You are Home   »   News   »   View Article

Insight: a small black cloud?

Friday, January 3, 2014

What should we make of this, a recent article discussing the forward projections of a number of seismic companies?

They (TGS, PGS, Spectrum, CGG etc) all seem very nervous suddenly: the article points to reducing capex and improving margins but I wonder of oil & gas companies are getting nervous about big, expensive dry holes in deep water?

Or perhaps their investors are more generally nervous about investment in exploration? As opposed perhaps to putting their money in Tesco, Sainsburys, House of Fraser, Amazon etc!

Why would that be?

Well, we have to admit that explorers have not exactly covered themselves in glory over the last couple of years…..

1. ‘Mature’ NW Europe, whether in the North Sea or onshore, has had a dismal exploration record.
2. There have been several high profile failures in new ‘Frontier’ basins, for example offshore French Guiana, Brazil, Namibia…
3. The costs of offshore, especially deep water, drilling have ‘gone through the roof’.
4. Development projects - of those discoveries that have been made - are increasingly seen as being behind schedule, overrunning budgets and not delivering the promised production.

Perhaps investors see the queues at supermarket and department store checkouts, and the scale of one of Amazon's warehouses, as providing better eveidence and better places to invest?

Are we at a nodal point – one of those moments that in hindsight will be seen as the beginning of a cyclical downturn in the exploration business and therefore in the fortunes of seismic companies?

Author: David Bamford
Company: Petromall


Join 10,000 oil & gas professionals who attend our events and receive our newsletter.

FEATURED VIDEO

Geo-politics of the South China Sea region
by Ben Cahill from Energy Intelligence


"The broad range of subjects presented and the opportunity to discuss key aspects with interested parties."

Robert Trice (Hurricane Energy)

KEY SUPPORTERS

We are planning a further webinars program for 2024 -
If you may have an interesting story to share, please contact
Karl Jeffery on jeffery@d-e-j.com