Geophysical contractors are starting to take tentative steps in a variety of new business directions.
Somewhere in the course of my career I have become mistaken for a person who can prognosticate intelligently about the fate of the seismic industry.

Let's face it - if I had that kind of crystal ball, I probably would be out playing golf or getting a facial rather than writing this column right now. But I do have some ideas. In fact, my canned statement of late has been this: I think the seismic industry will have a resurgence, but when it does it won't resemble anything that's come before it.

Gone are the days when oil companies clamored for 3-D seismic data and helped fund multiclient surveys to get it. Gone are the days when the Gulf of Mexico looked like a marina as seismic vessels jockeyed for position to shoot the sweet spots. For the past couple of years, that data has, in many cases, collected dust on library shelves and begun to weigh down balance sheets. The contract market, which once represented the bulk of a geophysical contractor's workload, dried up considerably during the late '90s and has only recently begun a resurgence.

A quarterly earnings report from Veritas DGC nicely sums up the factors that can adversely affect the solvency of these companies:

• Expectations for commodity prices and their influence on levels of capital spending by oil and gas companies;
• The impact of weak demand and/or technological obsolescence on the data library;
• Intense competition;
• High fixed-cost structure;
• Seasonal weather and other quarterly result fluctuations;
• The ability to attract and retain key personnel;
• Currency fluctuations and other risks of operating in foreign venues; and
• The hazardous conditions inherent with many operations.

Over the years companies have exhibited approaches that attempt to minimize one or more of these risks. For instance, incredible amounts of cutting-edge technology have been thrown at multiclient products to differentiate them from the competition. Some companies have carved out a specific geographic or technological niche to set them apart from the crowd. Some companies have chosen to contract vessels rather than owning their own to reduce their capital overhead. Many companies have pulled out of risky foreign markets, and most have active training and recruiting programs.

But throughout the industry there seems to be a gnawing feeling that none of this is quite enough, that a more complete overhaul might be needed to get the sector back on its feet again. For some companies, this overhaul will probably include moving away from pure exploration and providing more focused, production-oriented surveys.

"While the surveys that we do in the future will become smaller because they're focused on specific reservoirs, they'll also become more custom-designed surveys," said Dalton Boutte, president of WesternGeco. "Spec surveys will no longer be adequate to solve the kinds of problems our clients have."
In a similar vein, the new company formed through a joint venture between Baker Atlas and CGG, called VSFusion, seeks to integrate the benefits of borehole seismic with other reservoir disciplines as well as to enhance surface seismic resolution. Bob Hardage of the Bureau of Economic Geology at the University of Texas sees companies like VSFusion as trendsetters in their ability to take seismic acquisition, processing and interpretation to the next level.

Hardage said borehole seismic will become an essential part of most future energy exploration and exploitation programs. "Depth-based geology will still have to be calibrated to time-based surface seismic data, reservoirs will still need to be imaged and characterized in detail and fluid movements will still need to be monitored over calendar time," he said. "[Vertical seismic profiling (VSP)] offers valuable assistance in all of these areas."

Additionally, borehole seismic has the ability to support surface-based multicomponent seismic technology, which Hardage believes will be the business driver of future seismic services. "The result will be that geoscientists will begin to rely on VSP to help them apply seismic stratigraphy principles to images provided by the full elastic wavefield rather than to limit this valuable science to information provided only by [compressional] waves," he said.

I think we'll see more of these types of new directions surfacing in the months and years to come. A healthy seismic industry is important to oil and gas exploration and development, and I think we're now past of the point of hand-wringing and finger-pointing and are beginning a journey that holds the promise of some truly ground-breaking innovation. I, for one, plan to enjoy the ride.

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