A CGGVeritas vessel works on wide-azimuth operations in the Gulf of Mexico. (Photo courtesy of CGGVeritas)

Of all of the business models tried on by geophysical contractors over the years, the non-exclusive or multiclient model may be the most controversial. It can work very well, and, in the case of the late 1990s, it can work very badly.

But one thing is certain — when oil companies are exploring, multiclient surveys are a very good idea indeed.

The concept is simple — rather than shooting a survey for a single client, which then owns the data, a contractor shoots a survey with several customers in mind, some of which may even pre-fund the survey, ensuring the contractor at least some return on investment. The contractor owns the dataset, meaning it can be re-licensed over and over. This makes particularly good sense in areas like the Gulf of Mexico, where leases expire and get re-leased to new operators.

So in an environment of sustained high commodity prices and a growing dearth of drillable prospects, multiclient is back. With a few notable changes.

The drivers

Even when demand for geophysical data was at an all-time low, contractors didn’t stop innovating. The result is data quality unrivaled in previous years.

“Years ago people would take the data as it was delivered to them at face value and go off, bid on their lease, buy their lease and drill it,” said Marc Lawrence, senior vice president and division manager, data licensing, for Fairfield Industries. “The problem then was that multiclient data was processed middle-of-the-road. There’s a spectrum of opinion as to how data should be processed, so we had to take the middle-of-the-road approach to please the most people.”

In years past an operator might license the multiclient data to get a “first look,” then shoot a proprietary survey over an area of interest to get finer detail. Today’s multiclient data is often enough for that further evaluation. “We’re seeing a lot more clients using the data not just as an exploration tool but also at an early stage of appraisal and development,” said Mark Gibbons, multiclient asset development manager for WesternGeco. “In the past they may have gone on to do a proprietary shoot. Now they’re frequently spending more time with the multiclient data before they go to the next stage.”

Another area of significant improvement is in data processing and reprocessing. Even very old datasets can be attractive to operators if they’ve had the latest algorithms applied. At Fairfield, having a massive database that is constantly being reprocessed has led to continued advances.

“Our processors have our entire database to play with while they’re developing software,” Lawrence said. “They will make a breakthrough on some small, seemingly insignificant thing and then start incorporating it. All of these little things make the data better.”

The result, he said, is that the data that was shot in 1990 sells at the same price as the data being shot today.

For Luc Schlumberger, senior vice president of United States and South America data library, Western Hemisphere, for CGGVeritas, processing plays a key role in a viable data library. “Along with acquisition breakthroughs like wide-azimuth, the most critical portion is in processing and the work going into research to extract the maximum value from this research,” he said. “There is a need for new advanced processing tools across the chain — multiples, migrations and model building.”

Another driver is a continued interest in new areas. In the past, multiclient surveys worked best in places like the Gulf of Mexico, where the leasing situation was transparent and the blocks were relatively small. Contractors who tried to extend that model to Brazil in the late 1990s found the less predictable leasing cycles made it more challenging, but still a good business, and CGGVeritas along with others are still acquiring multiclient data in Brazil. Luc Schlumberger said his company has been investing in different projects, including the data around the Tupi discovery, in the Santos and Campos basins as well as at the mouth of the Amazon River, a very challenging environment. These surveys, he added, are not truly multiclient because they’re funded by one client, but CGGVeritas retains ownership of the data. The rules in Brazil change from one licensing round to the next, but typically an operator has a set period of time to conduct a drilling program and then has to relinquish part of the block. So future data sales are almost guaranteed.

TGS-NOPEC has long had success shooting 2-D multiclient in very frontier areas, including a new area of the Gulf of Mexico that’s only recently opened up for leasing. “It’s a virgin area, and there’s very little data of any sort that’s ever been shot there,” said John Adamick, vice president of business development for TGS. “Our logic was to shoot a regional 2-D grid. We expect some 3-D to follow on top of that.”

Other areas of interest for 2-D include the North Sea, Africa, Indonesia, Russia and Greenland, he said.

GX Technology, a subsidiary of ION Geophysical, is taking the model in a different direction with its BasinSPAN programs. The concept combines ultra-long offset 2-D data with basin modeling and other analyses to offer a truly regional view of an area. “Most companies will shoot some seismic, process it and hand it over to the customer,” said Ken Williamson, senior vice president of Integrated Seismic Solutions (ISS) at ION. “Ours is more of an end-to-end product. We are trying to help our clients look at basin-scale features, including source rocks, migration pathways and sediment fairways.”

He added that different companies have different philosophies when it comes to regional geology. Some won’t even bid on a block without a regional context, while others seem content with the structural detail provided by conventional seismic. This latter approach is changing as more companies reconsider the benefits of tying their existing seismic with regional studies.

So far GXT has shot SPAN surveys in the Gulf of Mexico as well as offshore Africa, India, South America, the North Atlantic and the Arctic.
PGS is finding the multiclient model to be truly international at last. “We’re focusing on all of the main areas for E&P — Brazil, the Gulf of Mexico,
the North Sea, West Africa and Asia-Pacific,” said Tom Ziegler, vice president Global Multiclient for PGS. “We increasingly find that there is more
we can do in near-field exploration. Companies see the advantage in having comparatively cheap new data to step out from existing fields.”

Finally, a big driver for multiclient is simply the clients’ willingness to pay for it early. In the past contractors often had to shoot surveys with little or no pre-funding just to keep their crews and vessels working. Now many contractors have pre-set requirements for funding — at PGS it’s 50% to 100% for a major 3-D survey – and most are confident that their data will have a long shelf life.

“With our data library in all the key basins worldwide, including the Caspian Sea, we have the capacity to design a project and to understand why it could be successful to consider going out on our own,” Schlumberger said. “But that does not fit our disciplined business model. And why would we do that when funds are available?”

What’s new

What can clients get in a multiclient survey that they couldn’t five years ago? Two main answers: wide-azimuth seismic and electromagnetic data.
Since BP and CGGVeritas shot the first wide-azimuth survey over the Mad Dog field in 2004, the technique has taken off like wildfire. It was not long before this proprietary technique, which is hugely expensive as it involves so many vessels, lent itself to a multiclient approach. Now most of the major towed-streamer contractors are shooting highly pre-funded yet ambitious wide-azimuth projects, mostly in the Gulf of Mexico.

This makes sense because the wide-azimuth technique, in which the same target is imaged from multiple directions, is particularly useful in subsalt settings. Other possible applications could be offshore Angola and the Niger Delta, Ziegler said.

Schlumberger said the acceptance of wide-azimuth is amazing. “Is it a new technology? I don’t think so,” he said. “It’s a new methodology, and there are different factors that help the industry accept that. And they’ve accepted it extremely quickly.”

This has enabled the major contractors to begin massive surveys. WesternGeco has more than 900 blocks of acquisition to date spanning from Garden Banks and Keathley Canyon to the far northwest of Green Canyon. In addition, WesternGeco has just started a partnership with TGS to shoot another 650 blocks in Mississippi Canyon. CGGVeritas has two projects, one in Walker Ridge, about 476 blocks, and another in the Garden Banks/Keathley Canyon area, which is 650 blocks. PGS has Crystal 1 and 2, covering a total of 570 blocks, with Crystal 3 in the pipeline.

Electromagnetics (EM) has also taken off in multiclient surveys. In addition to the two main contractors, EMGS and OHM, most of the seismic companies now have an EM component — WesternGeco’s Electromagnetics division, through their purchase of AGO and more recently Geosystem, operates Controlled Source Elecromagnetics (CSEM) and Marine Magnetotellurics (MMT) on a global basis, with MMT currently being employed to help improve and constrain challenging salt-body interpretation in the Gulf of Mexico. CGGVeritas owns 15% of OHM, and PGS recently bought a company called MTEM, which does land and marine magnetotellurics.

EMGS is beginning a large survey offshore India which will be made available to operators participating in the 7th New Exploration Licensing Policy round (NELP 7). The company also plans surveys in the Norwegian sector as well as Ireland, Greenland and Brazil.

EM surveys provide a different kind of data than seismic since they’re looking for resistivity, not reflections. As such, they can often indicate the presence, or lack, of hydrocarbons in the subsurface.

OHM is active in acquiring multiclient data as well. Not only does it have access to CGGVeritas’ vast seismic data library, but it also owns Rock Solid Images, which has a large global database of well data complete with rock physics processing. “We use that to design surveys,” said Dave Pratt, chief executive officer of OHM. “It gives us a big advantage and helps us shoot non-exclusive surveys with the right parameterization.”

Pratt added that EM surveys can have a shorter shelf-life than seismic surveys. “The big difference between EM data and seismic where we’re using the EM as a direct hydrocarbon indicator is that we’re much closer to a yes-no answer on the seismic data, and once we map a particular prospect and show there’s something or nothing in that prospect, then the race is run,” he said. “Because of that, we need to recover our revenues on a smaller number of sales, and we also need to get significant pre-commitment before we shoot because it’s risky.”

This level of discipline could, perhaps, also fall into the “what’s new” category. But the current frenzy in the geophysical market has already spurred a flurry of new vessel orders, which could potentially result in the same overcapacity issue that plagued the industry a decade ago.

“The industry will always overbuild,” said Adamick. “That’s my belief. That can be done in a gentle fashion, or it can be a massive overrun.

“Over the last several years ships have been built because they’ve been needed, and we’re trying to catch up with the demand in exploration. The ‘soft’ landing scenario is that exploration keeps moving on up and we build boats and we gradually reach a balance. The naysayers believe that at some point we’re going to be building up and exploration will taper off, and we’ll get a double whammy. But it’s hard to see that right now.”

Regardless of that potential outcome, operators will have better data than ever before, in more parts of the world, with which to conduct their treasure hunt.