Marine Seismic Survey

Marine Geophysical Exploration

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No Narcissists in Geo-Services – NONGS

No Narcissists in Geo-Services (NoNGS)

No Psychopaths in Geo-Services
Characteristics of Psychopaths
No Bullies in Geo-Service (NoBGS)

…  we argue that organizations can adopt collective narcissistic identities that will produce wrong (i.e., non-virtuous) behavior. This happens because the organization’s narcissistic identity—including the corresponding motive to protect its identity—is more powerful than a motive to behave morally

Extreme narcissistic organizations want to appear ethical because appearing ethical feeds their narcissism, and so the costs of creating formal ethics programs are small compared to the ego-defense benefits. But such programs are instrumental for the narcissistic identity, not ethical conduct, and therefore will not much affect the behavioral status quo. ~ Organizational Narcissism and Virtuous Behavior

Why Enterprise Compliance Programs Fail (24-April-2016)

Our Deepwater Horizon (4-April-2016)

Workplace Bullying is an Agency Problem and Often a Crime (1-February-2016)

Between the Bully and the Deep Blue Sea (5-June-2015)

Avoiding the Tragedy of Whistleblowing
Bribery – Wikipedia

Bribery is the act of giving or receiving something of value in exchange for some kind of influence or action in return, that the recipient would otherwise not offer. Bribery is defined by Black’s Law Dictionary as the offeringgivingreceiving, or soliciting of any item of value to influence the actions of an official or other person in charge of a public or legalduty.[1] Essentially, bribery is offering to do something for someone for the expressed purpose of receiving something in exchange. – Wikipedia

It is unethical for a lawyer to threaten to present criminal, administrative or disciplinary charges to obtain advantage in a civil dispute.  Blackmail consists of threats made to gain anything of value from the other person, such as money, property or sexual favors.  Extortion constitutes a threat to accuse someone of a crime, or to expose or impute to him/her any significant misconduct, accompanied by a demand for payment “or else.”

Shearing the Trough in Marine Seismic Streamer Acquisition with Nodes

Ocean Bottom Node Seismic Acquisition Challenges High-end Seismic Streamer Acquisition

History is so important. It has been said that the three most important words in the English language are “remember, remember, remember.” 

Chances multiply when you take them.

Since May 2015, MarineSeismicSurvey (MSS) blog articles have mostly focused on the marine seismic streamer market as a gauge of the health and trend of offshore geophysical exploration.  However, marine seismic streamer activity can no longer be considered singularly in such analysis.  The growing ocean bottom seismic (OBS) market, being forged by ocean bottom node (OBN) technologies, must be taken into account moving forward.  The percentage share of OBS in the marine seismic survey market has been increasing over the past decade, and some analysts are predicting that OBS will command a 30% marine seismic survey market share by 2020 with its continued rise.  This is remarkable for several reasons.  The plunge in oil prices in mid-2014 significantly impacted marine geophysical exploration.  However, marine geophysical exploration has historically been a boom or bust business defined through a litany of bankruptcies, mergers, and acquisitions.  Oil prices have always been cyclic.  Therefore, the trend and buoyancy of the marine geophysical exploration survey industry remains a good indicator for the overall trends and health of the offshore oil and gas industry. 

Marine seismic surveys, in simple terms, map the subsurface points between a source and receiver(s).  For some time, the most time-efficient and cost-effective way to map these points is through narrow azimuth (NAZ) streamer acquisition.  Standard NAZ marine seismic acquisition is where source(s) and streamers are towed together behind a single vessel.  It is principally the cost of the seismic vessel and seismic in-sea equipment that determines the price of a survey.  Surveys are priced on a day rate, square kilometer rate, or the number of these “mid-points”, or common depth points (CDPs) mapped.  Because each source, almost always an air gun blast or “shot”, maps to the number of receiver sensors located on the streamer cables, there has been an incentive to tow as many streamers as possible to reduce time and costs of marine seismic surveys.  To facilitate this, newer marine seismic streamer vessels have steadily become larger and more powerful.  They are also more expensive to equip and operate.  OBS acquisition has been slower and more expensive method.  However, OBS is seen to provide better data quality.  There have been notable technology innovations introduced into the marine seismic streamer market during the past decade to improve data quality.  Similarly, more powerful computing power has improved final data quality and imaging of marine seismic streamer acquisition.

The marine seismic streamer market has always been tenuous and competitive.  In late 2013, CGG acquired Fugro GeoScience’s marine seismic streamer fleet.  Fugro exited the marine seismic streamer market before the mid-2014 plunge in oil prices.  However, they retained their OBS capability as a joint venture with CGG which is Seabed GeoSolutions.  OBS data was regarded as “better” because it was derived from multi-component (2-4) sensors, whereas seismic streamer data sensors were single component.  One of the problems with marine seismic streamer data was the loss of recorded bandwidth which correlates to depth that sources and streamers are towed.  This loss of bandwidth is known as a “ghost notch” caused from upcoming energy cancelling down-coming energy from the water surface.  In 2007, a dual-sensor towed streamer was introduced into the market that could rival OBS data quality.  In 2009, the first dual-sensor 3D survey was carried out, ushering in an industry wide embrace of “broadband” seismic streamer data.  Another way to acquire broadband seismic data from single-sensor streamers is through varying the depth of the streamers and then applying sophisticated data processing algorithms.  In 2013, a 4-component streamer was introduced into the market. As vessels got larger and towed larger spreads, there also became a need for improved streamer control equipment. 

Innovation distinguishes between a leader and a follower.

Steve Jobs

We are witnessing a seismic change in consumer behavior. That change is being brought about by technology and the access people have to information.

Howard Schultz

While there have been remarkable innovations and advances in marine seismic streamer acquisition technologies and techniques, advances have also been made in OBS that are together transforming marine geophysical business model paradigms.  In a competitive market, innovation is essential.  However, conservative concession operators have shown a reluctance to pay any premium for such innovations.  Within the MSS blog article, Toward a New Horizon in the Marine Seismic Streamer Industry (24-January-2018), we reminisced about Schlumberger’s seismic acquisition entity, WesternGeco (WG)’s, history and their contributions to the marine seismic industry.  Schlumberger’s CEO, Paal Kibsgaard, announced that the company would exit the marine and land acquisition businesses in January 2018.  The reason essentially boiled down to the return on investment developing and deploying innovative technologies.  The MSS blog article, Upstream Exploration and the Paradox of Choice (5-June-2015), describes how the operator competitive bidding process discourages more expensive innovative proprietary technologies until they are commoditized and offered by a variety of service company providers.  An example of this is in the variety of solutions offered for marine broadband streamer acquisition.  Broadband is commoditized, the specific techniques and equipment used are distinct and vary in equipment and operational costs.

On 15 November 2018, it was announced that relative newcomer, Shearwater GeoServices (Shearwater), had completed the acquisition of the marine seismic acquisition and operations of WG.  Shearwater’s portfolio now includes marine seismic streamer, as well as ocean bottom seismic (OBS) exploration services.  On 27 December 2018, seismic streamer player, Polarcus, announced their winning a combined towed streamer and ocean bottom node (OBN) contract that they will perform cooperatively with SAE Exploration.   Earlier, 7 December 2018, ocean bottom node player, Magseis, acquired Fairfield’s Seismic Technologies data acquisition business to become Magseis Fairfield.  These moves in late 2018 have redefined the marine seismic industry.  Both Magseis and Shearwater are both relative newcomers to their respective principal markets.  Through their acquiring additional marine data acquisition resources, they are now both dominant players.  Shearwater added seven (7) marine seismic streamer vessels to their fleet, as well as three (3) multipurpose source and OBS vessels.  MagSeisFairfield will also have a dominant position in the OBS/OBN market.   

Schlumberger made a decision to exit the data acquisition game.  It has been my position since my first blog post article, The Seismic Vessel Over-Capacity Problem (5-May-2015) that the marine seismic streamer market provides a snapshot of the trends and health of offshore development and overall oil and gas spending and growth.  Both Schlumberger (of which WG was a part) and Fairfield will continue to have a presence in providing seismic data processing, imaging, and multi-client (MC) products and services.  Both Schlumberger and Fairfield are innovators of proprietary technologies in marine seismic acquisition and are currently pursuing claims of patent infringement against their rivals.  Schlumberger’s is challenging ION streamer control technology.  Fairfield’s recent claim of patent infringement of their OBN acquisition technology by Seabed GeoSolutions (SG) are current examples.  Both Shearwater and MagSeisFairfield will quite possibly be in sole possession of cutting edge proprietary data acquisition technologies. 

A century ago, petroleum – what we call oil – was just an obscure commodity; today it is almost as vital to human existence as water.

James Buchan

I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.

JefF Bezos

The plunge in oil prices in mid-2014 led most seismic streamer acquisition vessel owners to reduce the number of operating vessels to adapt to the reduced offshore exploration opportunities.  In the near-term, this took a large fleet of capable vessels and equipment off the market.  With reduced demand for oil exploration, seismic streamer vessel fleets have been decimated.  The marine seismic acquisition equation has changed significantly.  Over-capacity in the marine seismic streamer vessel market exists when the number of vessels (streamers) in the market is greater than the demand for data acquisition surveys that will employ such vessels.  In a robust demand market, larger fleets could be deployed strategically to minimize costly uncompensated transit times between surveys.  Equipped streamer vessels are expensive to maintain.  The objective is always to keep vessels working and reduce transit time.  If the marine seismic vessel is on-site, but idle – or on standby – for a variety of reasons, the goal of the vessel owner is to be compensated for the idle time by the contractor.  Of course, the operator/contractor also wants to minimize their incurred expense when vessels are not acquiring data (which meets the contractor data requirements) in the (contract) acquisition business model.  The marine seismic streamer fleet had been steadily adding vessels capable of towing larger streamer spreads, which also meant reduced survey times.  Larger spreads complete surveys in less time.  In a market with reduced opportunities it is even more difficult to keep fleets working steadily and profitably.

In spite of all of these factors, reducing survey time and cost to operators, especially during a time of reduced oil prices, survey cost is the principal consideration.  In times past, in areas of robust exploration, multiple seismic vessels could be working in the same area.  This was problematic for high quality seismic data acquisition.  The sources used by the different survey vessels would impact the seismic data.  Seismic interference, as it was referred to, occurred when the source signal from another survey vessel polluted the recorded records from the primary survey.  Expensive time-sharing agreements would compel seismic vessels to cease data acquisition while the other recorded to reduce seismic source interference.  However, there are now seismic data processing techniques which can separate out unwanted seismic signal, thus again reducing idle time and expense once caused from seismic source interference.  In fact, such data processing has been refined enough to allow surveyors to intentionally overlap source interference.  As mentioned earlier, the points being mapped are essentially the midpoints between the seismic source and receivers.  Adding sources in acquisition and overlapping sources for deblending in data processing is now an offered solution which again reduces survey time and cost, but increases potential vessel idle time.

Geophysical survey customers are cost conscious consumers and are, for the most part, risk adverse and not aggressive using innovative technologies that increase survey costs.  However, geophysical survey customers seem willing to try new technologies and techniques that decrease survey costs.  In such a competitive environment, customers can often get the benefit of both new technology and techniques without a premium cost.  The incentive for vessel owners is to keep the vessels as busy as possible to reduce loss from idle time.  All of these factors do not easily explain the rise in OBS/OBN marine seismic market share so much as the decimation of the marine seismic streamer fleet.  Marine seismic streamer acquisition is still the most time efficient marine seismic acquisition technique.  In times past, offshore project development required that oil prices be above $70 USD/bbl.  This value is not firm, but any trading value of over such an arbitrary threshold provides more opportunities for investment in seismic surveys.  Most frontier exploration initiates with 2D (single streamer) marine seismic surveys.  This data can then be used to evaluate the area and plan subsequent 3D (multiple streamers) marine seismic surveys, which in turn define targets for offshore drilling.  4D marine seismic streamer acquisition is used over existing reservoirs to improve oil recovery.  4D programs are intended to replicate the source and receiver positions of previous 3D surveys and detect changes over time and determine optimal drilling locations. 

The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.

Bill Gates

Predicting oil prices is anyone’s guess.

Soren Skou

In the current market (with oil prices trading below the threshold value for profitably), developing new fields is prohibitive.  OBS/OBN acquisition can focus on developed or trafficked areas where streamer acquisition is hindered by obstructions or other hazards and risks that exists when towing a 1100 m x 8000 m (or larger) streamer spread 5-15 m below the sea surface.  OBS/OBN exploration programs can be more focused on quality over quantity of CDPs.  In other words, getting more oil and gas from already developed fields where there is existing infrastructure in place is less risky than exploring in remote expansive areas.  The improved data processing deblending techniques provide the ability to acquire marine seismic data with multiple overlapping sources.  Add to this more sophisticated interpolation algorithms means new acquisition source-streamer configurations can be employed to reduce survey time and costs.  Less in-sea equipment also has many operational advantages.  Towing wider spreads with fewer streamers can save on fuel and reduce the number of streamer control and positioning equipment to monitor and maintain.  Of course, from a health and safety perspective, reduced maintenance means less risk exposure by offshore workers.

OBN seismic data acquisition is becoming more efficient and less costly to deploy and is now poised to challenge the high-end marine seismic streamer market.  OBS/OBN technology is equipped with multicomponent sensors that can collect full azimuth seismic data.  The step change advances in OBN include longer battery life in nodes and faster automated deployment.  Much the higher cost of OBS/OBN is attributed to time efficiency, where as much of the expense for marine seismic is the large and powerful streamer vessels themselves.  OBN technology can acquire 4D seismic data, as well.  OBN surveys will take market share away from high-end marine seismic streamer surveys, especially as oil prices remain below the offshore development threshold price.  In this cost sensitive environment, cost effective 3D exploration employing a combination of three (3) or more sources and seismic deblending data processing techniques will be attractive for frontier exploration.  Marine seismic streamer and OBN will battle for acquiring data to reach untapped regions of existing developed fields.  This is what I believe will shape the marine geophysical data acquisition market.  As has always been the case, oil prices will continue to control marine seismic market.  Also, as has always been the case, innovation that best solves the problems of customers will win the day.    The plunge in oil prices in mid-2014 significantly impacted marine geophysical exploration.  Marine seismic will remain a boom or bust business defined by bankruptcies, mergers, and acquisitions until there is a paradigm shift in how innovation is embraced by marine seismic survey customers.

Keeping customers is about the experience, and the employees control the culture and temperature of the business. Never forget that.

Steve Wynn

At its heart, engineering is about using science to find creative, practical solutions. It is a noble profession.

Queen Elizabeth II

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Second Open Letter to PGS Exploration UK Limited Directors Rune Olav Pedersen, Gottfred Langseth, Christin Steen-Nilsen, Carl Richards and UK Serious Fraud Office (15-Oct-2018)

Second Open Letter to PGS Exploration UK Limited Directors Rune Olav Pedersen, Gottfred Langseth, Christin Steen-Nilsen, Carl Richards and UK Serious Fraud Office

Regarding:  Petroleum Geo-Services ASA and PGS Exploration UK Limited Director Abuse of Fiduciary Duty, Fraudulent Misrepresentation and Vexatious Litigation

Unanswered Letters:

UK ActionFraud

UK Serious Fraud Office

Norway Police

Caseworker(s) Information Commissioner’s Office

Rune Olav Pedersen, PGS Exploration (UK) Limited (PGSUK) Director

Gottfred Langseth, PGS Exploration (UK) Limited (PGSUK) Director

Christin Steen-Nilson, PGS Exploration (UK) Limited (PGSUK) Director (no e-mail)

Carl Richards, PGS Exploration (UK) Limited (PGSUK) former Secretary

CC:

Gareth Jones, PGS Exploration (UK) Limited (PGSUK) Human Resources Manager

Daphne Bjerke, Petroleum Geo-Services ASA (PGS) Data Protection Officer

John Francas, PGS Exploration (UK) Limited (PGSUK) Head of Legal

Lars Mysen, Petroleum Geo-Services ASA (PGS) General Counsel

Transparency International – Norway

SEG Whistleblower – membership

My name is Steven D. Kalavity.  I am a citizen of the United States of America (USA).  I currently live in Chiangrai, Thailand on visa with my Thai wife and three Thai – American children. From 26 September 2010 through 31 December 2013, PGS Exploration UK Limited sponsored me and my family dependents on a Tier 2 visa.

PGS Exploration UK Limited, 4 The Heights, Brooklands, Weybridge, England, KT13 0NY, directors and former secretary have engaged in aggressive and inhumane vexatious litigation in a foreign country to suppress protected public disclosures.  I have made allegations that the Company directors and former secretary have engaged in criminal behavior.  I am a whistleblower.

PGS Exploration UK Limited directors are executives of Norwegian company Petroleum Geo-Services ASA, based in Lysaker, Norway.  I am asking the authorities in England and Norway to immediately demand that PGS Exploration UK Limited directors withdraw all their legal claims made in Thailand.

The claims put forward in Thailand are in breach of PGS Exploration UK Limited internal policy, and therefore the directors have no fiduciary authority to authorize or advance their complaint in a foreign jurisdiction.  PGS Exploration UK Limited directors are abusing their positions and are in breach of their fiduciary duty.  In doing this, PGS Exploration UK Limited directors have also authorized the illegal use of PGS Exploration UK Limited resources.

Two claims of criminal defamation have been initiated against me in Thailand by a Thai lawyer whom has been given power of attorney by the PGS Exploration UK Limited current directors and former secretary.  The Thai lawyer has no knowledge of the veracity of my public disclosures.  None of the directors reside, nor have professional interests, in Thailand.  All of the public disclosure has been made in the English language and has been intended for PGS Exploration UK Limited directors and agents, as well as the Petroleum Geo-Services board of director’s members and executives.

The first claim made against me in Thai criminal court was forwarded by the current PGS Exploration UK Limited directors: Rune Olav Pedersen, Gottfred Langseth, and Christin Steen-Nilsen.  The second claim has been made by former PGS Exploration UK Limited secretary, Carl Richards, who resigned 25 May 2018.  The initial mediation court date in Bangkok, Thailand is scheduled for 29 October 2018, with a follow-up proceeding scheduled on 12 November 2018, in Chiang Rai, Thailand, depending on the outcome of the 29 October 2018 proceeding.   I reside in Chiang Rai, Thailand, with my family.  PGS Exploration UK Limited could have scheduled the first hearing in Chiang Rai, Thailand.

I believe that the proceeding scheduled in Bangkok, Thailand is an intentional attempt by PGS Exploration UK Limited to further harass and bully a whistleblower and harm the health and wellbeing of me and my family to the greatest extent possible.  PGS Exploration UK Limited and Carl Richards are being as mean, vindictive, and unethical as possible to try and quiet my public disclosure.  They have casts aside their contractual obligations to abide by the Petroleum Geo-Services ASA Core Values, PGS Exploration UK Limited internal policies, and their commitments to principles of the UN Global Compact to persecute me and my family.  It is a selfish and repugnant abuse of position and abrogation of their fiduciary duties.

Most of the public disclosures referenced within these claims were produced while Carl Richards was acting as PGS Exploration UK Limited secretary.  The public disclosures relate directly to the performance (or malpractice) of his fiduciary duties.  The Thai lawyer was provided with my personal passport data, home address, and e-mail address by Petroleum Geo-Services ASA, Data Protection Officer (DPO).  This personal private data had been provided to the Petroleum Geo-Services ASA, DPO in relation to a recent subject access request citing the General Data Protection Requirement (GDPR).  I believe that the use of my personal subject data to launch a claim outside the authority of the director’s legal fiduciary duty is a violation of my human rights and the GDPR.  Providing my personal data to Carl Richards, as a private person, is an even more egregious violation of my human rights.

I am currently disputing the propriety of PGS Exploration UK Limited and Petroleum Geo-Services ASA processing of my personal data and have been corresponding with the UK Information Commissioner’s Office (ICO).  PGS Exploration UK Limited directors and legal counsel have been included in these communications.  Much of the public disclosure has been in regard to my belief, supported by e-mail and other documented evidence, that PGS Exploration UK Limited human resources and legal counsel have knowingly created and processed non-compliant and illegal personal data about me.  This fake data was used to advance an illegally proffered settlement agreement contract used to terminate my employment.

ICO has been aware of my disagreement with the personal data PGS Exploration UK Limited is processing in my name for some time.  I also raised these concerns with UK ActionFraud 24 August 2015, and have periodically updated this complaint.  In 2016, I submitted several complaints to Petroleum Geo-Services ASA legal compliance.  This followed numerous complaints made through the Petroleum Geo-Services ASA LinkedIn™ social media comment space.  Most queries were not answered.  Petroleum Geo-Services ASA contends there was an investigation.  However, Petroleum Geo-Services ASA refuses to share their investigation report.  I do not believe that there was a valid investigation and that Petroleum Geo-Services ASA legal compliance has been directly involved in the alleged illegal acts.  I also submitted a report to the UK Serious Fraud Office in 2017.  PGS Exploration UK Limited and Petroleum Geo-Services ASA were made aware of these claims prior to their launching their Thai claim.

Most of the public disclosures regard PGS Exploration UK Limited director’s violations of English contractual and employment law and internal policy.  This includes, but is not limited to, the UK Data Protection Act 1998, and now the General Data Protection Requirement , the Companies Act 2006, the Equality Act 2006, the Fraud Act 2006, the Protection from Harassment Act 1997, and of course the Public Interest Disclosure Act.  The Thai court system is not the appropriate legal venue to adjudicate matters of English law.  PGS Exploration UK Limited is misrepresenting their claims as though their claims are truthful and not disputed.  The irony is that PGS Exploration UK Limited and Carl Richards have refused multiple requests to demonstrate that they are processing legal and compliant data derived from legal and compliant processes.  In other words, they refuse to prove that they have behaved legally in accordance to the laws of England and PGS Exploration UK Limited internal policy.  It should be clear that there must be nefarious motivations for PGS Exploration UK Limited directors to exploit the Thai criminal justice system.

PGS Exploration UK Limited within a 16 July 2018 e-mail response to a subject access request citing the General Data Protection Requirement remained committed to not clarifying issues or answering questions thoughtfully brought forth originally by a subject access request submitted in 2014 citing the UK Data Protection Act 1998.  PGS Exploration UK Limited states in their response to my subject access request:

Excerpts from the 16 July 2018 PGS Exploration UK Limited response to my 2018 GDPR subject access request

We have determined that the applicable law allows us to deny your request on the basis that processing of your personal data, if any, that may have occurred since your previous request on 10 October 2014 (the “2014 SAR”) would have only been performed in order to seek privileged legal advice in respect to your various direct and indirect communication with or about PGS and/or its employees.  Accordingly, we are denying your request under Data Protection Act 2018, Schedule 2, paragraph 19(a).

(…)

You should also note that under the terms of the settlement agreement between you and PGS dated 5 December 2013 (the “Settlement Agreement”) you agreed not to further pursue your grievance or any analogous or substantively similar or other grievance against PGS and that PGS, nor any other company in the PGS group, shall have any further obligations to you in respect of such grievances.

(…)

You further agreed not to divulge confidential information or the existence or terms of the Settlement Agreement, nor to make or publish any statement that directly or indirectly disparages, is harmful to or damages the reputation of PGS or any Related Party of PGS.

(…)

PGS reserve its rights to enforce the terms of the Settlement Agreement in respect to any breaches by you of the Settlement Agreement.

(…)

Bluntly, I have not regarded the referenced settlement agreement contract as a valid legal instrument for some time.  My public disclosure has stated this in many different publications.  My public disclosure has also stated that I regard my public disclosure as protected, or that I am a whistleblower.  My claims of director and executive criminal conduct were first publicly published in 2015 through the LinkedIn™ Pulse publishing venue.  This would have constituted a breach in a legal settlement contract agreement.  PGS Exploration UK Limited made similar threats to me following my complaints regarding the data being processed in my name within a 22 December 2014 correspondence.  Within the 22 December 2014 letter, PGS Exploration UK Limited states that they will not alter or remove any of the data which I identified as inaccurate and non-compliant.

At the same time, however, PGS Exploration UK Limited, did state that they would add one of my complaint e-mails (5 December 2014) into my professional personnel file.  So, PGS Exploration UK Limited did not refuse to alter my personal data.  What they did was place accurate data into the personnel file after inaccurate personal data was used to process the settlement contract agreement.  This challenges the legality of the settlement contract agreement, in my view.  Why would PGS Exploration UK Limited agree to alter my personnel file data with inaccurate data?  There are many other compliance issues raised within this 22 December 2014 correspondence which PGS Exploration UK Limited refuses to clarify.  I began publicly publishing my complaints and frustrations about these matters because PGS Exploration UK Limited and Petroleum Geo-Services ASA refuse to answer my reasonable questions.  Recently, I have copied ICO caseworkers on e-mail communications with PGS Exploration UK Limited and Petroleum Geo-Services ASA, with regard to the latest response to my subject access request so they can witness firsthand the irresponsible actions of these data controllers.

According to a confusing 22 December 2014 email written to me requesting that I stop my questions, PGS Exploration UK Limited states that they do not even process the 20 September 2013 grievance document within my professional personnel file.  So, exactly what will be considered similar to it?  I believe that the 20 September 2013 grievance which identified manager misconduct, policy and contract breaches, and breaches in UK employment and contract law was also whistleblowing.  Many of my queries have been in regard to the 22 December 2014 email which has opened many questions.  I believe that the referred settlement contract agreement was proffered illegally to terminate my employment without following my legally guaranteed process of grievance.  Termination for whistleblowing is automatically an unfair dismissal.

With regard to PGS Exploration UK Limited’s alleged violations of internal policy and the UK Public Interest Disclosure Act through initiating defamation claims in Thailand, reference the PGS Exploration UK Limited Policy Handbook (2013):

2.9 Confidentiality                                    

During the course of their employment, each member of staff will have access to and become aware of information which is confidential to the Company. Without prejudice to his or her common law duties, each member of staff undertakes that he/she will not, save in the proper performance of his duties, make use of, or disclose to any person, (including for the avoidance of doubt any competitors of the Company), any of the trade secrets or other confidential information of or relating to the Company, or any user of the Company’s services or any company, organization or business with which the Company is involved in any kind of business venture or partnership, or any other information concerning the business of the Company which he/she may have received or obtained in confidence while in the service of the Company. Each member of staff will use his/her best endeavors to prevent the unauthorized publication or disclosure of any such trade secrets or confidential information.

This restriction shall continue to apply after the termination of a member of staff’s employment without limit in point of time but, both during employment and after its termination, shall cease to apply to information ordered to be disclosed by a court or tribunal of competent jurisdiction or otherwise required to be disclosed by law or to information which becomes available to the public generally (other than by reason of the member of staff breaching this confidentiality obligation).

Nothing in this paragraph 2.9 will prevent a member of staff making a “protected disclosure” within the meaning of the Public Interest Disclosure Act 1998 where they are lawfully entitled to do so.

For a disclosure to be protected by the Act’s provisions it must relate to matters that ‘qualify’ for protection under the Act. Qualifying disclosures are disclosures which the worker reasonably believes tends to show that one or more of the following matters is either happening now, took place in the past, or is likely to happen in the future:

  • a criminal offence
  • the breach of a legal obligation
  • a miscarriage of justice
  • a danger to the health and safety of any individual
  • damage to the environment
  • deliberate concealment of information tending to show any of the above five matters

A qualifying disclosure to the commission will be a ‘protected’ disclosure provided the worker:

  • makes the disclosure in good faith
  • reasonably believes that the relevant failure relates to ‘the proper administration of charities and funds given, or held, for charitable purposes’
  • reasonably believes that the information disclosed and any allegation contained in it are substantially true

I have submitted several complaints to UK and Norwegian bodies to no effect.  I am very certain about the integrity of the documentation being processed within my PGS Exploration UK Limited professional personnel file.  None of the documents which I requested removed bare a counter signature and contain factually incorrect data, most notably a meeting date of 11 September 2013 that is referenced in two documents.  The 11 September 2013 meeting never happened.  The 11 September 2013 meeting was rescheduled for 20 September 2013, the day on which I submitted the referenced formal grievance.  The 20 September 2013 grievance document is specifically referenced in the settlement contract agreement, as well as the 22 December 2014 correspondence from PGS Exploration UK Limited, and more recently in the 16 July 2018 correspondence from PGS Exploration UK Limited.  However, it is not mentioned in the body of documentation contents of my personnel file and, as stated by PGS Exploration UK Limited, is not being processed currently as part of my personnel file.

An occupational health nurse report requested by the manager of human resources submitted to PGS Exploration UK Limited 16 November 2013 also mentions the grievance document, as well as reports on my personal health issues and stress experienced in the workplace.  PGS Exploration UK Limited does not process this health report which they requested and also did not follow policy guidelines regarding employee stress.  This endangered my own health and wellbeing, as well as that of my family.  PGS Exploration UK Limited has suppressed and destroyed all personal data related to the 20 September 2013 grievance document and supplanted non-compliant fake data supporting a defamatory performance based termination.   I had been led to believe that the settlement contract agreement was with regard to the substance mentioned within the 20 September grievance document.  PGS Exploration UK Limited on 15 July 2013 also did not report any performance issues to UK Border Agency for the renewal of my Tier 2 shortage occupation list visa, and those for my dependent family members.  Clarification on these issues is what PGS Exploration UK Limited has been withholding which I believe constitutes the deliberate concealment of information tending to show illegal and non-compliant acts.

PGS Exploration UK Limited directors and Carl Richards are expediting their claims in Thailand through subversive tactics which do not correlate to PGS Core Value.  They collective, including the Thai lawyer, stalked me by misusing my personal data.  None of the directors had formally contacted me and identified themselves and their concerns prior to launching their claims in Thailand.  The Thai lawyer also never confirmed her identification and credentials in previous communications which regarded a potential claim by Carl Richards.  I asked the Thai lawyer many questions, stated that I regarded my public disclosures as protected whistleblowing.  Further, I rejected claims made by Carl Richards as a private person because my public disclosures have always been in regard to his professional capacity as PGS Exploration UK Limited Head of Legal and secretary.  I had just departed Thailand when I received an e-mail with the court proceeding information documents written in the Thai language attached.  I was not in Thailand when the court claim by PGS Exploration UK Limited directors was delivered.

I had never received any communication from PGS Exploration UK Limited directors regarding my public disclosures prior to this claim being delivered in my absence.  The Thai lawyer had withheld information that she was also acting on the behalf of PGS Exploration UK Limited directors in previous communications.  Had she revealed this, I of course would have been more receptive to dialogue, just as I would have if Carl Richards was representing himself as secretary.  Carl Richards’ complaint, as a private person, was actually the second complaint.  It was received weeks after the court documents were delivered by e-mail.  I believe this behavior has been, at the very least, inconsiderate, irresponsible, and unprofessional.  It seems to transgress the actions of their true fiduciary duties.  They should have behaved differently and used better judgment.  PGS Exploration UK Limited directors’ actions have been clandestine and purposefully harassing.

In specific regard to the criminal defamation claims made in Thailand, most all of the referenced published content in the complaints pre-dates the 16 July 2018 correspondence received from PGS Exploration UK Limited in response to my subject access request.  The 16 July 2018 correspondence cites no specific content which even breaches the terms of the settlement contract agreement.  However, they warn me that the confidentiality nondisclosure conditions are still in effect.  However, in September 2018, the content reaches the level of criminal defamation in Thailand?  How is this possible?  Much of my public disclosure has warned Petroleum Geo-Services ASA and PGS Exploration UK Limited that they should be more proactive in addressing the online content published because it is harmful to their reputation.  Three-years later, Petroleum Geo-Services ASA and PGS Exploration UK Limited wakes up and blames their criminal negligence on me – in Thailand?  Unless PGS Exploration UK Limited can confirm the legality of the processes and documents that support the settlement contract agreement they are making fraudulent misrepresentations within their 22 December 2014 and 16 July 2018 responses to the subject access requests.

The fact that PGS Exploration UK Limited is not acting on the warnings given through their responses to me subject access requests to pursue breaches of the settlement contract agreement should be telling.  No claim of non-disparagement in England, but criminal defamation in Thailand?  Whatever damage has been suffered is a product of their collective fiduciary negligence.  To that end, only I have lost my job and livelihood while Pedersen has ascended from Petroleum Geo-Services ASA General Counsel to President and CEO.

In light of the recent aggressive actions taken by PGS Exploration UK Limited directors and former secretary in Thailand, there needs to be an equally aggressive investigation conducted in England.  I really need some consideration.  I am a victim of Petroleum Geo-Services ASA and PGS Exploration UK Limited abuse.  As a foreigner, I have always been more vulnerable.   Petroleum Geo-Services ASA has had to disregard published values and policy to pursue their vindictive hunt to destroy a whistleblower who did nothing wrong.  I have been the only one advancing Petroleum Geo-Services ASA Core Values and reputational interests.

I need help – NOW.

Best regards,

Steven D. Kalavity

###

Letter to UK Companies House and Carl Richards, former PGS Exploration UK Limited Secretary (1 October 2018)

RE:  PGS Exploration UK Limited – Director and Secretary Fiduciary Negligence

ATTN:

Companies House

UK  Information Commissioner’s Office Caseworker(s) [RFA0XXX327]

CC:

Carl Richards, former secretary PGS Exploration (UK) Limited

Rune Olav Pedersen, PGS Exploration (UK) Limited (PGSUK) Director

Gottfred Langseth, PGS Exploration (UK) Limited (PGSUK) Director

Christin Steen-Nilson, PGS Exploration (UK) Limited (PGSUK) Director (no e-mail)

Gareth Jones, PGS Exploration (UK) Limited Human Resources Manager

Daphne Bjerke, Petroleum Geo-Services ASA (PGS) Data Protection Officer

John Francas, PGS Exploration (UK) Limited (PGSUK) Head of Legal

Lars Mysen, Petroleum Geo-Services ASA (PGS) General Counsel

Dear Companies House,

My name is Steven D. Kalavity.  I am a citizen of the United States of America (USA).  I currently live in Chiangrai, Thailand on visa with my Thai wife and three Thai – American children.

On 29-Oct-2018, I am scheduled to attend a hearing in Thai Court for claims made by Carl Richards, as a private person.  However, Carl Richards is the former PGS Exploration UK Limited secretary and Head of Legal.  Carl Richards is launching his claim on behalf of himself because he believes his reputation in Thailand has been damaged to a criminal level.  I have informed Carl Richards, as well as PGS Exploration UK Limited directors, that I regard my publications as whistle blowing.   I have always wanted and accepted comments that would improve the published content.  Carl Richards has never provided any.  Therefore, how can there be such a claims made in Thailand by fiduciaries of an English company that were the targets of these criticisms?

Carl Richards has no professional credentials in Thailand that I know about and I have certainly never published anything about it.  Carl Richards believes that he has been defamed to a criminal level through the publishing of evidence based articles criticizing his professional performance as PGS Exploration UK Limited secretary.  Yet, these same criticisms are not regarded as a breach of the non-disparagement clauses within a contract governed by the laws of England which Carl Richards reviewed and approved.  It seems that Carl Richards is misrepresenting his own integrity through advancing this claim in Thailand.

The online publications, which Carl Richards believes are damaging to his reputation, describe real events which occurred while I worked with PGS Exploration UK Limited in England on a company sponsored Tier 2 visa between 26 September 2010 and 31 December 2013.  The blog post articles, and accompanying image files, have been published while I have resided in both Thailand and the USA.  I am not a citizen of England, and neither is my wife.  The only Thai nationals mentioned within the articles are my wife and children, because they have been greatly impacted by these events and are victims of his alleged professional malpractice.  This claim filed by Carl Richards has distressed my family even more, and is a continuation of the concerted effort to destroy me and my family.

The articles are written in the English language, although certain articles have been translated to Norwegian.  The blog post articles and accompanying image files describe people, events, and actions by executives of Norwegian parent company, Petroleum Geo-Services and PGS Exploration UK Limited, which occurred while I was employed as a foreign worker in England.  Carl Richards was Head of Legal for PGS Exploration UK Limited for much of the time I worked in England.  However, Carl Richards became PGS Exploration UK Limited secretary 13 September 2013, at just the point when my dispute with PGS Exploration UK Limited began to have legal ramifications.

I believe that I am the victim of crimes and that my human rights were violated while employed with PGS Exploration UK Limited.  Carl Richards oversaw my termination from employment from PGS Exploration UK Limited.  My employment terminated through a settlement contract agreement.  I believe that this is an illegal contract.  I also believe that forged instruments were created to support the illegal contract proffered as a false pretense for termination.  These beliefs are reinforced by documented evidence, and further by these actions taken by Carl Richards in the Thai legal system.

I have complained vigorously to the UK Information Commissioner’s Office regarding the integrity of the data which PGS Exploration UK Limited was processing in my name.  I implored caseworkers to conduct an investigation to compel PGS Exploration UK Limited to authenticate the documents being processed as my personal data.  I first reported these crimes in August 2015 to UK ActionFraud (police).  I have also submitted a report to UK Serious Fraud Office.  For over three years, all that I have ever asked for is an impartial third-party investigation into my claims.

My postings relate to Carl Richards’ obligations while he was PGS Exploration UK Limited secretary.  Fiduciary duty is not like a coat that is worn when the weather changes.  Fiduciary duty is a legal responsibility.  In Carl Richards’ case, these obligations were under the Laws of England.  Carl Richards was especially obligated to uphold these responsibilities from 13-Sep-2013 to 25-May-2018.  Carl Richards was still PGS Exploration UK Limited secretary when he first contacted me through a private and unverified e-mail account when he informed of his intended claims in Thailand.

As a fiduciary, his responsibility is to the principal, PGS Exploration UK Limited.  The fact that Carl Richards brought these claims to defend his own character apart from his professional credentials is stunning to me.  I have been publishing content critical of PGS Exploration UK Limited that may have impacted the reputation of the company.  The exception to the contractual mutual non-disparagement clauses is whistle blowing.   A fiduciary duty under the UK Companies Act 2006 is to protect the reputation of PGS Exploration UK Limited, not just theirs.  Fiduciaries should also be supportive of whistle blowing.

All of my postings are relevant to this period of time where Carl Richards and PGS Exploration UK Limited directors were in positions to influence decisions and actions which significantly impacted me.  PGS Exploration UK Limited directors, and other named employees, have had multiple opportunities, as well as the resources, to present their defenses.   Their inaction has significantly impacted the well-being of my family.  Carl Richards, as PGS Exploration UK Limited secretary, has never refuted anything written or posted by me.  In fact, not one individual mentioned within my articles has ever commented on, or asked that I cease publishing, my online blog articles or image files prior to Carl Richard sending an e-mail to me from a private and unverified account.

I would not have published anything online if Carl Richards, as an expert on contract agreements, would answer my simple and reasonable questions and concerns.  Is the settlement contract agreement that was used to terminate my employment from PGS Exploration UK Limited a legal instrument?  Will you authenticate as legal and compliant both the processes and documents that support the legal settlement contract agreement?  These are simple questions for an expert to answer.  But, Carl Richards has refused to answer such simple questions which are the basis behind all of my publications.

Obviously, I do not believe the settlement contract agreement used to terminate my employment from PGS Exploration UK Limited is a legal instrument.  I believe that I was terminated from my position with PGS Exploration UK Limited for whistle blowing.  I am no expert on English contracts.  But, I was fully aware of the events that actually happened at the time.  What I do know, with absolute certainty, is that the documents being processed within my PGS Exploration UK Limited professional personnel file are inaccurate and do not meet any normal legal or compliant standard.  Expert Carl Richards should be able to quickly resolve these concerns.

Pertinent documents do not bare my counter signature and are factually incorrect.  I believe that these documents were created and processed to support the settlement contract agreement that terminated my employment under false pretenses.  An initial settlement contract agreement was proffered to me to terminate the grievance procedure which I had initiated.  Under the laws of England, and under my original contract of employment with PGS Exploration UK Limited, employees have the right to file a grievance and if the grievance procedure is included within the employment contract, employers are obligated to follow the prescribed grievance procedures; otherwise it would be a breach of contract.

Why was the settlement contract agreement proffered to me before completing the grievance procedures outlined within the PGS Exploration UK Limited Handbook?  My grievance cited bullying and harassment, discrimination, negligence, breach of duty of care contractual responsibilities and breach of contractual mutual trust and confidence.  My grievance exposed management misconduct, abuse of position and non-compliant workplace practices.  I believe these concerns reached the level of whistle blowing.  As PGS Exploration UK Limited secretary, Carl Richards had assumed the legal responsibility to ensure that my grievance was handled properly and legally.  My blog post articles have simply asked for proof of this.

I have regarded my blog post articles as therapy for the workplace abuses facilitated by Carl Richards.  The grievance which was submitted described the health impacts of workplace bullying and harassment on targets and organizations.  During the settlement contract agreement negotiations, I felt very distressed.  I took five consecutive sick leave days off from my work.  The human resources manager and my first line supervisor, both of whom were subjects identified as workplace bullies within my grievance document, requested that I see an occupational health nurse.  I did see the occupational health nurse.  I explained to her what was going on with me in the workplace.

The occupational health nurse provided a preliminary report to me and I had requested a copy of the final report.  Carl Richards never intervened at this point either, even though the workplace conditions seemed to be impacting my health.  Employee stress is covered within the PGS Exploration UK Limited Handbook.  Carl Richards should have been aware of my appointment with the occupational health nurse.  The occupational health nurse noted increased stress levels and recommended a follow-up evaluation.  However, I never received this report at the time and never was evaluated again by the nurse.  This intentioned action placed the health and safety of me and my family at risk.

Bullying is a serious health issue in the workplace and a risk factor for anxiety, depression and suicide.  Bullying is often referred to as psychological harassment or violence.  One type of anxiety is complex post-traumatic stress disorder (C-PTSD).  Symptoms of C-PTSD may include flashbacks, irritability, reckless behavior, avoiding reminders of the traumatic event, feeling numb, memory problems, guilt, difficulty trusting others, and anger.  Carl Richards oversaw my being denied health care while I was a vulnerable foreign worker of PGS Exploration UK Limited.

I have always regarded my online publishing as therapy.  C-PSTD would also explain the escalation of anger in my online publications.  There is pressure for targets of workplace bullying to be heard after their abuse.  Bullies and harassers will intentionally ignore their targets.  When bullies and harassers ignore their targets, it gives them control of the situation, and a power over the target.  This increases the trauma and stress of the target.  In my case of gang-bullying, many people are directly implicated in the creation and processing of fake data that was used to terminate me from employment with PGS Exploration UK Limited.

Through their collective silence, PGS Exploration UK Limited or Petroleum Geo-Services ASA have been defaming and damaging me.  They have continued their bullying and harassment.  Their collective refusal to prove the legality of the settlement contract agreement that terminated my employment, along with the processes and documents that support the settlement contract agreement, denies me the truthful narrative.  A settlement contract agreement used to terminate an employee for performance reasons is fundamentally different than settling a whistle blowing and workplace harassment claim for illegal workplace practices.

Ignoring someone, or giving them the silent treatment, is one of the most used destructive manipulation tactics of manipulative people.  When multiple actors participate it is gaslighting.  It is very distressing and destructive to the targets psychological health and well-being.  It drives victims crazy.  Multiple actors were involved in processing knowingly false and defamatory personal data about me.  I believe that my legal adviser for the settlement contract agreement was complicit, as e-mail communications between him and me do not corroborate the data which PGS Exploration UK Limited is processing as my personal data.  My former legal adviser similarly remains silent, as does the legal adviser that represented PGS Exploration UK Limited during settlement contract agreement negotiations.

I have been publishing content online critical of personal data controllers Norwegian parent company Petroleum Geo-Services and PGS Exploration UK Limited since 3 July 2015.  On 22 December 2014, PGS Exploration UK Limited explicitly threatened legal action if I did not accept their processing knowingly false and inaccurate personal data about me.   I knew that something very wrong had happened to me after receiving that letter.  However, no director or secretary ever contacted me following the initial 3 July 2015 online publication.  Of course, they never invoked the non-disparagement clauses or demonstrated that their actions regarding my termination from employment had been legal and compliant either.  I was ignored.

Carl Richards and PGS Exploration UK Limited have made arbitrary and capricious judgments as to what constitutes disparagement, defamation, or a breach in the settlement contract agreement terms and conditions.  If PGS Exploration UK Limited or Petroleum Geo-Services ASA had published similar critical content about me online, I would have pursued the matter referencing the settlement contract agreement non-disparagement clauses governed by the laws of England.  As long as PGS Exploration UK Limited treat the settlement contract agreement as a legal instrument, there is little that I can do.  PGS Exploration UK Limited’s silence and inaction since 3 July 2015 is fiduciary negligence, in my view.

I published more issues of concern about the settlement contract agreement between me and PGS Exploration UK Limited online the LinkedIn™ platform, 6 September 2015 and 20 September 2015.  These articles called for the resignation of the Petroleum Geo-Services ASA CEO and President.  The 6 September 2015 article was read by many people, according the platform metrics.  In a 10 October 2015 article, I called for expulsion of the Petroleum Geo-Services ASA CEO and President, and other employees, from the professional organization because I believed that these individuals had breached the ethical standards of the organization.  I named several PGS Exploration UK Limited and Petroleum Geo-Services ASA employees within these articles and never once received a comment or rebuke from Carl Richards or PGS Exploration UK Limited directors.  Why?

What was the intention of the 22 December 2014 letter, which threatened litigation if I continued to advance my concerns about the basis and legality of my termination from employment, if PGS Exploration UK Limited directors accepted these publications with no claim of settlement contract agreement breach in the non-disparagement clauses?  Within the 20 September 2015 article, I presented evidence to support my claims.  The presented e-mail and other document evidence showed that my personnel file documents were inaccurate and non-compliant documents.  Neither Carl Richards, nor PGS Exploration UK Limited directors, acted concerned or tried to contact me.

In 2016, I submitted a complaint report to the Petroleum Geo-Services ASA Compliance Hotline.  The response from the Compliance Hotline stated that there was an investigation and no fraud was detected.  I requested a copy of their investigation report.  Petroleum Geo-Services ASA refuses to provide the report or how the investigation was carried out.  I submitted several more complaints to the Petroleum Geo-Services ASA Compliance Hotline and have never received a response.  I continued writing and publishing blog post articles critical of PGS Exploration UK Limited and Petroleum Geo-Services ASA.  Still, no one ever contacted me or asked me to stop.

In 2017, I updated the 2015 ActionFraud report and submitted another report to the UK Serious Fraud Office to include the involved legal advisers which formed the settlement contract agreement.  I have reported Carl Richards and the involved legal advisers to professional law organizations in England that regulate legal professionals.  Carl Richards, and PGS Exploration UK Limited directors, have also been reported to the UK Companies House with regard to their performance in fulfilling fiduciary duties for PGS Exploration UK Limited, as described in the UK Companies Act 2006.

In 2017, I published and Open Letter directed to the Petroleum Geo-Services ASA Board of Directors.  There has been no acknowledgement.  In 2018, I have already written another Open Letter to the new Petroleum Geo-Services ASA data protection officer.  I have also posted an Open Letter to PGS Exploration UK Limited Head of Legal and another one to the PGS Exploration UK Limited human resources manager regarding the same base issues.  No replies for any of them.  There is only the continued silence and ignoring of a whistle blower.

I believe that the claims made against me by Carl Richards for this Thai legal proceeding are without merit for multiple reasons.  Carl Richards is portraying himself as a victim of unwarranted on-line criticism.  However, no one in any official capacity, especially one of PGS Exploration UK Limited director’s, has ever even tried to contact me before Carl Richards.  Their problem is a product of their own creation.  People in authority routinely abuse their positions and ignore their victims to maintain their power over them, and to demoralize, demean and destroy them.  I believe that this is happening to me now.

The silence and inaction by PGS Exploration UK Limited directors constitutes fiduciary negligence as much as it is a weapon used by manipulative people.  I have used social media to voice serious concerns, because Carl Richards, and other PGS Exploration UK Limited directors, do not respond to the many serious allegations that I have made.  Carl Richards is circumventing his fiduciary duties under the laws of England by launching his claim in Thailand.  Carl Richards and PGS Exploration UK Limited directors have also neglected their legal fiduciary duties under the laws of England by allowing events to rise to this level.

Carl Richards has not only had multiple opportunities, but also a fiduciary duty, to address the many valid concerns about his own, or PGS Exploration UK Limited stakeholders, reputations, as well as conduct, before now.  These duties are described within the UK Companies Act 2006.  Carl Richards has also decided to escalate this dispute to the criminal courts of Thailand as a first option and not as a last resort, even though Carl Richards is licensed to practice law in England.  This has taken a tremendous toll on my Thai family.

The best solution, it seems, should have been to exchange e-mails.  If that failed, then the mutual non-disparagement clauses included within the settlement contract agreement which terminated our employment relationship should have been discussed.  This settlement contract agreement is governed by the laws of England.  I have written multiple e-mails, made phone calls, and finally posted directed content online to get the attention of PGS Exploration UK Limited and Petroleum Geo-Services ASA since 3 July 2015.  They never respond privately, and so I have felt the need to go public with my concerns.

It has been my reputation which has been damaged because PGS Exploration UK Limited and Petroleum Geo-Services ASA agents refuse to engage me directly and responsibly to address my valid concerns.  It is this lack of engagement which has frustrated me to escalate my complaints and try to get their attention.  In spite of this escalation, no official of PGS Exploration UK Limited has ever attempted to contact me directly or tried to address my complaints and allegations.  Collectively, PGS Exploration UK Limited and Petroleum Geo-Services have ignored my concerns for over three years of attempted engagement on my part.  I can prove my claims with evidence in an appropriate legal venue.  I have already done so through my online publications. 

It simply should not take over three years for PGS Exploration UK Limited and Petroleum Geo-Services ASA agents to prove that they did their jobs and followed the rules.  The fact that they refuse to answer simple questions shows that they are hiding something.  But, clearly, if my claims are true, and I believe that they are, PGS Exploration UK Limited and Petroleum Geo-Services ASA agents did not do their jobs or follow the rules.  In this case, it is clearly my family who are the victims of PGS Exploration UK Limited and Petroleum Geo-Services ASA agents not doing their jobs and following the rules.  This is what I believe has been published online with evidence to back my claims.

With regard to this proceeding, I received an e-mail from the private Google™ account of a person purporting to be Carl Richards.  This was the first and only complaint that I have ever received regarding my online content.  This e-mail cited some complaints over content which I have published on-line.  I responded briefly to this e-mail, but requested proof of identification before I would consider the complaints further.  I never received another e-mail from this address.

Later, I received another e-mail from a person purporting to be a Thai lawyer who was representing Carl Richards.  Similarly, I requested proof of legal credentials from this person, as well as proof that this person was truly a lawyer representing the Carl Richards who I had worked with in England at PGS Exploration UK Limited.  I never received a response or confirmation from this person either.  So, it was very surprising to me when I received the papers from the court in Thailand without ever receiving confirmation of identity or discussing the issues more fully.  I was actually travelling outside of Thailand when the documents were delivered.

I do not know why Carl Richards is solving this simple legal problem in Thailand.  I am not a citizen of England.  This problem likely would have never happened if I had been an English citizen.  I believe that PGS Exploration UK Limited engaged in their trickery because my family and I were all foreigners and so it would be easy for them to get away with their scheme.  The events written about in my blog articles occurred in England.  I am in Thailand because my wife and children are citizens of Thailand.  We have had a home in Chiangrai, Thailand since 2006.  During all of my oversea assignments, Thailand is where we returned to, and Thailand was my home of record for rotational offshore work assignments with Petroleum Geo-Services.

Carl Richards has been trying to destroy me professionally, psychologically, and financially since 2013.  I was a victim in England, and I am a victim now.  Carl Richards wants to destroy my Thai home and family.  Carl Richards must be held accountable.  Carl Richards, and PGS Exploration UK Limited, must confirm with evidence that the settlement contract agreement that terminated my employment is a legal instrument.  Carl Richards must confirm that the documents and processes that support the settlement contract agreement were also legal and compliant.  Carl Richards must do these things now, because it has always been his duty to do so.  It was his duty in England, and it remains his duty now.

Carl Richards is trying to bypass most every critical action and decision which has brought us to this point as though he had no control of the situation.  He feels that his reputation has been damaged.  Yet, Carl Richards has never defended his reputation through directly confronting the accusations which I have made in a timely manner.  The base accusations have remained much the same since the first 3 July 2015 publication.  The reason that I communicate publicly and online is because PGS Exploration UK Limited and Petroleum Geo-Services ASA agents do not respond to private e-mails or even comment on the online publications.

Every one of my publications critical of Petroleum Geo-Services ASA and PGS Exploration UK Limited has been a risk for me.  The settlement contract agreement contained mutual non-disparagement clauses prohibiting parties from criticizing each other.  They have had multiple opportunities to invoke these clauses over the past three years and have chosen not to do so.  Why is this?  This inaction further supports my assertion that the settlement contract agreement is an illegal instrument.  There are records that Carl Richards, along with his colleague assistant, reviewed and approved the use of this settlement contract agreement.  It has always been known to be an illegal instrument.

I am begging Companies House, Information Commissioner’s Office, and the police to investigate and compel PGS Exploration UK Limited to authenticate as legal and compliant the settlement contract agreement along with the processes and documents and processes that support it.  I should not have to beg for this.  I should have never had to file a fraud report as a foreign worker.  I should have never had to endure the health harming effects of a toxic workplace.  PGS Exploration UK Limited is literally trying to destroy me and my family – the victims of abuse.  I desperately need your help.

Best regards,

Steven D. Kalavity  

Open Letter to Board of Directors (18-Jun-2017)

Open Letter to Board of Directors

(18-Jun-2017)

Name of Company & Recipients Omitted

No Response Ever Received

ATTN:                                    Chairman of the Board of Directors

CC  Directors:                     Other Board of Directors Members

Chairman of the Board of Directors and Board of Directors Members:

  1. The <Norwegian Geo-Services Company> board of directors and several senior managers are corrupt and have behaved immorally and criminally to the detriment of the enterprise and its stakeholders.
  2. <Norwegian Geo-Services Company> board of directors and several senior managers, including compliance officers, need to be investigated thoroughly by a third-party for corruption and fraud.

I am writing this letter in order to reiterate directly and publicly my concerns regarding the direction and management of <Norwegian Geo-Services Company>

The <Norwegian Geo-Services Company> Board of Directors, <Norwegian Geo-Services Company> Executive Management, and several other senior managers have abrogated their legal agency responsibilities to the detriment of <Norwegian Geo-Services Company> stakeholders, competitors, the marine seismic service sector, as well as the greater oil and gas (O&G) industry.

As a general rule, given the choice, most would prefer not to do business with evil and dishonest moral degenerates.  Thus, the long-term business success and future of <Norwegian Geo-Services Company> is in jeopardy with the current board and executive composition of the enterprise.

Several articles have been written highlighting pointed allegations of director and manager malfeasance and corruption (Link to Page Listing Articles / Links has been removed).  Be forewarned that the recently announced resignation of the President and CEO of <Norwegian Geo-Services Company> will not stop such publications.  The objective is justice and so the board and any newly appointed executive will still be accountable for past transgressions.  At least the world-wide-web has a memory for truth and accountability.

The several pointed public allegations of <Norwegian Geo-Services Company> agent corruption have been made and they require and deserve a responsible public response and accountability.  An ethically directed and managed enterprise would not hesitate in the opportunity to vindicate and defend enterprise and agent decisions and reputations.  At the very least, it would be the respectable thing to do.  This is what pledged  <Norwegian Geo-Services Company> Core Values are all about.

It has been remarked that <Norwegian Geo-Services Company> non-response is a commercial decision.  But, directors and executives failing to defend their honor and take responsibility for decisions and actions is only self-serving.  It is the very definition of corruption.  Such decisions only benefit the corrupt and criminal agents/actors.  The unfortunate truth is that <Norwegian Geo-Services Company> is directed by the ethically bankrupt and self-serving.  Such indifference is a blemish on all professionals and a danger to all stakeholders.

It is never commercially beneficial for an organization to have a damaged reputation and to be toxically and corruptly directed and managed.  Such toxic organizations can never perform optimally.  This is a fact.  Therefore, commercial benefit to an organization can only be achieved through ethical and disciplined management guidance and practices.

The PGS board and management transgressions are specifically in reference to the responsibilities of PGS board members, which are set forth within the published Rules of Procedureclause 1.3, and clause 2.1:

Clause 1.3:

1.3 The Board is responsible for supervising the business activities of <Norwegian Geo-Services Company> . This includes controlling and implementing measures with the aim of ensuring that:

  • the CEO uses proper and effective management and control systems, including systems for risk management, which continuously provide a satisfactory overview of the Company’s risk exposure; the control functions work as intended and that the necessary measures are taken to reduce extraordinary risk exposure;
  • there exist satisfactory routines to ensure implementation and follow-up of principles and guidelines adopted by the Board in relation to ethical behavior, conformity to law, health, safety and working environment, and social responsibility;

Clause 2.1:

2.1 The CEO has responsibility for ensuring that the Board receives all the information it requires to fulfill its duties pursuant to Rule 1 above.

<Norwegian Geo-Services Company> Board and executive team continue to disregard and/or misrepresent their commitment to health, safety and the environment (HSE) to stakeholders and the broader marine geophysical service sector.  <Norwegian Geo-Services Company> broadcasts that their HSE performance is better than industry standard.

<Norwegian Geo-Services Company> destroys both the records and the employees who bring up HSE concerns.  Instead, <Norwegian Geo-Services Company> corrupt board and executives protect violators and intentionally deceive stakeholders.  <Norwegian Geo-Services Company> board and management actions show how absurd such laudatory HSE performance claims are and how dangerous such deception is to the geophysical service sector and the O&G industry.

<Norwegian Geo-Services Company> does not value real management nor leadership skills.  They ignore adherence to <Norwegian Geo-Services Company> Core Values and civil workplace behavior.  This is a significant long-term risk to <Norwegian Geo-Services Company> .  In fact, a litany of corrupt and nefarious behaviors are allowed to protect and buttress the corrupt and criminal acts of <Norwegian Geo-Services Company> board members and executives.

Apparently, the board and executive/senior management believe that legal and compliant behavior includes,

  • allowing managers to threaten, disparage and defame subordinate without basis
  • allow managers to abuse their positions, bypass policy, misrepresent and withhold information,  and obstruct legal rights of employees and to pervert the course of justice
  • not thoroughly and fairly investigating health and safety concerns
  • fabricate one-sided investigations
  • create false exculpatory evidence/documentation
  • destroy legitimate health and safety reports
  • destroy the actual complaint
  • create an entirely false narrative used to expel an employee under false pretenses
  • bribing or misleading employee counsel to affect desired (corrupt) outcome
  • lie to stakeholders
  • remain silent about any and all allegations that may impact the current board and management
  • provide false information to government agencies, such as UK Information Commissioner’s Office (ICO) and UK Border Agency

If these actions are compliant and legal, then <Norwegian Geo-Services Company> board and compliance team have a responsibility, based on the Rules of Procedure as well as the CEO Responsibility Letter, to inform all <Norwegian Geo-Services Company> stakeholders, including the geophysical service sector and O&G industry how this is so?  If all or some of these actions are non-compliant or illegal, the board has the responsibility to rectify the situation.  But, <Norwegian Geo-Services Company> board and managers remain silent.  The silence and obstruction simply does not satisfy either of these criteria.

It is fairly obvious that <Norwegian Geo-Services Company> has wrapped themselves up in an illegal veneer which makes their actions perhaps appear legal.  But, such threads of deceit are thin and so the entire fraud could unravel with just one truthful remark from management.  Corrupt agents of the board and management feel no legal obligation to really address the issues.  The irresponsible silence reveals both corruption and the many failed promises to stakeholders.  Corrupt agents are acting out of self-protection and not for the betterment and welfare of lawful stakeholders of <Norwegian Geo-Services Company> .

Corrupt <Norwegian Geo-Services Company> board and management declared war on me and my family, as well as all compliant stakeholders.  Corrupt <Norwegian Geo-Services Company> board and management back stab, lie, cheat and steal.  Then they retreat in silence when confronted directly.  Corrupt and cowardly!

Why would any honest board of directors protect and promote corrupt marine seismic industry dilettantes?  No honest and rule abiding board of directors would.

My former boss, was promoted two times during the three years that I was his bullied and harassed subordinate. As an American I was enthused about working for the sales team in England.  I was completely blind-sided by where I ended-up. So absent was <my boss’> ability to actually manage, behave honestly and with civility that corrupt <Norwegian Geo-Services Company> management had to help him and give him more misused power to abuse.  The only thing that seemed appropriate in his promotion was the removal of “manager” from his job title.  <my boss> had a plaque in his office bestowed upon him.  He was rewarded not for providing the best possible customer service, but for achieving the greatest profit margin on a contract.  In other words, <Norwegian Geo-Services Company> rewards those who deceive and negotiate the best short term gain for the corrupt and do not value honest long term business relationships.

<my boss> had threatened me that his boss, supported his mismanagement fully and it would be folly to complain.  Indeed, <my boss’ boss> not only supported nefarious acts of sabotage, cowardly lies (as evidenced in presented e-mails), and bullying by proxy of accepting his actions, he actively participated in the creation of fraudulent defamatory documents created to harm me professionally and personally.  Of course, such deeds are also rewarded by the corrupt and dishonest board and management.  <my boss’ boss> is highlighted as <Norwegian Geo-Services Company> anti-corruption champion within the annual, albeit bogus, <Norwegian Geo-Services Company> Responsibility Report.  Yes, bully and defraud an employee who makes a health and safety complaint and we will make you our champion (!) seems to be the message.  Pathetic.

However, so deceitful and corrupt is <my boss’ boss> board and management that even the <my boss’ boss> compliance team is involved with the deception and forgeries.  The SVP Human Resources and compliance team member signed a false instrument indicating there was some investigation into the complaint, as is required by law.  The forged memo referenced meetings that never happened and documents that never existed.  They don’t even reference the actual complaint!  Only signed by the SVP Human Resources Division EVP, both who received and processed a presented formal grievance, pretend the health and safety complaint was investigated and settled when it never was.   This seemed to meet the ethical and legal compliance standard of
<Norwegian Geo-Services Company> .   The <Norwegian Geo-Services Company> General Counsel, also on the compliance team, was promoted from SVP to EVP.  This punctuates a pattern of rewarding the most corrupt and dishonest at <Norwegian Geo-Services Company> into the top tiers.  This is characteristic of the most insecure and evil narcissistic-psychopathic temperaments.

My former co-worker and witness was also copied and included to have knowledge of all these events.  He knows that upper management harasses, bullies, and deceives.  He knows the facts and documents used and retained by
<Norwegian Geo-Services Company> are false and also recount a false self-serving narrative.  He knows upper management and the board of directors are liars and frauds.  I seems that he was also promoted to remain silent so that management would be able to continue to carry on the deception.  So sad to see your integrity collapse into corrupt cowardice, <witness>

The objective of these behaviors is the destruction of the target and the exhibition of exalted corrupt power.  It is a warning that there is no justice and no stopping the demonic canker and unjust tyranny of the empowered PGS criminal and corrupt agents.  The first consideration for compliance of internally governed enterprises is how the Rules of Procedure were followed and then how internal policy was adhered to.  Any derivative of corrupt processes can only have the appearance of propriety through the misuse of agency.  It is preposterous to assume that any by-product of such nefarious actions could indeed be legal.  It is only very complicated and expensive to unravel when the corrupt are uncooperative and conspire amongst themselves to escape accountability.  This is the behavior of criminals, isn’t it?

I know what the truth is and so does the board of directors and many senior executives. <Norwegian Geo-Services Company> board of directors and management remain silent for one reason and one reason only.  They are corrupt and have invested substantial shareholder valuein time and resources engaged in a campaign of non-compliant rule breaking to harm an employee revealing corruption and health and safety transgressions.  The <Norwegian Geo-Services Company> board of directors and management have misused <Norwegian Geo-Services Company> resources to protect these rule breakers and hide their incompetence and poor judgment.  The unethical behavior of the board and senior executives is both encouraged and withheld from most unwitting stakeholders and investors.  There will be a reckoning.  When the board of directors selects a new CEO and President a new writing campaign will begin. In the end, the truth can only hurt the corrupt.  And so explains clearly the silence of the <Norwegian Geo-Services Company> board of directors and senior executives.  When will the <Norwegian Geo-Services Company> board of directors find the courage to do the right thing their agency requires?

Still waiting,

Steven D. Kalavity

USA citizen, anti-bullying and anti-corruption advocate.

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Toward a New Horizon in the Marine Seismic Streamer Industry

WesternGeco Seismic Vessel Amazon Warrior

Toward a New Horizon in the Marine Seismic Streamer Industry

 Content Revised 13 November 2013 by Request of Company to Remove their Named Reference

This challenging commercial environment is clearly reflected in the financial statements of standalone acquisition players who are either at or close to bankruptcy, heavily burdened by weak cash flow and high debt….While these stand-alone acquisition players have no other choice than to stay in and fight on to avoid bankruptcy while hoping for a better future, we at Schlumberger do have a choice and we chose to exit the commoditized land and marine acquisition business. ~ Paal Kibsgaard, Schlumberger’s CEO, 19 January 2018 E&P article

Leaders keep their eyes on the horizon, not just on the bottom line. ~ Warren Bennis

I was in the process of preparing to write another blog article in anticipation of the release of Q4 2017 and full year financials from a conglomerate offshore market players when I learned of Schlumberger’s decision to exit the land and marine data acquisition business.  Schlumberger’s CEO, Paal Kibsgaard’s sober analysis of the seismic acquisition market was refreshing in its honesty and should resonate throughout the industry.  I began working in the marine seismic business in 1998 on board the M/V Western Atlas. I was lured by the 6-week rotation schedule that, I hoped, would allow me to travel and see the world.  (I saw the Gulf of Mexico with Western Atlas, but the industry has taken me around the globe.)  I worked for Western Atlas, an offspring of Western Geophysical.  Western Atlas merged with Baker Hughes later on, and then merged with Geco-Prakla to become WesternGeco (WG).  WG was subsequently absorbed by Schlumberger.  The marine seismic business has always been tumultuous.  WG was the arm of Schlumberger mostly identified with the marine and onshore seismic acquisition business, where they have occupied a forefront position.  WG introduced their two Amazon-class vessels into the fledgling market, Amazon Warrior (2014) and Amazon Conqueror  (2015).  In 2013, WG had introduced their high-technology IsoMetrix™ 4-component streamer commercially.  More recently, it was announced that the US Supreme Court would consider Schlumberger/WG’s claim of technology infringement.  Thus, in many ways, WG has left an indelible impression on the marine seismic acquisition market, regardless.  It will be interesting to learn how their resources and technology will be dispersed into the new market reality that will follow their exit.  In many ways, it is hard to conceive of such a market without WGs presence in acquisition.

The recent Q4 2017 vessel utilization numbers were published at the start of 2018 for two pure play marine seismic streamer vessel operators.  WG had operated several marine seismic streamer vessels prior to the mid-2014 crash in oil prices, but stacked many of them.  WG no longer publishes vessel utilization numbers, since WG is a relatively small component of Schlumberger.  Thus, it would have been difficult to gauge the health of the marine seismic acquisition sector through analyzing Schlumberger/WG anyhow.  CGG also reduced their fleet to become more diversified geoscience company.  CGG filed for bankruptcy and reorganized and now has much less presence in the marine seismic streamer acquisition market, as well.  Many of my blog article posts, which began in 2015, have concentrated on pure play marine seismic streamer company performance to understand the health of the deep water exploration and development sector.  Polarcus’ Q4 2017 vessel utilization was 68% and the other company listed 46%, and has further stated that they will reduce their seismic 3D streamer fleet from eight (8) to six (6) operating vessels.  Seismic streamer vessels are the data acquisition platforms and therefore the main revenue generators, or the revenue losers, for marine seismic exploration companies.  So, while we all must await the Q4 2017 and full year 2017 financials to be released, Q4 2017 cannot be a banner quarter for either of them, based on these already released vessel allocation numbers.  Schlumberger/WGs decision to exit the marine and onshore seismic acquisition markets punctuates that no robust resurgence in deep water exploration is anticipated.

On 12 January 2018, the price of oil edged over $70 USD/bbl for the first time in over three years.  This generated some excitement, but this news was obviously not viewed as a life-line for marine seismic service companies.  In previous blog posts, I mentioned that deep water exploration and development required a risk threshold of a minimum oil price of $70 USD/bbl.  Therefore, every dollar above that threshold would represent an opportunity for revenue generation.  However, marine seismic exploration players know that oil eking over such an arbitrary economic threshold is not going to create a bonanza of deep water exploration.  Every dollar over that arbitrary price may open up more money making opportunities for both license operators and exploration companies.  At the same time, every company has their own unique cost base dependent on their business model and objectives which dictates how their resources are managed.   This enterprise specific cost base is much different than any project related cost adjustments related to a seismic survey areas geology and geopolitics.  The $70 USD/bbl oil price threshold mostly speaks to market stability that supports minimal revenue generating opportunities.  The problem is that minimal revenue generating opportunities are not necessarily enough to pay off debt generated from new build programs and past lean quarters.  When businesses are growing, new assets and improvements are paid for not only by the revenue they generate, but also through the revenue generation of the older assets.  With so many vessels stacked, revenue has to now be generated through fewer opportunities.  At the same time, this reduced revenue flow has to pay for the fewer newer and more expensive vessels working for minimal profit.

You can have data without information, but you cannot have information without data. ~ Daniel Keys Moran

 

It doesn’t matter much where your company sits in its industry ecosystem, nor how vertically or horizontally integrated it is – what matters is its relative ‘share of customer value’ in the final product or solution, and its cost of producing that value. ~ Gary Hamel

Even before the crash in oil prices mid-2014, the marine seismic streamer market really had too many vessels in operation for the required survey work.  Because of this vessel over-capacity, many oil and gas (O&G) concession operators became more selective in terms of their requirements in vessel and equipment specifications.  For example, several operators would not allow a survey vessel older than twenty (20) years to be tendered in any data acquisition proposal unless such vessels were specially built for marine seismic streamer surveys.  O&G operators also had similar age requirements for support vessels.  These requirements recognized the underlying health and safety, as well as operational efficiency benefits delivered by purpose-built vessels.  However, such requirements are also indicative of operators having the ability to require high standards while also being able to reach their exploration objectives and seize opportunities with a sufficient number of vessels which could efficiently complete surveys affordably.  More in-sea instruments being deployed prompted development of improved streamer and source positioning control technologies, which also soon became a requirement for several tenders. 

O&G operators, through demanding more stringent vessel and equipment requirements, in certain respects, encouraged the building of newer and more efficient wide-tow capable vessels, as well as the development of supporting technologies.  As was also mentioned in previous posts, marine seismic streamer service companies having the ability to complete surveys in less time mostly benefits the operators of the survey area more than the seismic service provider.  Vessels sometimes need to re-survey areas for a variety of reasons related to unpredictable weather and currents.  When streamers and sources are not positioned correctly, the subsurface cannot be imaged correctly.  Data imaging is dependent on correctly discerning the position and geometry between the seismic source (air guns) and the receivers held within the streamer cables. Wide-tow capable vessels towing more streamers (sensors) created new issues in terms of acquiring the correct data.  A certain amount of in-fill, as it is referred to, was always anticipated and calculated into the bid tenders.  Of course, eliminating in-fill was beneficial to the service provider and operators in terms of time-savings in operating the survey vessel.  Especially, in a highly competitive vessel over-capacity market with low profit margins, the use of such technologies became imperative to be commercially successful.

It was recently broadcast (12 January 2018) that the US Supreme Court will consider the issue and ramifications of the unfair global use of intellectual property.  This case has to do with WGs Q-Marine™ streamer control devices and ION Geophysical (ION) infringement on the patented technology from their development and sale of DigiFin™ (4 patented technologies).  The question revolves around recovering $93 million USD from ION for foreign contracts.  ION contends that WG cannot recoup lost profits for the overseas use of ION’s products by ION’s customers, and that lost-profits can only be recouped from a direct competitor.  This will be an interesting decision and there are obviously certain merits to both sides, otherwise it would not be heard by the US Supreme Court.  I prepared marine seismic acquisition proposals for projects offshore the continent of Africa for a UK affiliate of a Norway based company.  This company developed a proprietary dual-sensor broadband capable streamer technology.  However, because operators wanted bidding on a level playing field, such innovative technology could not be bid in some cases until “broadband” was also an offering of competitors in the bidding process.  Operators resist requesting unique proprietary technologies because they are no longer a competitive bid.  So when operators are requiring streamer control capability, they are not intentionally requesting a proprietary technology.  Marine seismic service provider bids needed to offer Q-Marine™ or DigiFin™ capability within their bid proposals.  However, it was not necessarily regarded as the proprietary technology that won the bid, so much as an adjunct technology to meet the base operator specifications.  Operators actually need to also be aware of the specifications that they are requesting and what technologies are available to meet such requirements.

Every exit is an entry somewhere else. ~ Tom Stoppard

If you go long on seismic companies at this point you might want to ask yourself what Schlumberger’s management knows that you don’t?  ~ Jeremy Punnett, Stamford Maritime

In many respects, Schlumberger’s exit from marine and land seismic acquisition markets points to the deficiency in the current business model used.  While data is necessary in the search for resources, the burden of the cyclic nature of the market is placed mostly on the data acquisition service providers.  But, service providers are just that.  Operators define the services that they need or want.  Operators decide the age of vessels used and even the breadth of solutions tendered.  What Schlumberger has learned, as well as the other seismic acquisition service providers, is that there is a gap between what customers ask for and how much they are willing to pay for it:

Kibsgaard added that the company’s customers are not willing to “pay a premium for differentiated seismic measurement and surveys” and “clearly believe that generic technology and performance is sufficient.” This creates a low technical barrier for smaller players to enter the segment, which keeps demand in a chronic state of overcapacity, he said, adding the company’s seismic acquisition business cannot provide the desired full-cycle returns for Schlumberger or compete internally for funding. ~ 19 January 2018 E&P article

 

The current procurement process operators use to obtain services needs reformation and improvement.  New technologies and solutions are simply being created too rapidly for old and stale procurement models based on a apples-to-apples competitive bidding process.  What Kibsgaard is stating is what I learned tendering bids with a breakthrough technology waiting to be offered.  Service providers cannot reap the timely benefits from their out-of-the-box solutions, but have to wait for competitors to “catch-up.”   Only then, when the market is commoditized and when the only basis for award can be determined to be the final cost of an apple.  (I speak to this dilemma within my blog article, Upstream Exploration and the Paradox of Choice (10-May-2015).)  However, when the economics suits operators, such requirements can be relaxed or ignored.  If the technology has a lower-cost baseline, then, and only then, is the novel solution acceptable for consideration.

What does Schlumberger’s exit from the marine seismic acquisition market say about the markets future?  I do not know.  But, the WG fleet is composed of many seismic streamer purpose built vessels which they can divest from.  These vessels could enter the market at some point, in the same way that other stacked vessels could, potentially, when the market turns.  Perhaps WG will license and sell equipment, like their Q-Marine™ and maybe even IsoMetrix™?  In the near term for this low-cost commoditized market, companies introducing innovative technologies will be stressed even more.  The marine seismic acquisition business model is built around time-efficiently acquiring large swaths of (broad) band data from arrays of 12-16 8000 meter streamers (100 m separation) towed behind large purpose built vessels.  These vast amounts of data will be processed on super-computers.  Companies pioneering new solutions through committed research and development do not really occupy the low-end/low-cost spectrum of the marine seismic streamer acquisition market.  Currently, the majority of customers do occupy this space.  On the other hand, WGs exit could send high-end customers to seek such technologies from other seismic acquisition companies.  Will there be enough demand for wide-tow vessels towing only innovative broadband streamer technology?  Polarcus and Shearwater GeoServices (SG) will fight for the lower end, but new high capacity vessels entering the market will now be a threat for all pure-play players.  I still believe that the broadband streamer developer’s chartering of two high-capacity seismic streamer vessels following Dolphin Geophysical’s demise was because of the threat of wide-tow price competition.   Broadband acquisition is more operationally expensive.  Wide-tow is how to stay cost competitive with high-end equipment or innovative geometries.

The commoditized marine seismic streamer acquisition market will be a lowest-price wins game for the foreseeable future.  Clearly, WG/Schlumberger is betting on the added-value component of the market attached to raw data acquisition: data processing, imaging, and analysis.  WG does not see the money-making opportunities in acquiring high-end raw data.  It was somewhat surprising, as a former data processing geophysicist, to see a marine seismic data acquisition leader restructure-out their data imaging division.  Enhanced data processing and imaging is, of course, a huge value-added aspect of any proprietary streamer or data acquisition technology.  Some players made calculations and decisions about the market and waited until only recently to down size their operational marine seismic streamer vessel fleets, when other players, such as WG and CGG, did so in early 2015.  Being a pioneer means blazing your own course to follow.  There is obviously no single reason for Schlumberger exiting the onshore and offshore seismic acquisition market.  Recently, the Amazon Warrior halted acquisition due to protests from activists, such as Greenpeace, against the use of seismic air guns and their impact on marine life and cetaceans.  In the USA, the President Trump administration has relaxed restrictions for exploration and development offshore.  Many states and officials do not agree with these policies, and likewise, there are USA activists preparing to fight opening up their offshore waters, many adjacent to tourist laden beaches, to offshore O&G exploration and development.  A company the size of Schlumberger is obviously a big target for such protests.  And when the business unit at the forefront of the controversy is also not generating revenue, an exit from such market conditions is even easier to reconcile.  What is certain is that WGs exit from marine acquisition will impact the market in some measurable way.  It is time for a new business model for data acquisition services.  Perhaps WGs exit as a seismic acquisition service provider will force such a conversation sooner than later.

You change your business plan to anticipate and adapt to changes in the marketplace. ~ Jon Feltheimer

If we have data, let’s look at data. If all we have are opinions, let’s go with mine. ~ Jim Barksdale

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The Longer and Lower Wave of the Marine Seismic Streamer Market

The Longer and Lower Wave of the Marine Seismic Streamer Market

Content Revised 13 November 2013 by Request of Company to Remove their Named Reference

What is in store in 2018 for the Marine Seismic Streamer Market?

The industry has changed drastically over the last few years. The oil companies demand competitive and flexible solutions and the providers that can offer that in the most cost efficient way will capture market share. ~ Irene Waage Basili, CEO Shearwater GeoServices

Flexible capacity is the new euphemism which has been conceived to explain the main problem in the marine seismic streamer market sector.  It translates to seismic streamer vessel over-capacity.  This was the topic of my first blog post, The Seismic Vessel Over-Capacity Problem (5-May-2015)Flexible capacity is really seismic vessels equipped to explore on short notice, but currently without solid order books to keep them in operation.  While people may be waiting for a resurgence in oil prices from its plunge in mid-2014, there will be no parallel improvement in the marine seismic streamer sector.  While oil prices may encourage exploration, such an infusion of capital for exploration will be spread out, for one thing.   When oil prices do rise again, customers will have an entirely new field of marine (and land) geophysical exploration options which did not exists when oil prices were higher.  Innovation that reduces costs will always be in fashion.  Also, the flexible and stacked capacity is almost equal to the current active operating capacity.  I believe that this vessel capacity will be absorbed into the market before any substantial price increase for marine seismic streamer services is realized.   Just as innovation and technology spurred competition in the hey-day of oil prices exceeding $100 USD /bbl, the same spirit of competition is adjusting to the current market.  Like the Iguana’s of the Galapagos adaptation to their perilous environment, the longer and lower slump in exploration has changed the marine seismic market completely and created new demands, risks, and opportunities for service providers.  It is not just about vessel capacity, but a paradigm shift in how to optimize the entire value chain from acquisition to imaging.  Only technology that delivers the needs of customers will prosper.  Some historically stalwart technology and techniques may no longer be in fashion for the current marine seismic streamer market.

Matters of the marine seismic sector have been monitored and written about since 2015 through www.MarineSeismicSurvey.com website blog articles.  I began working in the marine seismic industry in 1997 and these blogs represent my impressions of the industry.  Also, follow @MarineSeismicPM Twitter™ feeds for offshore and seismic news. The blogs have mostly concentrated on the marine seismic streamer market.  This market sector is analyzed as an indicator of the overall health of the deep water offshore oil and gas industry.  Marine geophysical data acquisition is the first step in any offshore project (concession) development.  Within these blog articles, pure play marine seismic streamer service providers, Polarcus and Dolphin Geophysical / Shearwater GeoServices have dominated the most analysis.  However, more diversified companies, such as Schlumberger’s WesternGeco (WG) and CGG also significantly impact the marine seismic streamer market.  WG and CGG had operated the largest marine seismic streamer vessel fleets prior to the mid-2014 collapse in oil prices.  The global marine seismic streamer vessel fleet has been substantially reduced from its mid-2014 levels.  Within the most recent blog article post, The End of Wide-Tow Streamer Seismic?, it was noted that one major marine seismic company has actually maintained the largest operational marine seismic streamer vessel fleets since the collapse.  When overly ambitious Dolphin Geophysical (Dolphin) was pushed into insolvency and unable to maintain their Sanco Shipping (Sanco) charters of wide tow Sanco Swift and Sanco Sword, a similarly ambitious competitor took over the Dolphin charters, as well, preparing for a marine seismic streamer market resurgence.

What seems evidently clear to most all oil and gas market observers is that past marine seismic business models simply do not apply in this new market reality.  Even those with many years of experience in the marine seismic streamer sector didn’t foresee an impending collapse or its repercussions.  At the same time, while the price of oil may be a key incentive for marine geophysical exploration, success has never been a guarantee for providers of offshore geophysical services, even when oil prices were high.  While this current downturn may have turned out to be longer and lower than many anticipated, one major player, especially, seems to have been behind the eight ball in their strategy following the collapse.   Vessels are expensive to operate and that is why vessel utilization numbers impact earnings for vessel owner/operators.  This is also why vessels are taken out of operation and stacked.  Keeping vessels equipped for operations is much more expensive than storing at a dock.   The largest marine seismic streamer fleets prior to the collapse in oil prices were operated by CGG and Schlumberger’s WesternGeco (WG).  WG introduced new build Amazon-class vessels into the fledgling market.  CGG bought the marine seismic streamer business from Fugro Geoscience in late 2012 and gained capacity that way.  WG does not publicly disclose which vessels are operating. CGG now operates five (5) streamer vessels according to the most recent Q3 2017 report.  (CGG’s website displays four (4).)   One pure-play player had ordered four (4) humongous new build vesselsThe first two were put into operation prior to the collapse in oil prices.  They did delay the delivery of their final two new-builds.  What also perplexed some was management’s decision to also assume the Sanco Shipping vessel charters of now insolvent competitor Dolphin Geophysical.  This positioned the company to have the largest operating marine seismic streamer fleet.  Apparently, company executives were planning for resurgence in demand that never arrived.   The main point is that CGG and WG had reduced their fleets significantly long before their competitors decision to reduce their operating fleet to six (6) streamer vessels was announced during their Q3 2017 financials.  For a more complete view of vessel operations, Searcher Seismic’s SeisIntel™ application does track the global seismic streamer fleet activity.

With 4 vessels in the global spot market, it is important to strategically manage the vessel schedule and the global distribution. ~ Duncan Eley, Polarcus CEO, Q3 2017 Earnings Presentation

 

Even with all the effort which has been made by the industry, there are still too many vessels for the volume of activity which is being offered. ~ Jean-Georges Malcor, CEO CGG (Q3 2017)

Prior to the seismic streamer market disintegration, Polarcus and Dolphin Geophysical (Dolphin) operated relatively small seismic streamer fleets.  Both Polarcus and Dolphin competed exclusively in the marine seismic streamer market.  Dolphin was a relative new-comer to the market and also was anticipating growth opportunities.  Dolphin especially was affected by the dramatic decline in oil prices which halted deep water exploration programs.  In a growth market of opportunities, operating small fleets was actually a commercial disadvantage in terms of servicing global demand.  It costs money to move vessels to projects in what is termed transit costs.  Currently, the operating marine seismic streamer fleets competing in this market are more in parity such that no one service provider can really offer global coverage.  However, while the global marine seismic streamer vessel fleet has been greatly reduced in number, the vessels which remain in operation to service the global marine seismic streamer market are bigger and capable of towing more streamers.  The two humongous new-builds, Sanco Sword, and the two Amazon class vessels, all with greater towing capacity, were introduced into the market up through the beginning of 2017.  So, the number of geophysical equipment instruments in the water acquiring data has actually not fallen as drastically as the number of operating vessels.  In the current market, a global fleet which has new wide-tow streamer vessels actually benefits customers economically much more than it does the vessel owners.  The real impact on the market is that the current global fleet can complete surveys faster because it is composed of larger vessels.   But, this is only part of the picture.

Marine seismic streamer vessels are the principal asset and liability of marine seismic streamer data acquisition companies.  When Dolphin went into insolvency a competitor assumed its Sanco charters.  However, Dolphin had also been chartering vessels from GC Reiber Shipping (GC).  Vessel owner GC created a geophysical seismic streamer company,  Shearwater GeoServices (SG), from Dolphin’s remnant geophysical data acquisition and processing capability and talent.   In a robust market, vessels operate to generate revenue.  However, reducing the number of vessels operating is a way to reduce losses, since idle vessels cost money.  Vessels with no crew but with equipment are the flexible capacity.  Polarcus has bare-back charter leases on two of its vessels, but in certain respects maintained its fleet pretty well in through the downturn and posted some impressive vessel utilization rates.  SG essentially is back into Dolphin’s niche, minus the Sanco vessels but operating the Polar Empress.  One fleet dominates the wide-tow category with its four humongous vessels.  However, while Polarcus and SG fleets are still not capable of towing the same number of streamers, Polarcus and Dolphin/SG have actually managed to have towed some of the largest areal streamer spreads.  Initially, Dolphin achieved this through increasing the distance between streamers.  However, Polarcus and SG now offer wide-spreads with improved cross line sampling through their Polarcus’ XArray™ and SGs FlexiSource™ acquisition techniques.  This is a significant development that seems to attract customers in a low-cost maximum coverage environment.

Those aware of geophysical seismic data processing importance in the seismic data value chain know that whenever marginal data is acquired, it becomes the job of data processing techniques to remove unwanted signal (noise) and extract as much value as possible from the data.  Vessels are considerably more expensive to operate than computer systems applying complex algorithms.  Not so long ago, marine seismic streamer companies had to negotiate expensive time-sharing arrangements between vessels acquiring seismic data proximate to each other.  The air gun source from another survey could impact the signal being used to acquire data.  This seismic interference caused problems in further data processing and imaging which form the maps used in drilling for oil.   More capable computers applying complex algorithms can now be used to separate-out such seismic interference.  More importantly, taken to the next level, similar algorithms are now being applied to remove overlapping air gun source data from subsequent survey shots.  The common convention for seismic streamer data acquisition has been to use a dual-source, flip-flop, technique for efficiency.  The flip-flop method allows continuous data acquisition by allowing air pressure to develop for the next shot; shot àrecharge àshot.  However, being able to acquire simultaneous source data reduces the data acquisition time.  It also affects the source-receiver midpoint geometry and record length.  These parameters are what define the point being imaged.  Smaller vessels can tow fewer streamers but space them wider.  So, while the wide-tow pioneer holds the record for the most equipment being towed, Polarcus holds the record for towing the largest areal spread.

I think it’s pretty evident that the shallow water is going to come back a lot quicker compared to I would say an overall ramp in deep water activity. ~ Paal Kibsgaard, Chairman and CEO Schlumberger (Q3 2017)

I’d just like to mention that the reason why the winter season is going to be still — that’s our view, still difficult for the data acquisition business, is that we are still operating in the market which is over supplied. Even with all the effort which has been made by the industry, there are still too many vessels for the volume of activity which is being offered. ~ Jean-Georges Malcor, CEO CGG (Q3 2017)

Increasing the number of sources reduces data acquisition time and also the amount of equipment to manage during a project.  Acquiring seismic data with multiple air gun sources and fewer seismic streamers changes traditional geometry requirements.  It also places more importance on post-acquisition data processing needed to clean the data and also the forward processing algorithms applied for the new geometry.  This is significant, in my view.  In 2007 a major step-changing dual-sensor streamer was introduced into the market.   This broadband streamer technology became a commercial 3D acquisition offering in 2009.  This streamer is able to acquire dual-sensor (conventional hydrophone + particle velocity sensor) data, as is done with (older) seabed seismic acquisition techniques.  (These day’s seabed seismic nodes acquire mostly 4-component data.)  By combining dual-sensor data, broadband data is acquired.  WG introduced their 4-component streamer, IsoMetrix™, in 2013.  Other companies have now also developed and introduced multi-sensor streamer technology into the market.  These are amazing technologies and several articles have been written about the imaging possibilities possible from data acquired using multiple sensors.  The same can be said for advances in sea bed seismic technologies and techniques.  But, this articles focus is on the current marine seismic streamer market where near-term costs, and not necessarily the full downstream potential realized from their data, is prioritized.  Multi-component streamers, or even streamer depth manipulation acquisition techniques using single sensor (hydrophone) streamers, are operationally more expensive and demanding than single-sensor streamer acquisition  Having a large spread of multi-sensor streamers operating optimally requires attention and maintenance in-sea.  Multi-sensor streamers need to be kept clean, and this is additional risk exposure for all stakeholders.  Without debating data quality issues, multi-source techniques with reduced streamer exposure for wide spreads is another win for customers in need of cost saving operation strategies.  However, the problem still remains that towing large areal spreads is not as beneficial for surveyors as it is for customers who do not have to worry about keeping their vessel fleets working.

So, there still remains a marine seismic streamer vessel over-capacity problem for a combination of reasons.   In the current environment, cost is the priority because there is no immediate profit-making incentive.  Marine seismic streamer vessels are expensive to operate.  So, acquiring data must be as efficient as possible.  But, what exactly does efficient mean in this current market?    Fewer opportunities mean fewer vessels are needed.  More expensive vessels are completing survey more quickly for modest profit margins.  The marine seismic business is as competitive as any and has seen providers of these services come and go throughout the years.  Before the collapse, the oil price marker for deep water field exploration and development seemed to be set within the sector for oil prices needing to be above $70 USD / bbl.  But, geophysical exploration costs are a relatively small percentage of overall deep water field development.  On the other hand, carrying out geophysical exploration is a first-phase commitment made by operators of offshore leases.  Based on these dynamics, investment in deep water assets will be minimized until any substantive spending can show a positive return.  For this reason, deep water exploration will likely be one of the last oil and gas markets to return to growth.   This places pure-play providers of deep water geophysical exploration services, such as seismic streamer, in a precarious position.  The successful business model for marine seismic streamer data acquisition and processing in the future still remains unclear.  Obviously, the number of profit bearing opportunities is more when oil prices are higher than the base development cost threshold.  On the other hand, with oil priced below the base development cost threshold, there is essentially no near-term profit making incentives for frontier exploration.

The main incentive for operators to explore is concession commitments and to possess risk-opportunity data for analysis.  There may be profit making opportunities further down the line, in terms of what development costs are relative to projections for sustained oil prices.  However, even if the threshold oil price of $70 USD / bbl moves lower, oil from deep water assets will remain among the most expensive to develop.  Oil will need to be priced above the threshold for a sustained period before there is any real growth in demand for deep water seismic streamer exploration.  Also, when cost is a priority over time, an older and less expensive vessel operating longer can be competitive.  Finally, to top it off, even if the threshold price of oil has headed down because of improved processes and technology, deep water field development will continue to be some of the most expensive.  When oil is sustained over the threshold, then the market will first absorb the flexible and stacked capacity before there is any substantial increase in vessel utilization rates.  Bear in mind, the different marine seismic streamer service providers have varied commercial commitments and structures also.  So, a profitable project for one service provider may not be a profitable project for another.  The appetite for cost-efficient and time-efficient acquisition will not be lost by customers.  The diversity in what is offered to customers in combining both novel acquisition techniques with innovative data processing and imaging solutions will provide customers with an abundance of choices.  The marine seismic streamer sector will remain soft.  Currently, there still remains too much global marine seismic streamer vessel capacity in operation.  Because of the variety of solutions available, vessel utilization will not necessarily be distributed proportionally to the different service providers.  It will be driven on the near term cost value to customers.  The marine seismic streamer market may have passed the lowest point of the trough.  However, marine seismic streamer service providers will never see the kind of activity that existed before mid-2014.  Both the problems and solutions are very different now.

There is a lot of seasonality in the vessel market. So obviously, Q1 and Q4, is usually a very good period to pick up a vessel. ~ Kristian Kuvaas Johansen, TGS-NOPEC CEO (Q3 2017)

Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict. ~ Robert J. Shiller

The End of Wide-Tow Streamer Seismic?


Content Revised 13 November 2013 by Request of Company to Remove their Named Reference

Horse sense is the thing a horse has which keeps it from betting on people. ~ W. C. Fields

You cannot beat a roulette table unless you steal money from it. ~ Albert Einstein

In some East Asian cultures the number “four” is considered unlucky.  Whether a number is considered lucky or unlucky can depend on whether the number’s name sounds similar to other words with positive or negative meanings. In Japanese, the word for the number “four” sounds similar to the word for “death.”   Never do things in fours.  But, if you do, change the sound.  Instead the fourth floor, be floor 3A.  Perspective is everything.  The geophysical exploration service sector is known to be cyclic, and so perhaps market prediction is more like a game of roulette than straight poker.  Many marine seismic streamer acquisition companies have placed their bet on wide-tow and invested in expensive new-build seismic streamer vessel programs.  The real question is, knowing what we know now, is wide-tow streamer acquisition still a sound bet when the final count is made?

Anyone in the oil exploration business knows that even when applying the latest technologies and methods a little extra luck can’t be a bad thing, especially when the game is cyclic exploration roulette.  The predominance of the wide-tow streamer seismic acquisition model is established.   The industry has always bet on wide-tow marine seismic streamer acquisition, and vessel streamer tow capacity has steadily increased over the years.  Since the collapse in oil prices in mid-2014, once again explorers have had to confront the unpredictability in oil prices and sow losses from such bets.  Dolphin Geophysical entered the marine seismic streamer market in 2011 with the same heady optimism.  They entered into a charter agreement with Sanco Shipping ASA to take delivery of wide-tow capable Sanco Swift in 2013, as well as Sanco Sword in 2014.  Schlumberger’s WesternGeco also added Amazon Warrior in 2014 and Amazon Conquerer in 2015.  And CGG grew its fleet in 2012 through acquiring the Fugro Geoscience streamer fleet as Fugro decided to abandon this market sector.  Dolphin Geophysical folded in late 2015 and WesternGeco and CGG dramatically reduced their fleets following the crash in oil prices.  Most marine seismic streamer players were also betting on the wide-tow business model and planned their expansions and new build programs accordingly prior to the decline in oil prices mid-2014.  However, one player stands alone in only minimally reducing their fleet and even toking on new charters.

Table 1

Table 2

How wonderful that we have met with a paradox. Now we have some hope of making progress. ~ Niels Bohr

 

In the realm of ideas everything depends on enthusiasm… in the real world all rests on perseverance. ~ Johann Wolfgang von Goethe

The demand for seismic streamer acquisition broadband data was ushered into the market through remarkably engineering multi-sensor cables historically applied in seabed seismic operations into towed streamers.  But, multi-sensor streamers – towed cables – broadband is but one acquisition approach.  Other innovative geophysical exploration companies developed their own broadband seismic streamer acquisition techniques to serve the new demand for broadband.  The market would not allow a single proprietor solution.  The competitive market wants choice for acceptable solutions.  Advances in operational streamer control and positioning systems have also seen levels of innovation which usher in the practicality of refined traditional approaches to achieve seismic streamer broadband acquisition.  The traditional seismic experiment that has defined the market, and more importantly what customers request in the form of tenders, has remained less flexible than the innovative environment they are immersed in.  New ideas are often curtailed by the procurement bureaucracy which holds onto traditional solutions to solve new problems.  This is discussed with the blog post, Upstream Exploration and the Paradox of Choice (10-May-2015).  Crisis always upends norms, for better or worse.  Innovations in marine seismic data processing and imaging technology has also unleashed new approaches and possibilities.  Innovations outside the traditional boundaries of market sectors have now encroached on the market share of marine seismic streamer acquisition.  Most notably, this is seen in the improvements and innovations in seabed seismic.

The economics of marine seismic streamer wide-tow are easy enough to understand.  The principal cost of a marine seismic survey has traditionally been tied directly to the cost of operating the marine seismic (streamer) vessels.  There are often support vessels also employed to support the technical data acquisition operations.  This cost is colloquially referred to as the project “day rate” for operations.  Marine seismic streamer vessels must be powerful enough to tow both the seismic source arrays and instrumented cables – streamers – at the same time.  This is what makes marine seismic streamer acquisition so time efficient.  Narrow azimuth marine seismic streamer employs a single vessel in operations.  These streamer spreads cover a large area.  The larger the area, the more data that can be acquired in less time with a wider the spread.  So, the reasoning goes, if the vessel is operating, tow as many streamers as possible as long as the operation cost for the vessel remains is less than the earned efficiency benefit of time or money to the customer.  This is market dynamic written about in the blog post, Marine Seismic Streamer Time and Money 2016 (6-Oct-2016)This business model can be called the reduced vessel utilization model.  If most of the cost is due to vessel operation, then reducing the use of the vessel will reduce project cost.  This model implies an operational cost base balance (similar vessel cost base) and a growth market that also prioritizes time savings.

Seabed seismic operations have traditionally involved multiple vessels, at least one vessel for the seismic source (high-pressure air guns) and another to lay cables and record data.  The operations also were more time consuming.  Seabed seismic has not had the same limitations of bandwidth which towed streamer seismic has had.  (The frequency loss in streamer seismic is a product of the depth under the water surface which streamers are towed.)  Seabed seismic has acquired multi-sensor broadband data for a long time.  Seabed seismic data has not had the same issues of azimuth and offset limitations which narrow azimuth seismic streamer acquisition has because of the inherent geometric limitations of towing source and streamers together.  In seabed seismic, the sensors are stationary and the source moves.  Years ago, seabed seismic was mostly ocean bottom cable (OBC) operations.  Long cables were laid on the seabed and then retrieved following passes of the source vessel.  Nowadays, the seismic sensors can be detached from cables.  Individual nodes can be placed by smaller autonomous underwater vehicles (AUVs).  As day rates have moved upward for wide-tow streamer acquisition, much in part to the cost of operating the larger and elaborately equipped vessels, day rates and efficiency gains in seabed seismic operations are not as comparatively expensive as they once were.  Simply, seabed seismic is encroaching on the marine seismic streamer market share.

Cutting prices or putting things on sale is not sustainable business strategy. ~ Howard Schultz

When you start losing market share, it’s really tough to gain it back; you need the product portfolio and presence in many markets. ~ Hans Vestberg

The first seismic vessel I worked on was the 4-streamer Western Atlas (1998)The first ocean bottom cable vessel that I worked on was the Dickerson Tide offshore India (~2000)Neither of these vessels had a swimming pool.  To be fair, the wide-tow seismic streamer vessel did not have a swimming pool either.  But, the living conditions on that vessel were several grades above both the Dickerson Tide and Western Atlas.  I have never been on a Titan class vessel.  But, from swimming pools to ball courts, living conditions for rotation work assignments are likely much more comfortable and healthier than my first offshore experiences in the business.  Wide-tow streamer acquisition is most advantageous for large rectangular shaped survey areas with no obstructions.  Frontier areas.  Finding the technical experts to work on long projects offshore is made easier when living conditions are of a high standard.  Even this view is indicative of an expanding market in need of the most experienced professionals.  Those days are behind and not every survey is in such a frontier area.  Many explorers are interested in smaller surveys over mature fields with vessel traffic and offshore structure obstructions all around.  In these areas, wide-tow streamer acquisition is prohibitive because the spread must maintain a safe distance from these obstructions.  Project survey areas must be large enough so that streamers and their accompanying equipment doesn’t have to be deployed and retrieved too frequently.  So wide-tow marine acquisition is not always well suited for multiple smaller sized surveys.  In general, wide-tow capable vessels are more expensive to operate.  They are most profitable when operating at capacity.  This is where the time and cost efficiencies are realized.

The reduced vessel utilization model is customer focused and not vessel operator focused.  The benefit of completing surveys more quickly mostly benefits the customer.  At the end of the day, unused capacity is expensive and unsustainable in a normal competitive market.  Vessel utilization is sometimes shared publicly by vessel operators.  The real issue is capacity utilization as it relates to the cost base of the operating assets.  If 100 streamers need to be deployed at $10,000 USD a day to break even, then 80 streamers would need to be deployed at $12,500 USD a day to break even.  With only 50 streamers deployed, the break even rate would be $20,000 USD a day.  When margins are low and if the market is only paying $13,000 a day, the ramifications are that the operator will lose money.  Also, if the operational costs do not cover the financing commitments, which may actually be used to facilitate an artificially low operational cost base, the vessel utilization model is not sustainable.  The main problem with wide-tow marine seismic is that the bet was placed long before the wheels of the market began spinning.  The investment for large wide-tow capable vessels was determined before mid-2014 and no one – seismic vessel operators or license operators – could even predict the market which those vessels would enter.  License operators cannot afford to engage in frivolous exploration spending.  License operators also cannot really afford a future without a viable marine seismic exploration industry.  But, that does not mean that a pre-2014 global fleet has to return.  Technology always determines options.  The question is whether wide-tow seismic will deliver the solutions to license operator exploration problems?

Markets are shaped by the decisions made by the management of the principal market players.  The company with the largest marine seismic streamer fleet is betting on strong demand for wide-tow streamer seismic data acquisition.  It is clear that most marine seismic streamer vessel operators miscalculated their bets over two-years ago with their investments in new builds and subsequent stacking several vessels.  The industry once again was caught flat-footed when oil prices collapsed mid-2014.  The operational streamer count has not changed as much as the vessel count has since before the crash.  This is because seismic acquisition companies retain their largest and most productive and efficient vessels.  The wide-tow model still dominates the marine seismic streamer business model.

The volatility and uncertainty in the geophysical exploration sector driven by oil prices makes even more sense when people consider the high risk toleration of explorers and pioneers.  Such risk taking compels the industry to repeatedly pay the price of rash decision making driven by an uncertain market.  The main drawback from such risk taking is its impact on the health and safety of employees.  The unpredictable cyclic oil exploration market is exacerbated by the unpredicatable and chaotic responses made during volatile market conditionss.  These conditions  feed on each other.  In the end, the rise or fall of the marine seismic streamer sector will depend mostly on the decisions made by the leaders of companies within that market.  It is their intelligent decisions and steady leadership which determines enterprise performance.

The gambling known as business looks with austere disfavor upon the business known as gambling. ~ Ambrose Bierce


Resilience is all about being able to overcome the unexpected. Sustainability is about survival. The goal of resilience is to thrive. ~ Jamais Cascio

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Riding the Wave of Uncertainty in the Marine Seismic Value Chain

Content Revised 13 November 2013 by Request of Company to Remove their Named Reference

What Will Customers of Marine Seismic Value Most in 2017?

Today the whole business is too much about procurement. It is very, very difficult today in the current circumstances to be in a position where we can value the technology, where we can value the innovation. At the end of the day [the] best value for money in the current circumstances means best prices, full stop. ~ Jean-Georges Malcor, CGG CEO

Opportunity arises for the prepared mind ~ Louis Pasteur (chemist and microbiologist)

In the recent article, CGG CEO: It’s All About Price , Jean-Georges Malcor assesses the current upstream O&G market environment for geoscience services.  When service company executives talk of price thresholds as the main determinant of customer choice, it points to a commoditized market environment for products or services.  In my blog post, Upstream Exploration and the Paradox of Choice (12-May-2015), I discussed the dilemma of O&G operator procurement practices which seek standardized solutions from multiple service providers.  When comparing apples to apples, choice can be reduced to just lowest price.  Reducing the complexities of project requirements through standardization of products and services is simpler, for one thing.  However, it also is a way of providing a level playing field for service providers to compete and reducing opportunities of favoritism.  Technological solutions become commoditized while operational health and safety, quality, and turn-around time become the differentiators.  The value differentiator from innovative technical solutions is lost within this procurement standardization processes.

In the past two years since the collapse in oil prices, service providers have been coming to terms with a prolonged period of time with oil prices below $70 USD/bbl.  The $70 USD/bbl price was the industries tacit price limit required to support profitable deep water project exploration and development.  Recent hedge fund predictions forecast oil rising to $70 USD/bbl by the end of 2017, as mid-November 2016 crude oil market prices were around $43 USD/bbl.  Norway’s Petroleum and Energy Ministry has recognized and become concerned over this new market reality as international companies are considering leaving Norway and selling assets to smaller, less financially resilient, oil explorers and private equity firms.  This has brought a warning to international companies that they may remain liable for the close down costs of assets in the event that new owners are not be able to handle operation expenses.  Oil and gas exploration and development market is well known for its ups and downs.  For the past two years, the industry has been trying to assess what kind of downturn this is.  Notwithstanding the geopolitics and technology differences that define each peak and slump in the O&G market, companies are coming to the realization of a prolonged period of low oil prices seems in the horizon perhaps more similar to the downturn and oil glut which occurred in the 1980s.

There was robust exploration and development following the OPEC instigated crisis in the 1970s, where there was over-supply and then a subsequent collapse in oil prices.   Between 1973-74 the real price of crude oil more than tripled. After declining slightly in 1975-78, it doubled again between 1979-80.  However, between 1981-85 the price of oil declined nearly 40% and then collapsed by nearly 50% during the first half of 1986.  This compares to the more recent crisis where international crude oil benchmark Brent fell 76% from June 19, 2014, when it traded at $115.06, to January 20, 2016, when it closed at $27.88.  The inflation adjusted average cost for the of oil from Q1 1974 through Q2 2015 has been calculated to be $53.12 USD/bbl.  However, if one studies a graph of oil prices over this period, because of oil price volatility, actual prices rarely match this average.  Nevertheless, the $53 USD/bbl historical average price is still ~25% lower than the $70 USD/bbl threshold thought to be needed for much of the commercially viable deep water field development.  Expensive areas to develop in both Asia and Africa will likely especially be affected in the near term.  This market environment therefore indicates that the industry must operate much differently going forward.  A paradigm change from the current business model is needed and this starts with how O&G companies assess their needs and value exploration and development in such a way to leverage innovation instead of standardizing it. 

There are four principles to understand about differentiation and the buying factors that go beyond price: They always exist; they have economic value; they vary by customer; and they change with time, because yesterday’s differentiators can be tomorrow’s commodity. ~ Dick Kallage, Differentiating in a commoditized market

Standardization leads to rigidity, and rigidity causes things to break. ~ Bill James

Rig counts are sensitive to price changes and generally excellent indicators of future oil production and general market health.  Operating rigs often represents how confident oil and gas operators feel about the exploration environment.  Rig count is also used to gauge activity levels for oil field service companies.  Global deep water drilling demand has experienced year-on-year decline since 2013, creating an oversupply of floating drilling assets and unparalleled idling and stacking.  This coincides in some ways with marine geophysical exploration, mainly seismic, which most often proceeds to mitigate risks for more expensive drilling campaigns.  During the Q1 2016, twenty-six (26) were stacked.  Almost one-hundred (100) have been stacked in the past 12-months.  About half of the stacked rigs are older and would have most likely been taken out of operation indefinitely.  However, about 40% of the stacked rigs are amongst the newest and commanded the highest rates.  For the past 18-months, my blog has been evaluating the 3D marine seismic streamer fleet as a measure of the health within the marine geophysical exploration sector.  Similar to rig count, many streamer vessels have been stacked since the downturn in oil prices mid-2014.  While the differences are many between rigs and vessels, the marine seismic 3D sector has also been stacking older vessels.  However, as a global fleet, the newer vessels capable of wide tow have been retained.  In my most recent blog, Marine Seismic Streamer Time and Money 2016 , I propose that the preference of customers hiring wide-tow capable vessels, which can complete surveys more quickly, is now more dependent on the day-rate whereby time constraints are less rigid in a sluggish and vessel over-capacity market.  Widest tow may not be lowest cost per square kilometer acquisition for newer and more expensive to operate vessels because time savings is not commanding the same premium it did in a robust exploration environment.

Malcor suggests that the last period of time the market was favorable was in 2012.  I disagree somewhat.  Fugro’s acquisition by CGG in early 2013 points to this fact.  Fugro had actually established a niche market in high-risk frontier exploration markets, such as east Africa.  Exploration opportunities had been on the decline to the extent that other players understood that they needed to compete in these high-risk arenas to keep vessels busy.  In 2010, new player, Dolphin Geophysical, entered the 3D marine seismic streamer market with the belief that this was a growing market.  Unfortunately, Dolphin Geophysical became insolvent December 2015.  Dolphin Geophysical entered into the low-cost end of the market.  They chartered their vessels from GC Reiber and just prior to their demise had agreed to charter two high-capacity vessels from Sanco Shipping ASA (Sanco).  In hindsight, Dolphin Geophysical was perhaps too ambitious in their growth predictions.  Like the industry, they did not foresee the collapse in oil prices mid-2014.  Dolphin Geophysical’s two Sanco charters were taken over by a competitor.  GC Reiber continued to operate their vessels through a Dolphin Geophysical affiliate.  Recently, GC Reiber joined with Rasmussengruppen AS to create Shearwater GeoServices.  This is an interesting marriage.  Rasmussengruppen AS operates tankers and marine transportation services.  In a current marine geophysical exploration market with razor thin margins, approaching cost savings from the vessel operations and support side makes sense.  Fuel and supplies are always issues for operating a seismic fleet. In fact, it is these costs which are the most expensive part of services offered to customers, as is related in day-rates.  Shearwater GeoServices will be focused on cost of data acquisition operations.  They will likely work to expand their data processing and imaging capabilities.  Clearly, there are geoscientists available to support this initiative in the current environment.  If Shearwater GeoServices can be a low-cost provider of data acquisition services, this may make them especially appealing in such a price-sensitive market.

One seismic streamer vessel operator has continued to grow their operational streamer capacity from pre-collapse levels.  While they have stacked older vessels, this has been done while taking on high-capacity charters and the construction of new builds.  Schlumberger’s marine seismic component, WesternGeco, commissioned two new build Amazon Class vessels that also entered the market in the depressed conditions.  No market player was without some form of optimism.  Both CGG and WesternGeco stacked multiple vessels.  Polarcus once commanded one of the smaller 3D seismic streamer fleets and has stacked only one of their 3D streamer vessels.  This is how the marine seismic streamer market players have panned out the past two years.  New builds have entered the market, but mostly vessels have been stacked reducing operational streamer vessels, and to a lesser extent, operational streamer numbers.  This is because by in large newer vessels were built to tow more streamers.  However, the time efficiency advantage decreases as the number of nominal tow capacity increases.  In other words, the benefit of towing 10-streamers over 8-streamers is essentially 25% reduction in time.  Towing 12-streamers over 10-streamers provides a 20% reduction in project time.  In a price-sensitive market environment, seismic company vessel cost base needs to be within the project time benefit range in cost savings.  It’s all about the cost to survey an area.  Broadband? Which kind?  Value enhancing differentiators are especially difficult to market for proprietary contract surveys which are often put out to tender with standardized guidelines used for awarding work.

Business is other people’s money. ~ Delphine de Girardin

Their new label became “private equity,” a name that turns the facts upside-down: A purchase of a business by these firms almost invariably results in dramatic reductions in the equity portion of the acquiree’s capital structure compared to that previously existing. ~ Warren Buffet on the evils of private equity.

Successful marine geophysical exploration, and subsequent drilling operations, showcase unparalleled scientific, engineering, technical, and operational prowess, to be sure.  However, as a business enterprise, geophysical exploration’s effective use of complex science and technology is constrained by the same principles as any company providing goods and/or services to customers.  This means it does not really matter whether the enterprise is involved in providing paperclips or satellite components.  Enterprises need to generate profit.  The question is how can the same equipment and business model paradigms generate profit after a substantial decline in the price of the target commodity?  In this respect, the success of marine geophysical exploration pursuits rests more so on the value that banks, private equity, and investors place into such pursuits.  The elegance and intricate use of science and technology is often lost in the complexity assembled within hedge funds and international tax schemes.  Dolphin Geophysical’s insolvency provided an equipment bargain opportunity for Polarcus.  It also resulted in TGS-Nopec and other players are expanding their multiclient data offerings.  CGG SA also told investors earlier this month that they are considering plans to restructure debt.  However, none of these financial maneuvers fundamentally change the marine geophysical exploration market itself, so much as help geophysical exploration companies continue another day or financial quarter.  The uncertainty for all new-builds is will they be able to generate the margins needed to accommodate their debt in only two years?  This would require a significantly more favorable market for marine seismic streamer services.

Since financiers may be dictating exploration terms as much as geoscientists, the market seems to favor the lowest cost base to deliver the stated requirements to fulfill base license terms and conditions.  There is no incentive to explore for $70 USD/bbl oil when Brent Crude is trading at less than $50 USD/bbl.  The cost of oil is the main driver for exploration budgets of operators.  In spite of the amazing data acquisition and processing / imaging technologies which have been developed in the past few years, the near-term future would seem to favor service providers with the lowest cost base and final price to accommodate the minimum contractual license commitments which operators have agreed to.  Even renegotiating contract terms and postponing exploration until a significant increase in return is foreseen may be the answer.  As a geophysicist who is enthralled by new technologies and used to prepare tenders for marine seismic/EM data acquisition and processing, I see a market that will not provide reasonable returns on the research, development (R&D), and deployment of such technologies lasting for some time.  The market does not seem to favor service providers getting their due return on R&D technologies, such as multi-sensor streamers such as WesternGeco’s IsoMetrix™ and even improved dual-sensor broadband streamer technology.  On the other hand, Polarcus XArray™ technology which effectively reduces operational exposure of equipment (extra source and reduced deployed streamers) while reducing acquisition time would be desirable in a cost sensitive environment.  This is how I see the market.  Geophysical service providers will be most effective if they can reduce the base cost of operations at the front-end of the value chain.  However, this places most pressure on enterprises which have invested heavily on new vessels and technologies that mostly accentuate their data acquisition focused products and services.  At the core is what solutions operators allow service providers to propose, especially within the proprietary contract side of the business.  Operators need to improve their procurement processes to better leverage service companies innovative solutions.  Simple and easy solutions may not be the best answer.

Even if oil does go to over $70 USD/bbl, this will not immediately impact vessel day rates significantly.   There is a lot of unused – stacked – capacity which would be able to enter the market when conditions change.  Essentially, an entire extra global fleet of marine seismic vessels are currently stacked.  They are stacked for a reason. If the vessels are sold or leased, then they could potentially enter the market as low-cost competition.  Obviously, the charter rates were not negligible to Dolphin Geophysical and are part of the reason why Sanco terminated the charters due to non-payment prior to Dolphin Geophysical’s insolvency filing.  Shearwater GeoServices, as a vessel owner, can enter the low-cost end of the market.  This is how Dolphin Geophysical started too.  Since most geophysical companies have significantly reduced fleets, the advantage of global fleet placement of vessels to reduce transit costs from job-to-job is more equalized amongst the different companies.  The problem with technology too is that it changes rapidly.  But, more relevant is that in a cost sensitive environment where vessel utilization is of principal importance, it is difficult to find customers to pay for much beyond the vessel cost base.  Acquisition or operation based data improvement is more expensive than post-acquisition data processing that may also enhance the quality and grade of acquired data.  With so much streamer vessel capacity currently idle, there will be no immediate or significant change in day rates for a period of time, perhaps even beyond 2020.  Any dramatic change in oil prices would initially absorb stacked vessels, especially the newer ones, back into the market.  Cost will continue to be the driver until there are prolonged oil prices above the $70 USD / bbl threshold.  My belief is that the cost constraint supersedes the time constraint in this market.  The main cost saving to O&G operators will come from lower cost-base vessels utilized in more operationally innovative and efficient ways.  Operational efficiency in acquiring data for less cost is how banker-led data acquisition will manage the plunge in oil prices.

The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency. ~ Bill Gates

I think, particularly in our tech industry, this is an industry that has violent innovation and then commoditization, and it’s a cycle of innovation/commoditization. ~ Ginni Rometty

Marine Seismic Streamer Time and Money 2016

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Content Revised 13 November 2013 by Request of Company to Remove their Named Reference

How the Market Has Changed and Where it is Headed After Q3 2016

If You Got the Money I’ve Got The Time ~ Willie Nelson Song

Today’s scientists have substituted mathematics for experiments, and they wander off through equation after equation, and eventually build a structure which has no relation to reality. ~ Nikola Tesla

In project management lexicon, there are three constraints which combine to determine the priorities, trajectory, and success of a project.  The triple constraint triangle legs are time, cost, and scope.  This triangle is also referred to as the project management triangle.  (Actually, the names of the legs of the can differ, as well.)  Fundamentally, however, the axiom holds that only two of the three constraints can be achieved for a given project.  If the requirement for the project is a high standard completed quickly, then the cost will be more.  If the requirement for the project is a fast time of completion and a low cost, then the scope or deliverable will be compromised.  Finally, if the scope requirement is high quality for low cost, the project will take longer.  This is predicated on the understanding that the constraints are fixed toward the goal and optimization to meet the scope requirements which fluctuates for each project.  The customer defines the priority of these constraints and because of this all grades of value creation are produced to satisfy the variety of customer priorities and capitalize on the current market.  The collapse in oil prices and their anticipated, albeit prolonged, resurgence has fundamentally changed customer priorities and how their interests are best served.  This is clearly the case with the marine seismic streamer market which is defined through the planning and execution of projects where equipment and personnel resources migrate from one project to meet one set of requirements and then to another project with different ones.  The market has changed dramatically and therefore so has the time and money equation.

Since oil prices plummeted in mid-2014, the current operating global marine seismic streamer fleet has been continually adjusting in pursuit of market stabilization.  Market stabilization would mean a global fleet of seismic vessels that would satisfy the global demand for offshore operator’s projects.  In such a market, operators would require enough seismic streamer survey services to keep vessels busy and allow service providers to make a profit.  (The industry is still awaiting this mythical balanced market.)  Truth is that dynamic markets driven by competition and innovation are always in flux.  Competition within the markets introduce new strategies and technologies, as well as new players.  The oil and gas industry is defined by boom and busts cycles.  A major collapse in the industry happened in the early-mid 1980s in the US.  However, there was not a substantial marine seismic fleet then.  Again, around 1999, there was also another down-cycle that affected marine seismic streamer vessel utilization.  So, the marine seismic streamer market has seen companies come and go.  In the past, companies have often absorbed vessels through mergers or acquisitions of fleets.  This had meant that the global fleet continued to increase overall while the number and names of service providers changed.  Technology improved, capability to drill in deeper water corresponded with more and larger survey sizes.  New vessels were introduced that could tow more streamer capacity and therefore complete surveys more quickly.  While oil prices topped over $100 USD / bbl in the expanding market, the low-threshold of $70 USD/bbl  was considered acceptable for growth.  Oil prices have remained well below $70 USD /bbl for over 18 months.

The market for marine seismic streamer surveys was expanding, which provided the incentive for new players and/or vessels to compete.  In this market environment, there was demand for marine seismic streamer services.  Also, new players and vessels were introduced which then provided operator’s more choices.  My first blog was posted 15-May-2015 and was titled The Seismic Vessel Over-Capacity Problem (originally posted on LinkedIn™ Pulse).  The article explains that too many marine seismic streamer vessels had entered the market which had already been changing prior to the collapse in oil prices in mid-2014.  Some market correction was inevitable when the rate of expansion and opportunities reduced.  New companies, as well as the established players, introduced new vessels, methodologies, and technologies.  However, in spite of the capital investments and improvements in capabilities and efficiency the profit margins for services decreased.  The time-cost equation for the pre-collapse market was built on a continuous areal increase in demand for marine seismic streamer services where time was the prioritized constraint.  The main expense for these services is the vessel day rate.  Essentially, all terms and conditions pivot around how many days a vessel will be needed to complete the project.  In this environment, increasing the vessel streamer tow-capacity meant that more area could be surveyed in less time.  However, there are different ways of looking at this.  The table below shows a rough estimate performance improvement with added streamers.  From Table 1, a vessel towing 10-streamers compared to a vessel capable of towing 14-streamers could  complete a survey in about 71% of the time.   Time is money.

mss-pt

In the future, instead of striving to be right at a high cost, it will be more appropriate to be flexible and plural at a lower cost. If you cannot accurately predict the future then you must flexibly be prepared to deal with various possible futures. ~ Edward de Bono

Obviously, the highest type of efficiency is that which can utilize existing material to the best advantage. ~ Jawaharlal Nehru

Another incentive to completing a project more quickly, of course, is that there is reduced exposure-time risks from delays.  There are some geographic areas where there are defined windows that only allow successful operations to acquire quality data that can be used for imaging the subsurface.  This may be because of weather, currents, or marine life migrations, to name a few.  Regardless, when streamers are operating, the equipment needs to be monitored and maintained.  Ideally, seismic streamer operations want to have customers paying for their vessels and streamers as many days as possible.  The geographic location of one project to the next is important because it costs both time and money to move vessels, equipment, and other resources from one location to another and start new projects.  This transit time is expensive, especially in a low profit margin environment.  Vessels are using fuel but mostly are not operating as seismic data acquisition platforms, which is their value-creation function.  In the expanding market, service providers fleet size mattered.  To reduce the expense of vessel transits project campaigns could be planned regionally.  For instance, there are always anticipated migrations southward from northern climes, such as the North Sea, to projects in the warmer and milder south each year.  Because of the extra cost due to transits, the expanding market also made it more difficult for companies operating smaller fleets to compete because of the costs incurred going to new projects.  A series of short duration projects would most affect service provider’s through additional transit costs. 

Offshore operators may not admit it now, but service providers were actually optimizing both the project time constraint and cost constraint prior to the decline in oil prices.  This was due to the hyper-competition brought about by the vessel streamer capacity that was being added into 2014.  In fact, several companies, including, WesternGeco (WG), and Dolphin Geophysical (Dolphin) all added high-capacity vessels into their operational fleets following the collapse in oil prices mid-2014.  (CGG had also acquired relatively new capacity through their acquisition of Fugro Geoscience prior to the collapse.)  Table 1 shows that the project time benefit from towing 12-streamers rather than 10-streamers (20%) is more than the respective gains of towing 14-streamers rather than 12-streamers (16.7%), and the actual gains are even less for 16-streamers versus 14-streamers (14.3%).   The new-builds added to the global fleet were high-capacity vessels, but each addition of two-streamers tow capability yields less efficiency benefit.  In a low-margin pricing environment tow-capacity offered a pricing buffer.  If the table is considered as cost rather than project time, then a vessel capable of towing 14-streamers had a 16% cost buffer over a 12-streamer vessel to work with.  Of course, there were increased operational costs with added streamers as well.  Aside from just the actual cost of the streamers themselves, the cost of peripheral positioning equipment which accompanies the streamers is significant.  Operating and maintaining larger spreads with a variety of specialized equipment adds costs.  Operationally, wide spreads require vessels with a lot of power to tow many streamers and also larger deflectors to maintain the width and separation of individual streamers during the project.  The main cost for marine seismic streamer operation are the vessels themselves.

The increase in the global fleet’s vessel streamer tow capability effectively reduced the duration of projects for customers.  However, the net-benefit of the additional tow-capacity is reduced as the number of towed streamers increases, especially when considering the cost of new streamer along with all of the required peripheral equipment.  The net-benefit is also reduced because of the operational and maintenance issues, but perhaps this is balanced out by less environmental exposure risks, especially in the realm of health and safety.  It is the equipped vessel which commands the rate.  This equipment includes the streamers themselves along with the positioning – navigation – equipment.  The seismic and positioning data needed for processing and imaging the subsurface is the customer deliverable.  This is what’s acquired with the vessel and other equipment.  As streamer-spreads have become wider and longer, equipment improvements in maintaining streamer and source positioning, along with the way such copious amounts of data are recorded and stored, have been simultaneously developed and improved.  The objective for all of these improvements is to acquire data which will provide information to direct drilling campaigns.  It’s about the data.  To this end, another problem that is exacerbated with towing wider spreads is the loss of near-offset data.  Seismic data is imaged by the mid-point between the seismic source (i.e., air guns) and the seismic sensors within the streamers.  As the extent of the seismic streamer spreads got wider, this mid-point increased as well thus losing the ability to image well between the source and front-end receivers, or near-offset data, needed for the imaging of shallow targets.  Also, in congested areas, fields with infrastructure such as drilling platforms, larger spreads may be problematic for maneuvering the vessel and streamers.

When our maps do not fit the territory, when we act as if our inferences are factual knowledge, we prepare ourselves for a world that isn’t there. If this happens often enough, the inevitable result is frustration and an ever-increasing tendency to warp the territory to fit our maps. We see what we want to see, and the more we see it, the more likely we are to reinforce this distorted perception, in the familiar circular and spiral feedback pattern. ~ Professor Harry L. Weinberg

Knowing where things are, and why, is essential to rational decision making ~ Jack Dangermond, Environmental Systems Research Institute (ESRI)

 

Time efficiency has paralleled cost efficiency in the marine seismic streamer acquisition market, thus incentivizing adding new-builds capable of wide-tow/large spreads.  In an expanding market with limited vessels, service providers could charge a time premium on their wide-tow capable vessels.  However, in an over-capacity market with several wide-tow capable vessels to choose from, cost efficiency is prioritized.  Cost efficiency boils down to the value of time versus the savings in costs.  If vessel cost base paralleled the project time gains in Table 1.0, then customers would be willing to pay 16% more in vessel costs for a completing the project 16% faster.  This would make time neutral, which may happen with a short project.  Since the collapse in oil prices mid-2014, cost has certainly become the more dominant constraint for most customers.  New vessels are expensive.  In reality, there is no parallel between cost and time, not even within a single seismic service provider, much less between competitors.  Cost base is essentially cost of operating a vessel.  Newer vessels likely cost more than older vessels.

One seismic players high-end price for a new-build (2013) high-capacity vessel capable of towing 18-streamers at 100 meter separation was in the neighborhood of $285 USD million.  The same company also signed a lease-back agreement for and older 10-streamer vessel for $80 USD million.  Table 1 shows that older vessel would take approximently 1.8 the amount of time to complete a project, but the cost (base) of the high-capacity new-build is about 3.56 the amount of the older vessel.  These new-builds were contracted when the market was expanding whereas the older vessel was leased-back following the plunge.  So, do the vessels that were contracted to be built in an expanding market still hold the same value after the collapse?  Probably not.  Nevertheless, vessels were purchased on the high-side of the curve.

After the market collapsed, service providers began to take the older and less expensive vessels out of the market and cold-stacked them.  They did not sell-them (and flood the market with low-cost competition).   Dolphin was the newest player into the expanding seismic market and the first to enter into insolvency after the crash.  Dolphin was expanding and had leased two new vessels, Sanco Sword and Sanco Swift, from Sanco Shipping ASA (Sanco).  Polarcus was able to purchase the streamer package from insolvent Dolphin for a song.  Cost is a priority.  Even though there are many fewer vessels in operation than there were at the start of 2014, several tabled projects have been due to prior license agreement commitments.  Offshore operators do not want to throw money away and likely want the “best data” that they can™.  However, as I wrote about in, Upstream Exploration and the Paradox of Choice, many strides have been made in both the acquisition and processing/imaging of seismic data.  The main milestone, in my view, has been the commoditization of broadband marine seismic streamer data.  Most of the innovative acquisition techniques are accompanied with designed processing and imaging.  In the world of competitive bidding, commoditization of requirements comes at the expense of differentiation such that cost remains a priority.   Even though service provider’s have reduced their fleet sizes, there remain limited deep water projects planned.  There needs to be a sustained period with oil prices over $70 USD/bbl for any real jump-start demand for marine seismic streamer surveys.  The global fleet had been growing faster than the rate of opportunities into 2014.   The fleet will continue to grow until Ramform Hyperion begins operations Q1 2017.  Streamer capacity utilization will be the most important performance indicator for service provider’s.  In a mixed fleet of 2D/3D and varied streamer tow capacity, vessel utilization alone is not enough to benchmark performance.  For instance, a 2D vessel working and a 12-streamer vessel stationary could be described as 50% vessel utilization.  The only benefit of a wide-tow vessel is if it is towing its maximum capable capacity.  If a vessel does not achieve that, then it is under-performing and not using its performance buffer.  A better indicator of fleet performance would be fleet streamer capacity utilization as mostly reflected by the use of the high-end and wide-tow fleet – the newer and more expensive vessels capable of towing more streamers.

Since cost is such a priority and so much of marine seismic streamer acquisition is directly related to the large streamer vessel, there is more interest in other marine seismic acquisition techniques, such as ocean bottom cable and nodes.  This reality has influenced an already staggering marine seismic market.  However, if time no longer is a premium or priority, these methods offer alternatives especially in areas where the operational time advantage is not as beneficial, especially congested areas.  More bang for the buck is what is needed.  Polarcus’ XArray™ reduces streamers and adds a source which reduces the tow-weight and drag from streamers for one thing.  The principle of reciprocity ensures that the point images between source and streamer receiver is the same as the point streamer receiver and source.  The ability to remove subsequent shot data in processing allows for additional sources with reasonably spaced shot intervals.  CGG can utilize less expensive older vessels to tow the source in the middle of the spread and accompany the streamer vessel in their TopSeis™ technique to help image near offsets.  So, there continue to be many new offerings for customers to consider.  However, many operators are skeptical of tendering new technologies in general because of the risk.  Strong EM pulses have been known to disable or destroy electronic systems.  This is what I studied in college.  Towed EM, which acquires data simultaneous to seismic data, would have fundamentally different electronic geophysical and positioning measurement systems operating at the same time.  What noise or interference one system imposes on the other would need to be evaluated.  Gravity data has already routinely been acquired with seismic.  Introducing multiple seismic sensors, now 4C with WG IsoMetrix™, into a towed streamer has showed the benefits of broadband data.  At the same time, each sensor introduces new types of noise, maintenance, and data processing issues.  Solving the same issues between EM and seismic means multiple geophysical data sets simultaneously and shows great promise.  In the expanding market, many new methods and technologies were developed.  The challenge in a cost sensitive environment is to employ the new technologies in an effective way to reduce the cost and risks to offshore operators because few will want to take additional risks with so much market uncertainty in the horizon already.

History in its broadest aspect is a record of man’s migrations from one environment to another. ~ Ellsworth Huntington

 There are three types of innovations that affect jobs and capital: empowering innovations, sustaining innovations and efficiency innovations. ~ Clayton M. Christensen

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