ION/BGP JV is off to a fast start

In October 2009, ION Geophysical, one of the world’s largest seismic equipment manufacturers, and BGP, the world’s largest land seismic company, announced that they were forming a joint venture (JV) that would focus on manufacturing land seismic equipment for the geophysical industry. It made sense, they said, because ION needed the ability to test its new technology in the field, and BGP needed access to the latest technology.

Fast-forward a year, and it is obvious that the JV has been taken seriously. In March 2010, the two companies launched INOVA Geophysical, the new manifestation of the JV agreement. Within a few months, INOVA had several offices around the world and employed nearly 400 people.

The structure of the company is as innovative as the products it sells. BGP owns 51%, and ION owns 49%, but INOVA has its own management team (made up of former ION and BGP employees), its own locations and headquarters, its own board of directors, and separate management processes. “We are independent to make INOVA a success and a key player in the land seismic business,” Steve Bate, president and CEO, said.

But it can rely on its parent companies for guidance. Bob Peebler, who now serves on INOVA’s board of directors while serving as CEO of ION, said, “By combining forces with the world’s largest land seismic contractor, we will be providing INOVA’s technical team with direct access to the expertise, insights, and global operating footprint they require to design and deliver geophysical instruments that are the most reliable, efficient, and cost-effective in the marketplace.”

The company’s portfolio includes energy source and source control systems, land seismic recording systems, and digital multicomponent seismic sensors. These products are available to all land seismic contractors.

The benefits of having famous parents, according to company literature, include:
• Combining the strengths of its parent companies – ION’s history of innovation and BGP’s history of operational excellence;
• Rigorous field-testing of products by BGP in diverse operating environments around the globe to ensure product quality and reliability;
• Capturing economies of scale in the supply chain and in customer support, helping to lower the cost position of its land technologies and improve the field experience of its customers; and
• Combining the footprint of the parent companies to ensure INOVA customers receive the support they require regardless of deployment location.

The name “INOVA” was chosen to reflect the company’s history of innovation within the seismic industry. INOVA’s parent companies have introduced a series of pioneering innovations to the seismic business, including the world’s first network telemetry acquisition systems, the world’s first micro-electro-mechanical-based multicomponent sensor, and the world’s first cableless multicomponent recording system.

Corporate strategy
INOVA has headquarters in Stafford, Texas, and Beijing, and it also has development centers in Edinburgh; Calgary; Richardson, Texas; Ponca City, Okla.; and Zhuo Zhou, China. Additionally, it has regional sales support offices in Dubai and Moscow. The purpose of this global presence is to be where the customers are.

“When we’re selling to customers, when we’re supporting them, and when we’re engaging them about what they’d like to see in the industry, we want to make sure that happens where they are, not out of one of our headquarters,” Bate said.

He added that he wants customers to have the same INOVA experience regardless of which office they are interacting with. “I’d like the customer experience to be very consistent and very much the gold standard in the industry,” he said.

The company already has had success in the field, but Bate also points to the relationship with BGP as a success story.
A team of senior executives visited China recently and met several of BGP’s operating companies.

“It’s what highlights the benefit of having BGP as part of the JV,” Bate said. “We got a chance to visit not only as a customer and as an equipment provider but also as partners. We could take the sales dynamic away from the conversation and just share what was good and what was bad and what we need to do to make our products more usable.

“It’s clear to me that leveraging the DNA from both of our parent companies is going to make INOVA unique in the industry.”

Technical innovation
INOVA inherits a stable of innovative products from ION as well as from Aram, which ION acquired in 2009. This includes FireFly, the world’s first cableless system for multicomponent land acquisition; Aries II, a rugged and reliable cable-based system for land and transition zone; and Scorpion, a land acquisition system that features a flexible and scalable architecture.

Additionally, the company has a complete portfolio of sources and source controllers such as AHV-IV Vibroseis vehicles, ShotPro and VibPro source control systems, and VectorSeis.

Already the company has provided FireFly units to a contractor working in the Marcellus shale in the US. Fernando Hernandez, marketing director for INOVA, said the company supplied about 6,000 stations.

“It was a prime spot for FireFly because the topography was really difficult to access, there was a lot of farmland, and we were shooting through a town,” Hernandez said. “Getting permits is an easier task when you can place a wireless box in a small spot on the farm rather than laying a big batch of cables.”

He added that the VectorSeis technology in FireFly, which records shear as well as compressional waves, will provide additional help in characterizing fractures.

Bate said that one of INOVA’s challenges will be to continually improve and maximize its technology offerings.“Our main focus in the near term is to make sure that we get the best features in our systems,” he said. “FireFly is still an evolving system, but we’re making a lot of progress.” He added that his development centers are working on ways to add the best features from Scorpion and Aries II.

“If people have a preference for Aries II, they still get some of the benefits from that product line now being part of INOVA,” he said.

East meets West
Blending the cultures of North America and China cannot be easy, but Bate thinks it gives his company an advantage. “The industry is becoming more global, and I think that having this cultural diversity will help us serve our customers better,” he said. “Bringing the people and the experience sets together really differentiates INOVA from the other players in the industry.”

For more information, visit www.inovageo.com.