Seismic Market Report

Seismic market report: Issues and trends

Is the seismic industry, like the oil industry itself, forever locked in boom/ bust cycles? Will the good times continue, or will overcapacity return?

Jeff Moore, Contributing Editor

Seismic exploration is an integral part in the upstream equation. In 2000 it was a depressed industry. Now it's a boom. World Oil tackled the task of "where it's been, where it's going" by asking the following questions: What are the market conditions of the industry, what are the industry trends of 2006, and what are the most significant technology and corporate developments in the past year?

DEFINING THE MARKET

Four large multinational companies dominate the market: Calgary/ Houston-based Veritas DGC, and three European firms – Petroleum Geo-Services (PGS), Compagnie Generale de Geophysique (CGG), and Schlumberger's WesternGeco.¹ At present, CGG is in the process of buying Veritas DGC, which will soon narrow the big movers and shakers to three.²

"WesternGeco is the largest," says Poe Fratt, who follows the sector for AG Edwards. "And then you have CGG, Veritas and PGS, which are roughly all the same size as far as equity market capitalization." ³ Together, these companies account for about 45% of the entire sector's earnings. The seismic industry's total earnings fluctuate, but typically, it brings in about $4.5 billion in a good year.⁴

Outside these large contractors, small companies make up 80% of the remainder of the market and account for 55% of its total revenues. Says Fratt, "Once you get beyond the top industry players, it's pretty fragmented. There are a lot of smaller players." ⁵ They conduct niche services for narrow geographic markets and typically have 10 or fewer employees.⁶

There are minimal financial and technical entry barriers for the land-based seismic market.⁷ Exactly how many seismic companies there are is difficult to estimate because of the high number of small firms in operation from year to year. Veritas asserts that, "…it is impossible to discuss the global competition in land acquisition in any quantitative fashion [because of the] constantly changing configurations of seismic crews and the immense numbers of channels in the market." ⁸ However, it is much easier to count the marine seismic fleet capacity because of the cost of a vessel. Veritas says that there are 60 towed-streamer vessels in operative order around the globe, including 44 3D vessels and 16 2D vessels.⁹

Seismic companies produce three primary products: 1) contract data acquisition; 2) multi-client data acquisition that the company keeps in a database and sells and resells to more than one company; and 3) seismic data processing and interpretation to identify prospects and types of geologic formations.¹⁰

Acquiring data accounts for about 47.5% of the industry's work, and analysis accounts for about 13.5%, but this latter service has grown over the last five years and continues to do so.¹¹

GLOBAL MARKET TRENDS

The long-term trends are clear: from 1982 to 1992, 75% of exploratory wells (of all types) drilled in the US were dry. Only rarely could seismic technology read fluid content within underground traps. During the next 10 years, only 62% of all exploratory wells drilled in the US were dry.¹² Seismic gets most of the credit for this improvement.

The seismic industry is tied to the oil and gas industry for nearly 70% of its business, with mineral mining and government contracting making up the rest.¹³ Multinational companies are subject to myriad host country regulations and financial exchange bureaucracy.¹⁴ At the same time, competition from state-owned enterprises overseas that benefit from state financial assistance is increasing.¹⁵

As of September 2006, the US led the world in seismic market share. Regarding the CIS states, Africa, and the Far East, their percentages of the world market are in proximity to each other and reflect the increased search for hydrocarbons in those under-explored regions. For the most part, the total numbers of onshore survey crews in each region that are working vs. those that are idle as of September 2006 reinforce the market segmentation percentages, Table 1.¹⁶ Offshore, seismic activity (excluding North America) finds that Far Eastern and European waters had a majority of the global market share as of fall 2006, Table 2.

TABLE 1. Seismic crew counts, total available, working and idle.

TABLE 2. Offshore seismic crew counts, total available, working and idle.

The overall trend here is that in each region, except for Canada's seasonally-related idles, there were high crew utilization rates, reflecting the present boom market. Schlumberger Ltd. representatives say, however, that they suspect a slowdown in the current North American drilling boom could occur in the future, either because a recent flurry of rig orders or dropping gas prices. But they also expect declining reserves to keep this sector active, so they do not expect it to bottom out anytime soon.¹⁷

In recent years, due to the robust and continuing need for natural gas, there has been "…renewed interest and increased exploration activity in the mature Canadian and US markets," which is one reason US activity remains high.¹⁸

Bob Hardage, of the Bureau of Economic Geology at the University of Texas at Austin, says that the US seismic market is brisk. According to him, small oil and gas companies dominate the US market, "And these small independents are heavy users of seismic technology. They just have small projects. They just want a 3D survey that's maybe 10 or 12 miles. But there are hundreds of guys out there who want that service. And they have sort of been the forgotten user group." ¹⁹

Hardage explains that this is creating a niche domestic seismic market. "Now then, that is causing the creation of some small sort of boutique-type contractor businesses that say, ‘Hey, we are just going to specialize in taking care of the little guy.' And that is something that is probably unique to the onshore US. It's not a big, worldwide picture. But domestically, it's a very important trend."

Daniel C. Houston of the small Houston-based firm, Hunter 3-D, says the pace of business for small companies has been exceptional. Moreover, despite his small firm's size, he also works with some of the majors such as Total and Chevron and, sometimes, he conducts surveys overseas. "One of the reasons we are doing well is that there is more work available than there are people. We can frequently get more done, and cheaper, than the in-house guys, plus, we have specialized expertise."

Another strategic trend is that seismic companies are expanding overseas into far away and remote markets – places the energy companies are going. Says Fratt, "I'd say the big trend is that we are looking in areas outside of the traditional offshore areas that we've been looking in for the last 30 years, areas like India, offshore Australia and the South China Sea. International activity is clearly where the growth is."

Schlumberger representatives see Russia as a long-term place of investment, especially Siberia. Scores of Western seismic companies are maneuvering to enter the Russian market and expand there, but it is not easy. Russian nationalism is running high, and mergers and joint ventures with host country companies is a common route many are taking. (As usual, politics accompanies nearly all aspects of the gas and oil business.) Schlumberger, for example, bought PetroAlliance in 2003 and has grown its yearly revenues from $50 million, when it started, to $1.25 billion in 2006.²⁰

World trends reflect several market anomalies. First, robust onshore exploration is taking place in "frontier" countries with severe political and security risks, such as Algeria and Colombia. Second, exploration is taking place in countries that are attempting to reform their reputations for these risks, such as Libya and Pakistan. Third, activity in Poland represents that country's ongoing plan to modernize past its Soviet Bloc structure and align with the US, Europe and NATO. Fourth, heightened activity in Russia, China and India represents ongoing hydrocarbon development that began in these countries in the last five years.

PRESENT MARKET CONDITIONS

As of 2006, competition is stiff, but it is based on a high level of market activity, not limited demand as in past years. "Three to four years ago, you heard a lot of complaints about how cutthroat pricing was," says Poe Fratt. "And that has now actually stabilized, and pricing appears to have improved." ²¹

Capacity. Hardage says that one of the reasons for the price wars was because of overcapacity. "The seismic contractors probably got themselves too heavily loaded in equipment and personnel." ²²

But capacity has since stabilized. Fratt indicates that there is now balance between capital equipment and demand. "I think we are much closer to balance, although we are seeing some capacity getting out into the fleet, mainly by companies that are operating and building vessels in Norway. Norway tends to be an area where a lot of companies build on speculation." He says that balance is partially upheld by increased exploration in India and other Asian markets and also Brazil.

Chip Gill, president of the International Association of Geophysical Contractors (IAGC), says that "today, demand exceeds capacity, and it has for some time. That's created a pretty significant backlog, especially in the marine acquisition business. This allows the contractor to capture higher margins and resist client efforts to impose contractual terms that transfer risk, and ultimately costs, to the contractor. On the land side, there is more capacity, and people can bring it in quicker. It's kept pace better.

"There is significant new capacity being added on the marine side, with new ships being constructed and new streamers being added," Gill says. Ships that were taken off the market [in the early 2000s] and had been used for other purposes are now coming back in.

"It's a bit unclear right now on how this new capacity will play out in the market in the future. At some point, capacity is going to catch up to demand. From the contractor's standpoint, this is an area to watch and be concerned with." ²³

Prices. Bob Hardage notes that the costs of services have gone up in the US at a fast pace. "Overall, there are tremendous dynamics going on in the business in the past year or so, where costs of services ratchet up month by month. So, both the profit and income pictures are highly dynamic right now."

He says that there are several issues pushing costs up. One is the maritime seismic companies' increasing use of long-offset data. Another is the increasing use of wide and/or multi-azimuth data. These acquisition methods require vessels that tow multiple cables that reach lengths of 10 km, and sometimes an additional source vessel or two. This means that new vessels must be more powerful and larger than those used in the past and, thus, more expensive.

Hardage sees another technology that could push up near-future costs in the marine sector: the use of multi-component seismic. Adoption so far has been very limited, mostly because this is an expensive process, which requires putting sensors on the sea floor to acquire shear wave components. In the case of autonomous nodes, they often require ROVs to put the sensors in place. "So, any company that wishes to acquire multi-component data in deep water has a very hefty bill to pay for that service, because there's been a very heavy capital investment in the equipment needed to do the work."

On land, Hardage points to simple profit taking as a cost driver. He adds that supporting service costs are increasing, too – specifically in the US. He cites surveying as an example. "For the source and receiver stations that are used to acquire onshore seismic data, some of the survey subcontractors now will be charging $30 per station. And you may have enough source and receiver stations in a square mile that the cost just to do the surveying is $10,000 per square mile." Hardage says surveying costs used to be about a tenth of this.

The multi-client model. Other seismic market trends in 2006 occurred in the multi-client survey sector. Multi-client surveys were a business model that contractors developed in the 1990s because business had slowed and many energy companies did not want to spend a significant amount of money for surveys. Accordingly, the seismic companies began to shoot surveys with their own money in areas they thought energy companies might be interested in, and they sold the data on a syndicated basis to scores of different energy companies.²⁴

The upside of this model was that it kept the seismic companies employees hired and their equipment in use. The downside was, however, that they swamped the market with data. For four or five years, the energy companies fed off this data, and the seismic companies did little contract work as a result. Hardage puts it this way, "The contractors sort of shot themselves in the foot by this period of time . . . in order to try and maintain their physical size and their capital investment."

Multi-client decline is partially spurred by the business model not working as well as seismic companies wanted and also because demand is back up and there is more contract work to do. "Of those two factors," Hardage comments, "the business model [being] wrong is probably the more important. Speaking as of today, probably, it's demand that's now starting to have a business impact weight that maybe exceeds the weight of the bad business model that they had in play for a while."

Some companies, like Veritas, assert that multi-client surveys are part of their long-term strategy to maximize performance, and that they will continue to add to their existing databases in select regions, where they predict energy companies will need seismic data – places such as Gulf of Mexico, the North Sea and onshore Canada and the US.²⁵ Fairfield Industries also says it will continue multi-client activities, primarily since it has, according to company records, the biggest, bottom-referenced, multi-client 3D database in the Gulf Coast.²⁶

Vertas retains its land crews, since the planned divestiture of them was called off.

But Bob Hardage says that for most of the seismic industry, the multi-client surveys have diminished significantly. "There are still some multi-client surveys occurring, but it's a much-reduced frequency from what there used to be. What I see is a trend in the business that the contractors are trying to divorce themselves of surviving by multi-client survey and focus more on proprietary surveys for single clients." One thing that contractors have learned is that higher levels of pre-funding are the safest bet for making speculative surveys less speculative.

Technology developments. There have been no major breakthroughs as of late, but there have been improvements, chief among them is the ability to acquire and process data for subsalt imaging.

And then there is the multi-component seismic technology that Bob Hardage mentioned earlier that is beginning to proliferate. Hardage says, "It's gone in fits and spurts in various places for various companies, and its problem right now is that people are really wanting case histories. They say, ‘Show it to me, and prove it to me'."

Hardage says that multi-component seismic technology costs more than what is commonly on the market at present, and potential clients want to see the cost benefit. He also says that there is a new technology that could very well find its way into global markets if testing and actual implementation prove successful. Hardage and scientists at the Bureau of Economic Geology have been testing cellular wireless technology's role in the seismic acquisition business. "It's essentially the same technology used for cellular telephones," he explains.

"So you have a little box that captures data that's attached to the seismic equipment – your geophone string – and it functions just like a ‘juiced up cell phone,' you might say. It has a huge memory, where it can acquire lots of data, and then it can either send that data to a central location via a system of radio towers just like you use your cell phone, or someone can actually go out and pick up the little unit and take it into the office and let it dump its data overnight, and then take it back, and hook it back up to its geophone," says Hardage. Vibtech was an early entrant into the wireless land market a few years ago. I/O's Firefly is a wireless system that will undergo field testing in Wyoming this fall.

Hardage continues, "The cables that are involved in a 3D seismic land crew can weigh 40 or 50 tons. You may have 600 miles of that stuff laid out on the ground to acquire a 3D survey. And so, you've got this huge fleet of equipment of trucks and men who are there strictly because the system requires these massive cables. And if you get rid of that, then everything downsizes. All the costs go down."

Hardage says that so far, testing results of the system is encouraging and positive. He sees cellular technology probably replacing most of the cable-based systems that are used onshore at some point in the future.

On the sea floor, autonomous nodes are a cableless technology that store multi-component data in the node unit for later retrieval. Last year's survey by Fairfield over BP's GOM Atlantis field marks the first large survey in deep water for this cableless technology. Veritas just announced that it has tested a new autonomous 4C ocean bottom node. The company expects the new system, named Trilobit, to be delivered for commercial use by year end.

COMPANY ACTIVITIES

The following company-specific news is current as of early October 2006.

CGG's purchased 92% of Exploration Resources, the parent company of Norwegian-based Multiwave, in mid-2005. Multiwave specializes in maritime seismic surveys and multi-client seismic services, and is known for its seabed operations. CGG reportedly bought Exploration Resources to shore up its 4C/4D seabed operations.²⁷ And the creation of CGG-Veritas means that a vast amount of industry expertise will be concentrated into three large companies – Schlumberger's WesternGeco, CGG-Veritas and PGS.

As far as corporate news goes, the biggest happening in 2006 occurred on September 5 when CGG bought Veritas DGC for $3.1 billion, forming the company, CGG-Veritas. Company management judges that the combined synergies of both companies could earn $65 million per year, pre tax. The deal still has to pass shareholder approval, expected toward the end of 2006.²⁸

The move will merge the multi-client data libraries of both companies, undoubtedly making it one of the largest in the world. CGG-Veritas's maritime fleet will be the world's largest, which will consist of 20 seismic vessels, 14 of which are high-capacity 3D vessels. The company is expected to be 7,000 employees strong by the end of the merger.²⁹

While CGG and Veritas wait for shareholder approval, Sercel, an equipment-manufacturing subsidiary of CGG, purchased Vibration Technologies Limited (Vibtech) for an undisclosed amount of cash. Vibtech is a Scottish-based company founded in 1996 that specializes in the latest wireless technologies for seismic recording. Vibtech has been testing its latest wireless product called Unite, which was being readied for deployment.³⁰

CGG's most recently completed survey work was off the coast of Norway. The company's new flagship, the Geo Challenger (see pg 148), conducted a 4D survey of 930 sq km previously surveyed in 1997 by another contractor. The Geo Challenger towed 12 Sercel Sentinel solid streamers, 5,100-m long each, with 50-m separation. It was the ship's first ever deployment after having set sail in June this year. It is now headed to India for seismic surveying for ONGC.³¹

CGG will also shoot a survey above the North Falkland basin lasting several months for Rockhopper Exploration beginning in October. The survey is in the old Shell acreage waters.³²

Veritas DGC was going to divest itself of its land crews by selling them to an investment group. However, that divestiture was called off in September. In October, Veritas announced the beginning of four multi-client 3D land surveys in Texas and Oklahoma, two in each state. Upon completion, the company's non-exclusive 3D data in these areas will cover 6,579 sq km. The company already has 22,000 sq km of 3D information in its US land data library.³³

Veritas is having a new Viking Class vessel constructed at West Contractors yard in Olensvag, Norway. When delivered in February 2007, the vessel will be the seventh seismic vessel in the Veritas fleet and the fourth to be owned and operated for Veritas by Eidesvik Offshore ASA. The vessel is 105-m long with an extended breadth of 24 m, and will have the capability of towing up to 12 long streamers. The vessel's gross tonnage is about 11,500 t. It will accommodate up to 70 persons and will cost (excluding seismic equipment) $55 million.

PGS said in early October that it had signed a 50/50% joint venture agreement with GeoHazar, a Russian company to shoot surveys in the Caspian, Azov and Black Seas. The venture's registered name is PGS Khazar and is yet another example of the joint venture formula many seismic and energy companies are using to enter the Russian market. Similarly, competition to explore and drill in the hydrocarbon rich Caspian has been growing amongst multinational, Russian and Chinese energy companies for several years. GeoHazar and PGS have worked together in the Caspian since 1997, and this most recent venture is a continuation of that relationship. The duo has a total of nine small seismic vessels in the Caspian region with ongoing survey jobs expected to continue well into 2007.³⁴

As for PGS's fleet, the company announced in late September that it had contracted with Aker Yards in Norway to build the Ramform 8 to add to its existing Ramform Class. The shipbuilder is also currently building the Ramform 7 for PGS. Ramform 8 will cost $88 million without the seismic equipment and computer suite. Delivery is set for 2009. The Ramfom 8 will be able to tow 22 streamers and will sport the latest seismic equipment deployment and retrieval equipment. Additionally, PGS says the vessel will contain a larger fuel capacity and bigger power plant than earlier models, giving it greater range and speed.³⁵

WesternGeco. The consolidation trend creeping through the energy sector includes the seismic industry. Poe Fratt says it began in the 1990s. "When Western Atlas was acquired by Baker Hughes in 1997, and then they merged the seismic businesses of Western Atlas and Schlumberger in 2000, forming WesternGeco, that helped improve the industry structure and resulted in consolidation that is still continuing." ³⁶

Schlumberger spent $2.4 billion in May 2006 to buy the remaining 30% shares of WesternGeco that it did not already own. It spent almost another billion more buying seismic technology in the past two years in other consolidation moves.³⁷

India's ONGC extended WesternGeco's current 2005 – '06 season contract to include two more surveying seasons through 2007 and again in 2007 – '08. WesternGeco is operating in India via its subsidiary, Q-Marine, with two vessels that will continue to survey targeted areas off India's west and east coasts. Combined, the original and new contracts represent the largest surveys ever undertaken in India.

Overall, Schlumberger's chief executive Andrew Gould said in September 2006 that the seismic market was highly active, and they estimated their company would grow between 15% and 20% a year beyond 2010.³⁸

Dawson Geophysical. Dawson reported a 32% increase for the quarter ending on June 30, which was $42 million – $10 million more than the same period last year. Company representatives say demand for their services is at an all time high, and they see continued demand into 2007. Dawson fielded a 12th crew in June 2006.

The company says that it now owns more than 65,000 recording channels and 95 vibrator source units. In August, all of Dawson's crews were deployed throughout Texas, New Mexico, Oklahoma, Utah, Arkansas, Wyoming, New York and West Virginia. In a huge contract deal, Dawson contracted in 2006 with WesternGeco to provide Q-Land seismic data – which uses 30,000 channels of point receivers – to survey land throughout the US, except Alaska and Hawaii. This comes hot on the heels of a huge 3D survey the company did in West Texas.³⁹

PGS' Ramform 7 and 8 now under construction.

Houston-based Fairfield Industries has been operating in Vietnam for many years. In March 2006, it announced a restructured Fairfield in Ho Chi Minh City (Saigon) under the name, "Fairfield Vietnam Limited." It is a joint venture between Fairfield and its 10-year partner, PetroVietnam. They used to operate under the name, Golden Pacific Group. The difference is now is that Fairfield is the majority partner.⁴⁰

It also has a refurbished processing center that includes a staff of 32 and a processing capacity of 5.2 teraflops, which greatly increases the company's computing power. Fairfield believes that this new center and its sister complex in Jakarta, Indonesia, put the company in an excellent position to capitalize on increased exploration and hydrocarbons interest throughout Southeast Asia.⁴¹

The company's successful OBS deepwater node survey over Atlantis field last year, "…deployed more nodes over a larger area than any previous node survey, in water depths greater than any previous 3D ocean floor seismic survey." ⁴²

Fugro announced in October that it had completed a major upgrade of one if its multi-purpose geotechnical drilling vessels, the Markab, categorized as a drilling vessel with seismic capabilities.⁴³ Also, in October, the company won a contract for 10 offshore surveys for PEMEX, worth $5.7 million. The job began in October and entails the area running from the west side of the Bay of Campeche to the US border, which equates to 3,000 sq km. The company has operated in Mexico for 13 years as Fugro Chance de Mexico, S.A. de C.V. Together with its partner, Diavaz, Fugro has completed at least 300 surveys for PEMEX over the years.⁴⁴

The company also won a unique contract in September to monitor landslide areas on the west coast of Norway at a World Heritage Site and major tourist area.⁴⁵ In July, Canada awarded the company a $2 million contract to survey its eastern maritime boundary to bolster its territorial claims with the United Nation's Convention on the Law Of The Sea.⁴⁶ These type contracts, while not uncommon, represent only a small fraction of the seismic industry's work.

To expand its maritime capabilities, Fugro contracted with Norwegian shipbuilder E. Forland Shipowners in August to acquire its 3D seismic vessel, the Seisquest, which can tow eight streamers. The contract is for four years with an option to extend. It will begin in May 2007.⁴⁷

In June, Fugro ordered a 3D seismic vessel from Bergen Mekaniske Verksted shipyard in Norway to be hailed the Geo Caribbean. Set for delivery in October 2008, it will be 101-m long with a 14-streamer capacity of over 9 km. Fugro ordered two other ships from E. Forland Shipowners in 2006 as well. They are the Geo Celtic and the Fugro Saltire. The former is a seismic survey vessel while the latter is as ROV subsea support vessel.⁴⁸ Fugro's seismic survey fleet consisted of 15 vessels as of fall 2006.⁴⁹

BGP is the biggest land-based seismic company in the world. The company is an arm of state oil firm CNPC and has had a busy year in 2006. In August and April, it announced three projects in Saudi Arabia. The first was a four-year project with the option to extend for two more years to conduct 2D surveys throughout the Kingdom to begin in 2007. The second was also a 2D contract, but for the Red Sea. Both projects are scheduled to begin in 2007.⁵⁰ The third is a 3D project for Aramco in Berri, which entails coverage of land and shallow waters.⁵¹

BGP has two projects in Pakistan, one for Eni Pakistan Ltd, and one for Pakistan Oilfields Ltd. The Eni project will cover at least 3,500 km with 2D and began in September.⁵² The Pakistan Oilfields project covers 450 km, will consist of 2D and 3D data, and is located in Sind province's Kirthar National Park. This particular project is also a continuation of BGP's surveys conducted in the same area in 2001 and 2002.⁵³

The company also has two projects in Libya; one, a 2D survey for Sirte located south of Tunis that covers 2,630 km, and the other, a 2D seismic project for Eni North Africa in the Murzuk basin that covers 6,000 km. The first project began in April, the second in July.⁵⁴

BGP has other projects in Algeria for Shell, which is a 2D survey of 1,430 km. It is also in Venezuela for PDVSA, which is a 3D survey of 1,475 sq km, and its in Mauritania for Total conducting an 11-month survey that began in May that covers 1,500 km in two different blocks, each – TA 7 and TA 8.⁵⁵

Regarding technology and equipment upgrades, in April 2006, BGP took delivery of two Sercel products – the SEAL Marine seismic acquisition system and a G GUN set. The equipment was for the company's first-ever streamer vessel, the BGP Pioneer, that will launch at the end of 2006.⁵⁶ BGP launched its first cable-handling vessel in April 2006, called, the BGP Orient II. ⁵⁷

TGS signed a charter agreement with BGP to use the newly converted R/V BGP Pioneer 3D seismic vessel. BGP is performing a major upgrade to the vessel in Singapore to expand its workspace and towing capabilities and to install a state-of-the-art seismic equipment package. BGP and TGS expect the Pioneer to be ready to start work in January 2007. The charter will last for a minimum period of one year with an option for TGS to extend the charter by one additional year.

Geokinetics has been on a buying spree, and is likely to continue to do so, assuming that it can continue to find the financing. During the last year, the company bought Calgary-based Trace Energy Services (December) and Houston-based Grant Geophysical (in September, for $125 million). These acquisitions, together with its existing subsidiaries, Geophysical Development Corp, and Quantum Geophysical, give the company status as a major North American land contractor with 20 crews available, and also an international presence.

Scan Geophysical ASA is an Oslo-based provider of basic 2D and 3D marine acquisition services, including multi-component OBC. Established in 2002, the company is currently operating one 2D and one 3D streamer vessel. In 2007, it will launch three newly converted 3D vessels and one 2002-built 2D vessel. The company also has representatives in Moscow, Houston, Singapore and Caracas.

Scan and PT Fairfield Indonesia, a subsidiary of Fairfield Industries, signed a Consortium Agreement in October to conduct joint 2D and 3D marine seismic operations in Indonesia on a combination of proprietary projects and multi-client surveys. 

LITERATURE CITED

¹ IBIS World Industry Report, Geophysical Surveying and Mapping Services in the US, 54136, 22 September 2005, 8; information for this section of the report also came from annual and quarterly reports from Veritas and PGS: PGS, 20-F, 8-9.
² IBIS World Industry Report, Geophysical Surveying and Mapping Services in the US, 54136, 22 September 2005, 8.
³ Interview by Author, Poe Fratt of AG Edwards in St. Louis, 25 September 2006, 3:30 pm.
⁴ Informal survey of three persons interviewed and market reports viewed. Interviewees commented that no one really knows exactly how much the industry earns or how many companies are in the market because of its fragmentation, and that estimates and best guesses were the best they could muster.
⁵ Interview by Author, Poe Fratt.
⁶ IBIS World Industry Report, Geophysical Surveying and Mapping Services in the US, 54136, 22 September 2005, 6, 8, 12-13.
⁷ Veritas, 10-K, 2005, 4.
⁸ Veritas, 10-K, 2005, 4.
⁹ Veritas, 10-K, 2005, 4.
¹⁰ Veritas, 10-Q, 30 April 2006, pp17
¹¹ IBIS World Industry Report, Geophysical Surveying and Mapping Services in the US, 54136, 22 September 2005, 11, 12.
¹² IBIS World Industry Report, Geophysical Surveying and Mapping Services in the US, 54136, 22 September 2005, 24.
¹³ IBIS World Industry Report, Geophysical Surveying and Mapping Services in the US, 54136, 22 September 2005 7, 17, 20.
¹⁴ Veritas, 10-K, 2005, 4.
¹⁵ Veritas, 10-K, 2005, 4.
¹⁶ World Geophysical News, (averages from reports from 1 September 2006, 1 and 15 August, 1 July, 15 June, and 15 May 2006.)
¹⁷ Market Watch, Schlumberger CEO says strong growth to continue beyond 2010, 26 September 2006.
¹⁸ Veritas, 10-Q, 30 April 2006, 17.
¹⁹ Interview by Author, Bob Hardage, Arlington, Va., Bureau of Economic Geology, 26 September 2006, 2:06 pm.
²⁰ Market Watch, Schlumberger CEO says strong growth to continue beyond 2010, 26 September 2006, http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=google&guid=%7BD251AF5C-ED66-4090-95C5-F89215B6B76B%7D&keyword
²¹ Interview by Author, Poe Fratt.
²² Interview by Author, Bob Hardage.
²³ Interview by Author, Chip Gill.
²⁴ Background explanation from Interview by Author, Poe Fratt.
²⁵ Veritas, 10-K, 2005, 8.
²⁶ Fairfield Industries Acquires RFTrax, 11 April 2006, http://www.rftrax.com/x59.xml.
²⁷ CGG Acquires the Share Majority of Multiwave’s Parent Company; Exploration Resources, 08.09.2005, http://www.multiwave.no/.
²⁸ CGG and Veritas DGC Inc.( Enter into a Definitive Merger Agreement: Creating a Leading Global Geophysical Services and Equipment Company, 5 September 2006, http://www.cgg.com/corporate/news/2006news/0905_LSC.html.
²⁹ CGG and Veritas DGC Inc.( Enter into a Definitive Merger Agreement: Creating a Leading Global Geophysical Services and Equipment Company, 5 September 2006, http://www.cgg.com/corporate/news/2006news/0905_LSC.html.
³⁰ Sercel acquires VibtechSercel, 28 September 2006, http://www.cgg.com/corporanate/news/2006news/0928_Vibtech.html
³¹ CGG Geo Challenger due to complete major 4D survey with Sercel Sentinel solid streamers, October 3rd, 2006, http://www.cgg.com/corporate/news/2006news/1003_geochallenger.html.
³² J. Brock, Falklands: Hydrocarbons Daily Record, 21 September 2006, submitted by Falkland Islands News Network, Juanita Brock, 22 September 2006, article: Oil prices are rising while the markets are falling in the US, Hydrocarbons Daily Record: Thursday, 21 September 2006, http://www.sartma.com/art_3345.html.
³³ Veritas Announces Four Major 3D Land Data Library Programs in USA, 3 October 2006, http://www.veritasdgc.com/bins/content_page.asp?cid=2194-4074.
³⁴ New Russian Joint Venture with GeoHazar, 4 October 2006, http://www.pgs.com/Pressroom/What's_New/New-Russian-Joint-Venture-with-GeoHazar/.
³⁵ PGS - Option for second new Ramform vessel exercised, 28 September 2006, http://www.pgs.com/Pressroom/Press_Releases/44134/.
³⁶ Interview by Author, Poe Fratt.
³⁷ Market Watch, Schlumberger CEO says strong growth to continue beyond 2010, 26 September 2006.
³⁸ Market Watch, Schlumberger CEO says strong growth to continue beyond 2010, 26 September 2006.
³⁹ Dawson Geophysical Company Reports Third Quarter Results With Twelve Crews Operating, 1 August 2006, http://phx.corporate-ir.net/phoenix.zhtml?c=79945&p=irol-newsArticle&t=Regular&id=890064&, and Dawson Geophysical Company Announces Fielding of Additional Crew, 25 January 2006, http://phx.corporate-ir.net/phoenix.zhtml?c=79945&p=irol-newsArticle&t=Regular&id=808714&.
⁴⁰ Fairfield Vietnam Limited Announces the Grand Opening of Our New Processing Center, 3 May 2006, http://www.fairfield.com/News%20%5F%20Events/News/Grand%20Opening/, and Teraflop defined at: http://www.tiscali.co.uk/reference/dictionaries/computers/data/m0064778.html.
⁴¹ Fairfield Vietnam Limited Announces the Grand Opening of Our New Processing Center, 3 May 2006, http://www.fairfield.com/News%20%5F%20Events/News/Grand%20Opening/, and Teraflop defined at: http://www.tiscali.co.uk/reference/dictionaries/computers/data/m0064778.html.
⁴² Fairfield to Present at the 68th EAGE Conference & Exhibition 11 June 2006, http://www.fairfield.com/News%20%5F%20Events/News/EAGE%20Conference/.
⁴³ Upgrade geotechnical drilling vessel MARKAB completed, 5 October 2006; http://www.fugro.com/news/pressdetails.asp?item=330.
⁴⁴ Fugro wins contract in Mexico, 2 October 2006, http://www.fugro.com/news/pressdetails.asp?item=326.
⁴⁵ Field monitoring contract for Fugro Survey in Norway Oslo, Norway, 6 September 2006, http://www.fugro.com/news/pressdetails.asp?item=322
⁴⁶ Contract Award Canadian UNCLOS, 5 July 2006, http://www.fugro.com/news/pressdetails.asp?item=315.
⁴⁷ Expansion of Fugro's seismic fleet, 9 August 2006, http://www.fugro.com/news/pressdetails.asp?item=31.
⁴⁸ Fugro extends fleet capacity, 30 June 2006, http://www.fugro.com/news/pressdetails.asp?item=314.
⁴⁹ http://www.fugro.no/. ⁵⁰ BGP won new contracts in Saudi Arabia, http://www.bgp.com.cn/About%20Us/News-2006-0823.htm
⁵¹ Saudi Aramco awarded BGP a 3D seismic project in Saudi Arabia, http://www.bgp.com.cn/About%20Us/News-2006-0429.htm.
⁵² Eni Pakistan Limited awarded BGP a 2D project, http://www.bgp.com.cn/About%20Us/News-2006-0804.htm.
⁵³ BGP (Pakistan) International won another seismic project from Pakistan Oilfields Limited, http://www.bgp.com.cn/About%20Us/News-2006-0801.htm.
⁵⁴ Eni North Africa awarded BGP a 2D seismic project in Libya, http://www.bgp.com.cn/About%20Us/News-2006-0426.htm, and BGP obtained a 2D contract in Libya, http://www.bgp.com.cn/About%20Us/News-2006-0322.htm.
⁵⁵ SHELL awarded BGP a 2D seismic project in Algeria, http://www.bgp.com.cn/About%20Us/News-2006-0413.htm, and A 3D project of PDVSA awarded to BGP, http://www.bgp.com.cn/About%20Us/News-2006-0324.htm, and Total awarded BGP a 2D seismic project in Mauritania, http://www.bgp.com.cn/About%20Us/News-2006-0323.htm.
⁵⁶ BGP has selected Sercel Marine Seismic Acquisition Systems for their newly-rigged seismic vessel, BGP Pioneer, http://www.bgp.com.cn/About%20Us/News-2006-0512.htm.
⁵⁷ BGP launched its first OBC vessel, http://www.bgp.com.cn/About%20Us/News-2006-0511.htm.

THE AUTHOR
	Jeff Moore is a strategic consultant in Arlington, Virginia. He is author of the book, Spies for Nimitz, which depicts America's first modern intelligence agency. He has also written numerous articles on energy, mining and security in Asia for such publications as World Refining, Asia Times, Asia-Inc, and Jane's.