of prospective locations around the world which are designed to help geoscientists better understand petroleum systems, from source rocks to the reservoir traps. Again Polarcus, the latest Norwegian inspired marine seismic company which ordered six seismic vessels straight off the bat (OE July), has already secured total financing of some $542 million, or 60% of the estimated $900 million project costs for the building programme. Polarcus chief executive Rolf Ronningen acknowledged the achievement. He said: ‘We are very pleased with the results of this round of financing, especially considering the current climate in the global financial markets. This new financing will help secure the ongoing funding of Project Polarcus well into next year, ensuring that we remain on course to commence our first seismic operations on schedule in Q3 2009.’

Such deals seems to defy logic, or underscore a depth of confidence in the ability of the marine seismic fleet to sustain continued growth. Assuming what goes up must come down eventually, we can say that the larger seismic contractors should be better placed in the downward cycle as a result of their focus on technology development.

Roman venue

Visiting a major show like the EAGE Conference & Exhibition held in Rome in June – with a Praetorian Guard on tap! – is to be struck by the relentless quest to attract business through innovation designed to improve the quality of subsurface data at reduced cost to clients. The continuing effort makes nonsense of the oil companies’ attempt at one time to categorise seismic as a commodity business. Modern day seismic is not something you can easily buy off the shelf if you are at all fussy about the outcome of the survey, and in fact many oil companies are under-resourced to challenge the research-based expertise of the major contractors, especially in the data acquisition and processing field.

On the marine seismic acquisition side, the big companies like WesternGeco, CGGVeritas and Petroleum Geo- Services (PGS) have the budgets to sustain a continuing R&D;programme which is beyond the means of the minnows in the business. Thus it was these companies which opened up a potentially rich source of new survey business using multi- or wide-azimuth methods to image complex geological settings such as the subsalt of the Gulf of Mexico and elsewhere. Not only is the marine operation more complex and costly to launch, but the data processing presents its challenges so that smaller fleet operators are better off concentrating on bread-and-butter 3D seismic surveys for which the industry still has a healthy appetite.

As a new technique, wide-azimuth is of course likely to evolve over time with the emphasis on making the exercise less elaborate. Currently wide-azimuth surveys typically require at least two source vessels and one or more recording/source vessels sailing in straight parallel line patterns over the target in order to achieve greater azimuth coverage and high signal to noise ratios. WesternGeco has now gone more public (OE June) on its circular geometry acquisition method for wide azimuth coverage, for example a paper at EAGE Rome. The development is typical of how rapidly a seismic technology can develop. The claim for Coil shooting is that high quality, full azimuth recordings can be achieved by just one vessel equipped with multiple streamers and one or two sources, a much tidier and more economic operation than the earlier surveys. The vessel sails in a continuous mode along single or multiple preset circles, among other things eliminating the down-time necessitated by line change turns.WesternGeco acknowleges that Bill French, a founding father of the modern 3D seismic survey, recognised the potential of the technique in the 1980s but was constrained by the resources of the day from any sort of implementation.

Circular argument

WesternGeco says that it happened on the Coil application while engaged in a richazimuth survey in the Gulf of Mexico. During the semi-circular turns of the vessel making a line change of direction, it was noticed that useful data could still be acquired contrary to expectation. So then it was just a matter of completing the circle, so to speak, to come up with a full method. The potential was tested in the Gulf of Mexico and the Black Sea to confirm the hypothesis. The company notes that its unique Q-Technology is an enabler, thanks to steerable streamer devices to control the depth and lateral position of the streamer, plus the trademark single sensor recording system, acoustic poisitioning network and dynamic spread control. If the method is half as effective as WesternGeco claims, it will be interesting to see how long before other companies follow suit with some variation on the theme.

At EAGE Rome, PGS was excited about the continuing development of its dual sensor streamer launched a year or so ago. It has been successfully trialled on 2D vessels off the northwest European continental shelf and offshore Australia, and will soon be seen in action on 3D vessels. The secret of its success is the recording of both pressure and velocity fields, as opposed to pressure alone in a normal hydrophone-based streamer. According to a PGS paper in Rome, ‘Properly combining the recorded signals from the particle velocity sensors with those from the hydrophones cancels sea-surface ghost reflections and removes the notches from the data’s frequency spectrum caused by those ghost reflections.’ The benefit is that a streamer can be towed deeper below the sea surface than is currently practical allowing continuation of recording operations in rougher seas while also increasing the potential bandwidth of the data.

Such new technology could give the R&D investing contractor an edge if the market becomes more price sensitive.

A company that now comes into that category has to be Wavefield Inseis. This Norwegian upstart has not only grown its fleet sufficiently to be able to claim global reach in a matter of three years, but also set itself up from the start as a technology driven company. A good example would be its backing of the Bergen-based MultiField Geophysics company along with StatoilHydro Ventures and the Norwegian Technical Institute. The company announced a month or so ago that it had completed field tests of its ocean bottom cable (OBC) technology over the Peon hydrocarbon reservoir, offshore Norway. This is no ordinary OBC cable but one which uses both seismic four component (4C) and electromagnetic (EM) sensing technology, in other words it is daring to encroach on the preserve of Electromagnetic Geoservices (EMGS) and Offshore Hydrocarbons Mapping (OHM), not to mention the EM involvement of WesternGeco and PGS. The company says that in the test the technology was able to delineate the targeted gas field.

Wavefield and its friends at MultiField have implicitly acknowledged the emerging consensus that the shine has gone off marine controlled source electromagnetic (CSEM) surveys as the big new thing and will not return until the data can be more successfully integrated with seismic and other data.

A combined acquisition system would be a start. PGS since its acquisition of MTEM is trying for the same thing but hoping to use a towed streamer approach, which if effective would be far cheaper and more flexible than any ocean bed acquisition.

Wise heads

Meantime OHM and its newly acquired Houston-based subsidiary Rock Solid Images are putting their energies into a three year joint industry project with Total, Chevron and DONG Energy plus the UK government’s Department for Business, Enterprise & Regulatory Reform (BERR) to look into well integration with seismic and electromagnetics (WISE). The objective is said to be the provision of improved maps of reservoir properties such as hydrocarbon saturation across a field and will lean heavily on the fundamental rock physics work carried out by Rock Solid over many years.

The key to the WISE Consortium is integration of data which is becoming something of a mantra in the geoscience community and was heard a lot at EAGE Rome, appropriate given that the Association prides itself on its multi-disciplinary status attracting the likes of geologists, geophysicists and engineers under the same roof. EMGS was upfront and centre with its launch of Clearplay, said to the the world’s first fully integrated EM system, providing ‘end-to-end EM services and products in support of hydrocarbons exploration.’

Perhaps as significant was the introduction of Bridge. Developed in conjunction with Blueback Reservoir in Norway, the software was described as offering easy integration of (EM) data with other geophysical and geological information, resulting in a clearer and more complete understanding of the subsurface.

Terje Eidesmo, EMGS chief executive officer, said it was an important milestone for EMGS and the industry. ‘Bridge,’ he said, ‘will enable our customers to capitalise on the benefits of EM by allowing the easy integration of EM information with their workflows.’

This kind of integration work presages the day when many kinds of data such as seismic, well log, EM, magnetotellurics (MMT), and potential methods data (gravity and magnetics) can all be used to constrain the earth model offering interpreters a much clearer vision of the subsurface for exploration and reservoir characterisation.

Excusing the pun, potential methods, usually over-shadowed by seismic, are being spoken about with much greater gravity these days. Their contribution to regional and basement understanding of hydrocarbons plays are helpful in solving the puzzle, as are MMT.

In Rome,WesternGeco presented a poster on the first application of marine MMT to improve the depth imaging in the Santos Basin, offshore Brazil. The company has also written recently about salt mapping in the Gulf of Mexico extolling the benefits of a combined seismic, MMT and full tensor gravity data interpretation.

In short, multiple geophysical methods are likely to become an increasingly significant feature of the landscape in the years to come. OE

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