CGG sheds light on Mexico’s seismic scene

Audrey Leon speaks with Karim Lassel, Director General, CGG México, to get the company’s perspective on Mexico’s geology, the energy reform, and much more.

CGG’s sister vessels, the Oceanic Sirius and Oceanic Vega, are heading the five-vessel fleet currently acquiring Mexico’s first offshore orthogonal wide-azimuth (WAZ) seismic program on behalf of Pemex. Photo from CGG.

OE: CGG has been in Mexico for nearly 30 years (established in 1988), can you tell me your thoughts on Mexico pre- and post- the energy reform. What was it like to come into the country and establish operations, and what is it like in this new environment working within the country? Is there a noticeable difference?

CGG will indeed be celebrating 30 years of presence in Mexico next year. From the outset, we’ve been committed to bringing our latest technology to the country to accompany Pemex in its exploration and production projects. This has put CGG in quite a unique position in terms of our in-depth local/regional understanding of the petroleum systems in Mexico and the Gulf and also in terms of our long-standing operational experience and relationship with Pemex, pre-energy reform. Since the beginning of the energy reform and throughout all the changes, CGG has adjusted its structure and business offering to address the new market and new requirements. For instance, CGG was among the first companies to propose multi-client projects and has been an early investor in this newly established Mexico business model.

Switching from a national oil company (NOC)-dominated market to an independent oil company (IOC)/NOC multi-client market in such a short time is a big change, especially when it takes place against the backdrop of a severe industry downturn globally. For the last two years, and this will probably be the case in 2017 too, operators have all been in a transition phase… a period of adjustment and change for some or a learning curve for others. However, although the depressed global market has led to a major slowdown in investment, we are seeing a high level of investment in Mexico as a result of the unique opportunities generated by the energy reform. Our Encontrado multi-client reprocessing project in the Perdido fold belt is a key example of this. The energy reform has also clearly given rise to a different, new level of competition where cost is often used as a key differentiator. We are meeting this challenge by optimizing the design of our solutions through smart integration of all the geological and geophysical data available and using the best technologies, in order to help jump-start industry understanding of the new opportunities available in Mexico and reduce cycle times.

OE: What resources have you brought with you to Mexico?

At the end of last year, Pemex awarded CGG a key contract to acquire and process Mexico’s first offshore orthogonal wide-azimuth (WAZ) seismic program, which is specifically designed to optimize sub-salt seismic imaging in the geologically complex deepwaters of the Perdido area. We are therefore bringing a highly specialized fleet of five vessels into Mexico to acquire this new WAZ 3D data set. We are also teaming up the resources and capabilities of our Villahermosa and Houston subsurface imaging centers to deliver advanced processing of the newly acquired data combined with the data from an existing WAZ survey CGG acquired in the area in 2010.

The new WAZ survey, covering approximately 10,000sq km, will be acquired perpendicularly over the existing WAZ seismic data. The imaging of this first large-scale combined orthogonal WAZ data set is expected to provide significantly enhanced sub-salt imaging results due to the improved illumination of the targets beneath the complex salt canopy combined with our advanced subsurface imaging technology.

At this stage we are finalizing mobilization of the fleet of vessels we’ll be deploying so that the survey can start in February; with the delivery of full production processing results in early 2018.

Full waveform inversion velocity modeling is being applied over the entire 38,000sq km area of CGG’s Encontrado multi-client reprocessing project in the Perdido fold belt. The fine detail obtained can also aid geological interpretation. Image from CGG Multi-Client & New Ventures.

OE: What does the seismic scene look like in Mexico currently? What is your perspective on current activity off Mexico?

Seismic activity in Mexico remained at quite a high level during 2016 despite the global industry downturn although it wasn’t as spectacular as we saw in 2015. In terms of multi-client activity, 18 or so companies are registered to acquire and/or process seismic data and, interestingly, the focus of this acquisition work was for 2D seismic, although 3D acquisition took a much larger share of overall multi-client spend. Among the 40 or so multi-client projects approved by CNH, CGG had six in total and is currently conducting one acquisition and one reprocessing project that should be completed by mid-2017.

Considering that only Pemex is actively doing proprietary exploration, exclusive projects are rather limited. That being said, two tenders were awarded in 2016 and CGG won the challenging deepwater program mentioned earlier.

In my opinion, the multi-client seismic acquisition market will slow down slightly, pending the interest shown by the new IOCs that arrived in Mexico in December 2016, and its focus is also likely to shift from large 2D to acquiring smaller areas with higher resolution that can be mainly achieved with 3D.

OE: Could you tell me about some of the projects CGG is working on in Mexico?

The highlight of our multi-client data offshore Mexico is the Encontrado reprocessing. This involves the reprocessing of over 38,000sq km of legacy wide- and narrow-azimuth 3D data in the Perdido fold belt, linking this frontier region to our US data sets. An “Early-Out” RTM pre-stack depth migrated (PSDM) version of this merged dataset will be available in February. Nine surveys acquired with different orientations have been merged together to create a huge seamless data set. The intention is to turn this frontier area into a well-understood basin by using the latest technology to resolve large-scale complex geological challenges. The detailed regional PSDM volume will be suitable for both basin-scale exploration and potential prospect evaluation and will enable structures offshore Mexico and the US to be correlated to define an accurate interpretation of the area.

We are also currently acquiring 200,000 line-km of multi-client airborne gravity and magnetic data over six blocks off Mexico. The survey will provide coverage over the most prospective areas, from the prolific Perdido fold belt (Block 1) to the more mature near-shore heavy oil belt (Block 6). The data will help explorers map crystalline basement and magnetic and density anomalies from within the sedimentary section. The airborne survey will also collect continuous data through the “transition zone” from the marine environment to onshore.

A comprehensive interpretation, combining this new data set with available geologic and geophysical data, will also be undertaken by CGG’s in-house interpretation team. Deliverables will include a full geophysical interpretation report, including definition of basement lithology and structure, mapping of sediment fairways and depositional-centers and any intrusives or salt which may be present in the sedimentary section. These will provide important insights to exploration and de-risking of prospective areas by oil companies.

Block 1 of the airborne gravity and magnetic multi-client data has been acquired, processed and delivered to the participants.

OE: What are some of the challenges CGG sees in the Mexico market (workforce, equipment, etc.), and what are some ways the company has worked to resolve them?

The industry has experienced some serious challenges during the last few years and Mexico has not been exempt from those. If we look at the challenges specific to the local market the obvious ones are operational security concerns in certain onshore areas and the shortage of foreign investment to execute the projects that are planned or needed.

The fast-changing Mexican market, as led by the energy reform’s tempo, is also seen by some companies as introducing an element of uncertainty and therefore being seen as a challenge.

The key to addressing these challenges is to remain very attentive to any early signs of change and to be flexible so that we always maintain the right team in country with the technologies that are needed.

OE: As a company that has been present in Mexico for almost three decades, what is the long-term outlook for Mexico’s oil and gas industry from your perspective?

Without any doubt, offshore Mexico currently offers the most interesting and promising unexplored and underexplored basins worldwide; by this I mean that, in terms of their potential for new discoveries, Mexico’s waters are by far one of the most attractive areas on Earth today. This means that the growing industry interest in exploring these areas, as seen over the last three years, will very likely continue and probably grow further.

However, the “below ground” aspects are only half of the equation for exploration companies. The other aspects, that are certainly no less critical, are the “above ground” conditions, which include all the regulations, fiscal terms and overall working conditions that Mexico needs to consider to increase its attractiveness, particularly with respect to other countries that are also competing to attract investors. In this regard, one has to recognize that the Mexican authorities are very alert and active at comparing and adjusting, when and where necessary, to secure a leading position for the attractiveness of the Mexico brand.

In my opinion, we will continue to see many changes in the years to come and we will witness Mexico continuously striving to be a better place for investors.

Karim Lassel is Director General of CGG México and has over 25 years’ experience in the oil and gas industry. After joining CGG in 2012, he held various sales and marketing positions within its Land Acquisition business line before being appointed VP, Geomarket Director & Country Manager for Mexico, based in Mexico City. He spent 17 years working for Schlumberger, where he held various technical and managerial positions. Lassel has an engineering degree from the University of Science & Technology in Algiers and a Master’s in Geotechniques from the Paris School of Mines and is an INSEAD Alumni.