Call it a dispute. A disagreement. A misunderstanding borne of opposing perspectives.
Either way, who can do what with seismic data can be a thorny issue for geologists who use the data and for geophysical companies that acquire and provide the data.
The contention revolves around Master License Agreements (MLAs) adopted by the Houston-based International Association of Geophysical Contractors. MLAs govern the relationship between a geophysical company (the data owner) and a licensee (the E&P company).
Some geologists have questioned the fairness and reach of the MLAs, comparing their effect to that of a car dealer being able to tell a person who has leased a car exactly who could ride in the car -- and what they could do.
The geophysical industry sees it differently.
Geophysical officials observe that these data essentially revolutionized the E&P business, enabling unprecedented drilling success rates. Geophysical companies poured billions of dollars into acquiring non-multiclient, or exclusives, data worldwide beginning in the 1990s when 3-D demand was souring.
At the end of 2001, these data (and their derivative products) were carried on the collective balance sheets of geophysical companies at a net book value of nearly $3 billion U.S., according to the IAGC -- representing a significant unrecovered investment.
Via the multi-client business model, restricted, non-transferable data user licenses are sold to individual E&P companies for a fraction of the cost of acquiring and processing the data. The geophysical companies can earn a reasonable return on investment in multi-client data only by selling multiple licenses over time.
The basic premise of MLAs is that these data -- and certain products derived directly from them -- constitute valuable intellectual property of the geophysical company. Certain usage rights that are considered reasonable and customary are granted to the licensee.
The agreements generally prohibit certain types of disclosure that could damage the future economic potential of the data for its owner.
Even so, abuse of data owners' rights is rampant, according to Chip Gill, president of IAGC.
"The geophysical industry has written off more than $1 billion in losses from the data owners," Gill said. "The loss is poor investment decisions in part, but also abuse of data owners' rights.
"It's not just individuals, sole proprietors," Gill said, "but also the largest multi-national companies out there. The data licensing model is under attack from many different directions."
A good -- and common -- example can be found at the twice-yearly NAPE meetings, where Gill noted data abuse is evident on a routine basis.
"A company was showing a prospect and data (at the recent NAPE) to demonstrate the validity of the prospect," Gill said. "And they had the data displayed on the wall even though they didn't own it.
"They had the data, worked and developed the prospect, and were trying to market the prospect, all without compensating the data owner," Gill noted. "The data owner discovered this as he was walking by the booth."
Marc Lawrence, senior vice president at Fairfield, said there are limits even for a licensee.
"The licensee is not buying the data but has a license to use the data," Lawrence said. "He doesn't own it.
Not to be overlooked in this whole picture is the fact that licensees are accessing a treasure trove of invaluable multi-client 3-D seismic data for a tenth of the cost to acquire it, according to Lawrence.
"Data are the asset of the people who acquired and processed it and not the asset of the licensee," Lawrence noted. "It's a valuable asset and you have to protect it from misuse and theft, which -- when it occurs -- is intellectual property theft."
One of the key problems in the industry is the data licensee typically doesn't follow the data, according to Gill.
"The license is signed, and the data go into a company and the license agreement and what the obligations are, as well as the restrictions, are not easily accessible by those in the company who actually use the data," Gill said. "This is one of the problems and one of the reasons we created the Code of Practices."
According to that code:
- Licensed data is the property of the licensing geophysical data owner. This ownership transcends and survives any reprocessing, merging or enhancement of the data.
- Terms of data use are bound by a Data License Agreement, and data licenses are not transferable.
- Data may be shown to third parties only under the terms of the Data License Agreement.
- Partner companies must each hold licenses for data used jointly in multi-company projects.
- Data reviews are for QC and general data assessment, not for obtaining geological or exploration insights without licensing data.
- Any consultants or third parties working with licensed data are bound by the same terms and conditions as licensees.
- Licensed data may not be published in any form without the written permission of the data owner.
On another front, Gill noted that globally the E&P companies are lobbying governments to roll back the confidentially agreements.
"If the E&P companies value the data," Gill said, "they should support and not fight the value of confidentially."