Recently SCAN Geophysical announced a new 3-D survey for Chevron offshore Venezuela, the seismic company’s first foray into the Americas.

This might not seem like breaking news, but it is unique because a mere 4 years ago this company was just getting started. Within that period it has ramped up from zero vessels to six and counts some of the largest oil companies in the world as its clients.

Let’s rewind to 2002 for a moment. Most folks in the seismic industry would probably rather skip this exercise, but hopefully a temporary trip down memory lane won’t cause them to wake up in a cold sweat in the middle of the night. Quite frankly, 2002 was a rotten year. Oil prices were starting their meteoric rise, but nobody was exploring for anything new.

Geophysical contractors wondered how many more lean years they could survive before business came their way.

For Lars Johan Frigstad, formerly with PGS, this was the perfect time to start a new company, developing a new shallowwater seismic concept. He formed SCAN in 2002 with the thought of pursuing this concept further, but by 2003 it seemed prudent to get into the deeper water marine streamer market as well because, Frigstad said, it’s a more liquid market. The company launched a 2-D vessel in 2005 and a four-streamer 3-D vessel in 2006.

The plan obviously was a good one, but in 2002 it must have seemed rather risky. I asked Frigstad if he was optimistic that the market would turn around. “I was not as pessimistic as the rest of the market was,” he said. “To me it’s quite obvious that you should make investments or start up new things when the market is down. I wouldn’t go into the market today and start up a new seismic company.”

A couple of reasons make this decision sound. First of all, mergers and acquisitions in the late 1990s eliminated several major companies from the contractors’ client lists together with limited exploration and production (E&P) budgets caused by the low oil prices. The dramatic drop in E&P spending was an overreaction, and the consolidation paved the way for smaller oil companies to start up.

Secondly, equipment costs have soared in the last years, and in fact Frigstad said there is up to 2-year backlog between the time one orders new vessels or critical geophysical components and the time they’re delivered. New vessels ordered today will not be delivered until close to mid-2009.

The company will compete in the larger survey class with three new 3-D vessels equipped for eight-streamer operations, but it is also targeting mid-sized 3-D surveys. In general, the total number of streamers used on a given survey will also reflect the size of the survey. “If you want to paint a very small dollhouse, you don’t care so much about having a broad brush,” Frigstad said. “But if you’re going to paint your children’s school, you would want a larger brush.

“It’s the same in seismic. If you have small surveys, it doesn’t make sense to use large vessels.”

This doesn’t necessarily tie SCAN vessels to smaller seismic areas. Lease blocks in places like the North Sea, the Gulf of Mexico and offshore Brazil are all different in size, meaning that vessels configured with numerous streamers often are too large (and expensive) for the job. SCAN also offers services in the high-end 2-D market, providing 2-D vessels equipped with state-of-the-art equipment and streamers that can be as long as 39,360 ft (12,000 m), coupled with large-volume air gun sources. This includes a new and “to be rigged” 2-D vessel scheduled for release during spring 2007.

This vessel will also be the most modern 2-D vessel in the current seismic vessel market since it was built in 2002. SCAN will also compete in the three- to six-streamer market with Geo Searcher, SCAN Stigandi and SCAN Resolution.

The shallowwater concept hasn’t been abandoned, but SCAN’s success will continue to depend on its ability to keep up with its competitors, some of which are much larger companies. “We went from zero vessels to six in a couple of years, so we’ve been quite expansive,” Frigstad said. “But we prefer doing the things we do and doing them right, one step at the time.”

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