No-one seems to have fathomed out the depth of the potential market for seabed-based seismic surveys. Andrew McBarnet reviews the state of play.
Sometimes the surf seems to be up, but those big waves that make the surf boarders’ day just don’t quite materialise. That more or less sums up where purveyors of all options for ocean bottom seismic (OBS) surveying, both retrievable and permanent, sit right now. On the surface, market conditions look as favourable as they possibly could be, oil companies have plenty of ostensibly viable technology to choose from and they have the cash; and yet orders for any form of OBS amount to no more than a ripple.
The good news is that a modest crescendo of industry voices is beginning to sing the praises of seabed seismic, even if the level of current activity does not reflect this. The argument in favour of OBS is well known. Placing recorders on the seabed still provides indisputably better (multi-component) imaging of the subsurface than towed streamer data. The use of any form of seabed cable or node does restrict the operational use of OBS to location-specific reservoir appraisal or production monitoring projects, but this is where it can provide the improved high resolution data needed to optimise the extraction of oil and gas. The case for some permanent facility for seismic monitoring of fields over time also seems very persuasive in the context of improved oil recovery.
‘A modest crescendo of industry voices is beginning to sing the praises of seabed seismic.’It is of course true that the OBS experience to date has not been an especially happy one. The main contractors concluded a long time ago that ocean bottom cable (OBC) seismic amounts to a high maintenance operation, for which few oil companies would be prepared to pay the premium price needed to make it viable. In the last decade contractors have preferred to focus their attention on refining towed streamer technology to provide an increasingly acceptable and significantly cheaper way of achieving 4D seismic, where OBC would otherwise be the obvious solution in terms of repeatability and quality of data.
Norway’s Ekofisk complex: site for CGGVeritas OptoWave PRM solution.The Norwegian start-up company Reservoir Exploration Technology (RXT), equipped with a full wave ocean bottom digital recording system from Input/Output (now ION Geophysical), tried to challenge the orthodoxy by launching a fleet of customised OBC vessels. Early successes were followed by an implosion from which the company has still to properly recover. Some of this could be put down to the difficulty of a small, asset heavy company maintaining investor confidence in the market downturn a year or two ago. OBC projects were always likely to be the first to be shelved by oil companies as a bit of a luxury. A towed streamer alternative existed for some projects and the extra value of the OBC multi-component data was by no means a slam dunk. But RXT also seems to have been dogged by some ugly operational and financial challenges. Judging from its recent filings, the company acknowledges that it still has some work to do to address those issues.
European Supporter: addition to the FugroNodal fleet.Significant backlog
On the positive side RXT has generated some significant backlog. It is working its way back to operating two crews and its Brazilian partnership GeoRXT in which it has a 45% interest has 12 months of work with Petrobras. The ongoing contracts at least suggest that oil companies view OBC as a viable technology, for the time being at least. Of the main players CGGVeritas and WesternGeco but not Petroleum Geo-Services (PGS) have kept their toe in the water. CGGVeritas has two OBC crews working on long term contract in the Middle East and two in the Far East, all deploying technology based on products from its Sercel manufacturing subsidiary. WesternGeco has been operating just the one crew working mainly for BP using Q-Marine-inspired equipment. The company line has long been that ocean bed seismic is still a business best left to the niche players. This is of course easy for it to say. The deep pockets of parent Schlumberger could always be called upon to rapidly augment its OBS offering, or buy in technology, should the pay-off on investment look sufficiently inviting.
If the market is going to be propelled forward, the betting probably has to be on node-based seabed solutions rather than OBC. From a historical perspective this may be a surprising conclusion. In the early 2000s SeaBed Geophysical, as it was then, intrigued the market by winning a contract to carry out a seabed seismic survey in the Caribbean using node receivers positioned by ROV. This proved to be a one-survey wonder until 2006 when SeaBird Exploration acquired the company and launched the custom-built Hugin Explorer for node-based surveys. The company attracted support from majors notably Total, Chevron and BP in West Africa, the North Sea and the Gulf of Mexico respectively.
But in a virtual replay of RXT’s experience, the company struggled to find consistent backlog with cost and operational issues big hurdles along with insufficient funding. This latter was taken care of this year with the purchase of SeaBird’s entire node operation for $120 million by Fugro. The acquisition said something about Fugro’s faith in node-base seabed seismic, but that is by no means the end of the story.
Just as OE went to press, CGGVeritas startled the market with the purchase of Fugro’s entire Geoscience division in a $1.1 billion transaction. A detailed assessment of the implications will have to wait another issue. But a key feature of the deal is that the two companies will pool their respective resources to form a Seabed Geophysics joint venture which includes Fugro’s and CGGVeritas’ ocean bottom nodes businesses and CGGVeritas’s transition zone, ocean bottom cable and permanent reservoir monitoring activities. Fugro will make a cash payment of €225 million to CGGVeritas for a 60% controlling interest. The arrangement suits Fugro’s strategy of wanting to divest from the volatile seismic exploration market and focus more on the extended production phase period in the life cycle of oil and gas fields.
CGGVeritas, which has dabbled in node technology in the past, and late last year ‘confirmed’ its commitment to what it referred to as the emerging deepwater node market with an order for the manufacture of an additional 800 Trilobit four-component (4C) ocean bottom nodes (OBN) to make a total of 1000 units in its equipment pool. The new nodes were scheduled to be commercially available earlier this year, but there is no news yet of their deployment on a commercial contract.
March of the nodes
Leading the march of seabed nodes into the seismic market is the privately held company FairfieldNodal, which has deployed a far greater number of nodes on projects – in the North Sea and the Gulf of Mexico – than any of its rivals. It is just about to embark on a job for Apache in the Gulf of Mexico which will set a new benchmark for node deployment and OBS surveys in general. The mega survey is expected to cover some 1100 blocks using the company’s Z700 nodes, so called ‘nodes on a rope’ because they can be placed and retrieved without ROV assistance.
The survey will involve the company’s latest fleet addition European Supporter, the result of a conversion from an ocean cable-laying vessel to a hybrid nodal seismic vessel that can serve as a source vessel with its own node-handling ability. It will be joining FaifieldNodal’s New Venture and C-Pacer as part of a ‘super crew’ in the Main Pass area offshore Louisiana. The crew will be able to deploy over 4500 nodes at 50m station spacing using 225,000m of recovery rope in a single patch, making it the world’s largest oceanbottom nodal crew.
RXT vessel Vikland: operational problems have hampered performance.Apache must consider this large-scale node-based survey and the expected multi-component, full azimuth imaging results as the most cost-effective method for appraising a large swath of acreage. It is early days but in certain circumstances this type of survey appears to present a potential challenger to the towed streamer wide azimuth approach to imaging complex geological settings found in the Gulf of Mexico and elsewhere. Obviously towed streamers can cover a much wider area but wide-azimuth surveys are big and costly operations which is why providers such as WesternGeco, PGS, CGGVeritas and TGS have so far adopted a multi-client approach.
FairfieldNodal also offers its deepwater Z3000 system which requires ROVs like the CGGVeritas and Fugro competition. The company has conducted 12 deepwater node-based operations in the Gulf of Mexico, the first for BP in 2006, and has had a continuing contract with Shell since Easter 2010. The Z3000 crew has also worked for Shell in Brunei and for Chevron in the North Sea. However, there clearly has not been a queue of oil companies wanting to employ the service. Not that the customer base is likely to be that large, given that deepwater offshore operations the world over are really the preserve of the supermajors and some savvy national oil companies with the resources to fund these hugely expensive projects.
However, FairfieldNodal has sensed an opportunity in the even more exotic market of permanent reservoir monitoring (PRM), which continues to languish in the doldrums. At the Society of Exploration Geophysicists (SEG) annual meeting in Las Vegas next month, the company is due to launch a node-based semi-permanent PRM system aimed at meeting some of the existing oil company resistance to wider adoption of PRM.
Tenth anniversary
Those who follow the scene will know that the life of field seismic (LoFS) project on BP’s Valhall field offshore Norway will be celebrating its 10th anniversary next year. The UK-based group WGP announced the other day that it had just completed the 15th monitoring survey over the field adding weight to the numerous testimonials to the fact that PRM works, in other words the seismic data really does provide valuable information to the reservoir management team in the bid to optimise the field’s development. BP has needed no convincing, because it followed Valhall with a further LoFS project on the Clair field in the UK offshore sector and a LoFS adaptation on the Azeri-Chirag-Gunashli fields in the south Caspian.
For quite some time no companies followed the BP lead, even though you would have thought that the potential additional reserves and ultimately the contribution to the bottom line would offer a massive incentive for operators of giant fields around the world. Instead the oil companies appeared to get themselves hung up on a number of issues which rightly or wrongly provided the recipe for procrastination. As a completely new technology there were immediate questions about whether the buried conventional OBC system supplied by OYO Geospace would last the anticipated 25 year life of the field.
A number of companies, including PGS (OptoSeis), CGGVeritas (OptoWave), and TGS (Stingray), proposed that the no in-sea electronics alternative provided by fibre-optic cable would be a more reliable, long lasting option evidenced by the performance of ocean cable for the telecommunications business. To date two new companies have been persuaded. ConocoPhillips installed the CGGVeritas system on the Ekofisk field and at least four repeat surveys have been conducted. Meanwhile PGS is in the process of setting up a life of field seismic system for the Petrobras Jubarte field offshore Brazil.
Jubarte plan: what the PGS OptoSeis PRM system will look like.The debate over PRM technology is of course much more nuanced in the sense that companies have to be convinced that it is worth gambling on existing equipment when, in a technology driven business such as seismic, something better will almost certainly come along sooner rather than later. Then there must be the nagging feeling that retrievable OBS systems and/or increasingly sophisticated broadband-based towed streamer techniques are perfectly viable and cheaper options.
PRM advocates argue that it does not take many repeat surveys for the permanently installed system to end up cheaper than conventional 4D seismic monitoring surveys using towed streamers or conventional OBC. The trouble is that capital outlay is all upfront requiring the oil company to take a long term perspective when the outcome is by no means clear cut. Nor does money upfront suit asset managers who are under pressure to show return on new investments over a very short period, and have no incentive to leave the benefits and kudos accruing for their successors on the project.
Life of field surprise
Given the circumstances, a real turn up for the book this year has been the award of two LoFS cable system contracts to OYO Geospace, supplier of the seabed cable to all the BP projects.
Most recently Statoil, which has partner knowledge of the Valhall project and has extensively tested fibre optic systems, initiated what should evolve into a major PRM contract for the Snorre and Grane fields offshore Norway. Assuming all the pre-award conditions are met, OYO Geospace will be supplying 600km of cable worth $160 million over three years. Earlier in the year OYO Geospace won a $14.9 million contract from the BC-10 Consortium offshore Brazil, operated by Shell, to provide over 100km of cable for the field’s proposed deepwater (1700m) PRM system.
Placing the nodes Fugro style.OYO Geospace won these contracts against competition from other conventional OBC and fibre optic tenders, which has to be a major feather in its cap. But it does not resolve the technology debate and probably complicates it. Post tender feedback suggests that the oil company clients were persuaded by track record, price and how rapidly the equipment could be manufactured and supplied.
More interestingly there is an impression that oil companies may be becoming less fixated on the reliability of the system over the life cycle of an oil field, ie it is unrealistic to expect perfection over such a long period and interventions are probably inevitable. It is said that all PRM systems in place have experienced problems which in a way is what you would expect.
This is why the flexibility and lower initial cost built into the FairfieldNodal PRM system may attract some interest. It would be based on a spread of proven Z3000 deepwater autonomous (battery powered) ‘optical nodes’ from which recorded data can be extracted ‘optically’, no cable required. The nodes can effectively be switched on and off as required to preserve battery life and can remain on the seafloor for an estimated 3-4 years. Meanwhile ROV deployment/recovery operations mean reduced installation costs, flexibility in the spread design, plus ease of maintenance, repair and potential upgrade.
Of course we should not get too excited by the addition of this PRM option into the mix. Experience suggests that it may only serve to prolong understandable but nonetheless frustrating oil company indecision. OE
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