Going deeper into the seismic and geophysical industry
The Interview started with an overview of significant trends in the geophysical and seismic acquisition sector. There has been a “severe downturn since 2015”, stemming from the oil and gas industry. Meanwhile, “since about 2018 we’ve gone from five full-service geophysical providers, in other words, companies that acquire data, process the data, and also invest in multi-plant, down to really only three acquisition companies in the marine space.”
Regarding these changes, the “two full-service companies that left the sector in the acquisition business were WesternGeco, which is owned 100% by Schlumberger, and CGG. Both of those companies have elected to transform their businesses to be pure multi-client.” Consequently, TGS has “two strong competitors in their space”.
Pricing was also discussed; Q4 2019 saw strong order book and contract price increases. However, in 2020, the specialist says “there still remains some pricing increase that the industry would like to see… The industry is still not fully healthy.”
CAPEX in the multi-client space, according to our specialist, “will be heavily focused [on] the South Atlantic”. This kind of investment relies on regular government licensing rounds. Offshore Brazil and Argentina are listed as having potential, albeit the latter is “still very much a frontier area”. The activity other regions are seeing was also highlighted.
Another topic covered was the increasing interest in acquiring data from ocean-bottom nodes rather than streamers, as “the data quality is substantially greater”. Although it has historically been more expensive than streaming, the cost for ocean-bottom node data has decreased over the past few years – and there could be a “proliferation” of this data in future.
To access all the human insights from Third Bridge’s Global Seismic Acquisition Update Interview, click here to view the full transcript.