The demands of the E&P marketplace are growing -- and with the upstream spread thin, some needs and challenges are being exposed.
Much of the excitement in the geophysical industry today stems from the need for, and development of, new technologies and approaches to meet new challenges. Indeed, ordinary 3-D seismic has become just so, well, ordinary in many cases.
The new demands facing the industry can be grouped into three main areas, according to Jonathan Miller, CEO at CGG Americas:
Exploration is occurring in more challenging environments with complex geology.
Whether it’s subsalt with the need for better illumination, deep reservoirs, tight gas, etc., past solutions are running out of steam to some extent and new ones are coming on board.
Field appraisal and development present a new growth area for seismic application.
This looms as a potentially huge market, which could increase the overall size of the seismic industry, Miller noted.
In the case of production, E&P companies are under intense pressure to improve recovery, and seismic is poised to assist in meeting these challenges. For example, in the realm of improved repeatability for time-lapse seismic to better monitor and manage reservoirs, some folks anticipate nodal seismic technology is the way of the future, particularly in deep water.
The broad challenges in these three areas will require a large palette of solutions, according to Miller.
“The days when single solutions like 3-D, towed streamer or others (sufficed), I think are past,” he said. “You have to bring solutions that are much more adapted to a particular reservoir rather than a standard package of solutions.
“We’re entering an era where you have to work much more closely with the client to develop fit-for-purpose solutions,” Miller noted.
Finding the Benefits
While devising new solutions to wrest more hydrocarbons from the reservoirs at increasingly higher rates and for less cost looms as a major issue, the challenges to the industry don’t stop there.
One of the major bugaboos facing the companies involves security for the crews. Among other issues, there’s the problem of who manages the security and determines how secure operations are for the employees.
“We would not be in a place unless asked to be by a client,” said Chip Gill, president of the International Association of Geophysical Contractors, “and a security threat represents an exploration risk we can’t manage or predict necessarily.
“We’re the ones on the ground with our employees at risk,” Gill noted, “and we may decide it’s unsafe and shut down and get out. But what if the oil company says ‘we don’t agree it’s not safe, and you don’t have the authority to do that, and we won’t pay the demobilization fee or for work you did?’
“That’s a big problem,” Gill commented.
With activity heating up on western U.S. lands as the E&P companies scramble to stake out claims for coalbed methane, shale gas and such, the IAGC is in the midst of much wrangling with the Bureau of Land Management (BLM) regarding the seismic permitting process.
“We’ve hired counsel to address some of the issues we have about trying to conduct geophysical operations on federal land in this region,” Gill said. “But the clients don’t want us to push too hard with BLM because they don’t want to alienate the same guys they’re getting drilling permits from.
“Geophysical operations are temporary and transient and should be viewed as the environmentally-preferred way to conduct oil and gas operations,” Gill noted. “We have near-zero surface impact and eliminate unnecessary wells, yet federal managers don’t treat geophysical operations as a preferred environmental tool.
“How to permit geophysical operations is being delegated to specialists, especially conservation specialists (e.g., archaeological, wildlife),” Gill said, “and their interest is preserving rather than facilitating.”
Despite the oil companies’ current attraction to this region, particularly the Rockies, some seismic contractors prefer to avoid the hassle.
“We have a backlog that allows us to work in other areas,” said Jim White, president of Quantum Geophysical, “so we don’t do as much work in that area as our competitors do.
“It’s a tough area to work because of government restrictions with federal lands and all the environmental groups that throw these injunctions on you,” White noted. “If you plan to go to a particular job and at the last minute it’s not there and you have nowhere to go, you erode your margins very quickly. We don’t want to get burned in those situations.”
Gill emphasized yet another significant challenge facing the industry: talent -- or rather the pilfering of talent as the supply of skilled personnel shrinks even further.
“The oil companies are hiring our talent away at an increasing pace,” Gill noted. “They’re getting more and more aggressive.”
“We see it often,” Miller said. “We’ve lost good people to the client community, yet we carry on work for those same clients. It’s difficult to reconcile, but it’s a reality; there’s great pressure on top talent, and we see no end to the trend in the near future.”
Today’s pricey, near-frenetic seismic scene clearly isn’t perfect, but it’s nudging up against nirvana at a clip not even imagined only a few years ago, when feelings of gloom and doom permeated a then-near-decimated industry.
“Things are pretty darn good,” said TGS-Nopec’s John Adamick. “There’s a lot of exploration going on, and that’s a big driver for seismic. All seismic companies are benefiting whether they shoot proprietary seismic or multi-client.
“When exploration ramps up, we all benefit.”