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