Page 43: of Offshore Engineer Magazine (Jan/Feb 2013)

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Geology & Geophysics G&G Notebook G&G Notebook G&G Notebook

Andrew McBarnet

Planning on a better future

If there was such a thing as an For the marine seismic business Africa and the continued ramp annual horoscope for the marine major increases in capital up in activity levels in frontier

I seismic and related geophysical expenditure do not necessarily markets including Iraq, Colombia businesses, then in the coming translate into good news. It can just and Southeast Asia are said to be year we can expect at least some mean that oil company dollars are contributing to the year-on-year improvement on 2012. In other primarily focused on development growth.

words, unless there is some totally projects rather than exploration, It’s the small print from the unexpected destabilizing economic, which is frustrating. However, review which makes the best political or other in? uence which Barclays brings some cheer on this reading for geophysical services confounds even the best astrologer, front. It reports that the supermajors companies. The outlook for the we can probably say that the marine are basically back in the game after economics of exploration mostly seismic community will see a a period of relative abstinence – improves for 2013 versus 2012. steady ? ow of orders, tightening of their 2013 spending is expected International exploration economics vessel availability and ? rmer prices. to increase globally by 9%, led continue to be viewed best among The precondition of any by active drilling and exploration the regions in the Barclays survey, optimistic scenario is the prospect programs from Chevron (up 17%) with 75% of companies believing of signi? cant E&P spending, and ConocoPhillips, Shell, Total that the economics for 2013 would and in that department the stars and Exxon (all up by more than be ‘excellent’ or ‘good’, up from appear to be aligned. The widely 5%). 68% in the last survey. The outlook quoted Barclays Global 2013 E&P in the US also improved, and the

The precondition

Energy Spending Outlook certainly percentage of companies which seems to think so. It suggests that responded ‘excellent’ or ‘good’ of any optimistic global exploration and production moved up to 84% from 57%, while scenario is the spending is set to reach a new Canada did not fare so well with record of $644 billion in 2013, up regard to its exploration prospects. prospect of 7% from $604 billion last year. What seismic companies really signi? cant E&P

Markets outside North America are want to hear is that E&P companies the main driver, forecast to reach an are expecting service prices to spending.

unprecedented $460 billion, a 9% increase in 2013 with nearly a third increase on the 2012 expenditure. Barclays attributes these high of respondents indicating they Sustained high oil prices, the spending levels by the supermajors anticipate higher prices across all sanctioning of major projects and to years of ? at spending and product lines compared to only the delivery of a large number of under-investment in the early to 10% of companies who expected offshore rigs in 2012/13 are cited mid-2000s, resource nationalization higher pricing last year. Elevated as key factors with the increase resulting in the expansion of levels of utilization will drive prices spread to almost every country deepwater drilling activity higher internationally across the with hydrocarbons to exploit. The (particularly in Brazil and West full array of service and equipment exception is North America which Africa), and the need to ? nd and product lines, Barclays believes. has been impacted by the replace large pockets of reserves The icing on the cake is the over-enthusiastic production of and increase production. Active favorability rating of geophysical shale gas and the resultant decline exploratory programs in emerging applications in E&P. It is not in gas prices. offshore markets in West and East a surprise that for the ? fth oedigital.com January 2013 | OE 45 oe_G&G.indd 45 03/01/2013 13:38