Company Focus

Seismic Australia Set For Growth

As part of Fugro's continuing global expansion, the group acquired Perth-based seismic contracting company, Seismic Australia, in late 2000. Seismic Australia's Managing Director, Don Pyke, commented in a recent interview with PESA News that the decision was designed to see the company developed to its full potential.

"Seismic Australia was established in 1996 as a partnership between myself, Jan Ostby and Odd Arne Larsen", commented Pyke. "We all had previous experience with large seismic contractors – Jan had come to Australia essentially to establish the business for PGS Nopec, Odd had been with Geco-Prakla and later PGS Nopec, and I had been the Financial Controller at PGS Nopec."

Pyke said that when PGS sold off their 2D business to focus on the growing 3D element, there was some uncertainty as to what was going to happen with their Australian operations in which all three were employed.

"The indications from PGS headquarters were that they were getting out of the 2D business on a worldwide basis", said Pyke, "and that made us wonder what that would mean for us – whether we would be sold to a competitor, or if that side of the business would be closed down."

Rather than waiting for the company decision that would decide their futures, Pyke, Ostby and Larsen capitalised on the opportunity and started their own business; thus the inception of Seismic Australia in March 1996.

"We looked closely at the Australian market and thought that it was not as mature for 3D data as PGS was encountering in other parts of the world. We thought that the 2D business in Australia was still going to be viable and very productive", stated Pyke.

Seismic Australia set out with a focus on the Australian exploration scene, to provide new 2D data or improve existing 2D data over gazettal rounds, and in five years the company has achieved considerable growth.

"We achieved a good level of success, which was due to our early identification of the exact parameters under which we were going to work. Firstly, we had to improve data to such a significant level that people would see the benefit in having new data rather than old, which went hand in hand with developing the perceived prospectivity of the frontier basins", Pyke said.

"The first project we undertook was a substantial reprocessing project in the Exmouth Basin. From what was historically a standard size 2D seismic project, we were suddenly looking at reviewing the whole basin. We thought that if we improved the data quality we could improve the beliefs historically associated with the basin, because a lot of people walk around with ideas that were developed 15 years earlier, working off older data", Pyke explained.

Seismic Australia worked from old data but also acquired new data as required. "We have acquired nearly 40,000 km of new 2D data in the areas where there's been a lack of data, or where the data was of such poor quality that even by applying the best processing sequences and modern techniques, it just couldn't be improved to a quality that can image the prospective region in the section."

The company differentiated themselves from others in the marketplace by providing a value added feature. Pyke explained: "Although we sell the data, we see that we really sell the acreage. If we can't show people why they should be exploring in an area, they're not going to buy the data."

Whereas other companies focussed primarily on selling data, Seismic Australia considered a new approach, establishing partnerships with vessel operators and other associated companies.

"We set ourselves up as a seismic project designer, manager and marketer rather than a broker. We have full or part ownership in virtually all the projects we're involved in, which means we're involved in all stages of the project. That's important to us, because it's what we bring to the table. We don't have a massive processing centre and we don't have vessels for acquisition. What we have are the ideas and concepts, and the ability to ensure they function smoothly in a multi-client environment", Pyke said.

While Seismic Australia started off creating projects in the 2D arena, that role expanded when they joined up with Geco-Prakla (now WesternGeco) on 3D projects. "In those days it was a really competitive market for 3D vessels, and they were looking for any advantage that would give them some sort of foothold in Australia. They saw using our strengths as an opportunity to do that, and it's been a good relationship", Pyke explained.

"We have a lot of data and knowledge over most of the basins in Australia", he continued. "So when WesternGeco wants to shoot some 3D our niche is to look at the geological risk using the data that is available. We have a substantial database and so it's a good fit."

Seismic Australia has now been involved in a number of 3D projects, including surveys in North Browse and, currently, the Adele Trend, with WesternGeco.

Within four years of the company's inception, the directors were starting to consider projects outside of Australian waters. "Our map very quickly started to fill up over the major basins in Australia. There are some frontier basins opening up now that we're also active in but, after about three and a half years of operations, we could see that we'd done a significant amount of work in Australia and there were going to be less opportunities that were likely to come up in the future years."

"There's an exploration cycle that takes place, and we're at the stage now where we're seeing drilling results from blocks in the Browse Basin", Pyke explained. "We repro-cessed data over the basin in 1997-98 and, three and a half years later, we're starting to see some of the drilling happening. From there, there will be relinquishments, and then we'll see another phase. But in the meantime we recognised that we were looking at a market which was diminishing in size for us because of the work we'd done."

However, Pyke asserted that the company still considers Australia their prime market. "Australia is still very much our core market and will remain so. But after looking at other markets, we wondered if we could replicate what we do in Australia in other markets, hence we looked at Indonesia and started some small projects there, and now have projects in Norway, Brazil and New Zealand."

The company faced new challenges with each new market in the international arena. "Each country had its own legislation, archive system and level of development and exploration", Pyke reflected. "Indonesia was one of the first areas the company expanded into because of its proximity to Australia. It was, and still is, regarded as a prospective area. However, shortly after we commenced our first two projects there, the Asian crisis occurred and, subsequently, the country is taking more of a back seat at the moment," Pyke added.

"Unfortunately, there hasn't been acreage released over the areas we have reprocessed data, but there are indications this may occur sometime this year."

Seismic Australia targeted Brazil after the monopoly of state oil company, Petrobas, was broken and a databank established, making access to open file data possible. "On top of that, Brazil was a hot area – there was a lot of data required over there, which meant there were a lot of active companies looking to get a position in Brazil. And a third factor in Brazil's favour was that it is one country, with a big shelf area and a large coastline that presented opportunities for a variety of projects."

Seismic Australia has three projects currently underway in Brazil, with a fourth awaiting approval. The first two projects (the Grand Santos and Campos) were large – around 20,000 km each, and the third, in North Brazil, will be about 35,000 km.

Management has targeted main conferences in the region, such as AAPG and EAGE, along with regular trips to Brazil, the USA and Europe, in order to market the company. "The concept of Seismic Australia Brazil is something that has taken a while for people to come to grips with", he said with a laugh. "We considered changing the name for operations in that region, but there have been cases where people we deal with in Australia have been talking to sister companies in Brazil and have been able to confirm the quality of our work."

Projects in Norway are not as advanced as those in Brazil, and the company is now using Jan Ostby's and Odd Larsen's familiarity with the region, along with its relationship with Fugro, to its full advantage. Seismic Australia is currently reprocessing original 2D data in preparation for the mid-Norway 17th Round, coming up in July/August this year. The company will assess their success with these 'pilot' projects before deciding their course of further action in the region.

While work in New Zealand was not a priority when Seismic Australia first took on international projects, Pyke believes the area has the potential to be a good market for them. The company recently commenced its first New Zealand project in the Taranaki Basin.

The option of a Fugro takeover presented itself in 2000. Ostby, Larsen and Pyke had not intended to build the company to a position where it would be an attractive takeover target, instead seeking to expand the business further. "We were looking at a way to expand into international areas sooner rather than later, and that was going to take extra capital and extra people", Pyke said.

"We didn't put out a 'for sale' sign. We looked at a variety of options such as merging with other companies, or a takeover, but we were always mindful of our desire to maintain our structure in some capacity, so we weren't swallowed up and spat out all around the world", Pyke said.

"Once we were in touch with Fugro it became clear there were certain benefits to each party. For us, it was the opportunity to have access to a greater network of people, resources and capital. I think Fugro found the fit appealing because they had a hole in their seismic market coverage around Australia and Asia, which was where we had developed our business and were strongest."

The decentralised nature of Fugro's operations also incorporated well with the plans for Seismic Australia. "Apart from our ownership structure, this company is virtually no different than it was six months ago", Pyke said. "The day to day operations are virtually the same, with the exception of some additional reporting requirements you would expect as part of a larger group, and some additional management issues. Fugro recognised the strengths of Seismic Australia and didn't intend to make massive changes, because that wouldn't have generated the best result for them as the new owners."

"At times, we have to consider how our projects relate to other companies within the Fugro group, however, we were determined that we wanted to look after the interests of our partners, who we have had good working relationships with, as well as the new owners in Fugro." To date their partners have included WesternGeco, Robertson Research, Greville & Associates, Gardline Surveys and various government agencies.

The Seismic Australia office has expanded slightly since the Fugro takeover and now has a staff of nine, including six technical staff. The technical team comprises Jan and Odd, Michael Davidson, Ben McVeigh – as geophysicists, Lynda Butters, the marketing and geophysical assistant, and Paula Norton, who is taking on a new role within the company as Technical Assistant.

In addition to the international projects, Seismic Australia is currently involved in a number of projects in Australia for the 2001 gazettal round. Although there is heavy use of 3D in the Australian region, Seismic Australia remains focussed on the 2D side of the business and on improving data quality. "It's our primary business line", said Pyke. "Where there's the opportunity to acquire new data, we do. We're currently acquiring new seismic in the Otway/Sorell basins, primarily because we believe it is a prospective basin with a lack of data, and also because we reprocessed some of the earlier data and believe it was justified. The recent drilling results such as Woodside Energy and partner Origin Energy's Thylacine-1 discovery in T/30-P will also enhance interest in the area."

The 3,500 km Otway/Sorell basins survey is being acquired using the Fugro Geoteam vessel GeoArctic. The survey is on track for completion by the end of June 2001, and is expected to be processed by Robertson Research for delivery in late September.

"Other projects within Australia include reprocessing the Swell-Baylis 3D surveys in the Carnarvon Basin. These surveys are in an old WAPET permit, located northeast of the Woodside permit (WA-271-P) where there have been three major discoveries. It's a good location, and the primary data is indicating some good potential exists", Pyke said.

"On top of that we're reprocessing 2D in east Browse, and we're involved in marketing the new 3D in the Adele Trend, which has been acquired by WesternGeco over a lot smaller area around the Adele well and up to the Inpex WA-285-P permit. The 2D is more a regional grid over the entire east Browse acreage. Obviously the Greater Brewster area discoveries by Inpex adds some interest to the project", Pyke continued.

"Houtman Basin is another project for the 2001 gazettal round. There is a lack of data in the deepwater area, and we have a proposal to acquire some more data there." The reprocessing project involves nearly 15,000 km of data, and is being carried out in conjunction with Robertson Research and Greville & Associates.

In an earlier project in the Great Australian Bight, Seismic Australia worked with AGSO to acquire about 8,500 km of data. The timing of the project saw it achieve only limited success, but Pyke said, "It's an interesting frontier basin with a lot of potential, but the project began at the start of the dip in oil prices when companies were pulling the reigns in. Unfortunately for the Bight, the timing wasn't great."

Woodside has since entered the area and is accumulating large quantities of 2D data that will complement that already acquired by Seismic Australia. "Woodside is shooting over the blocks they've acquired, focussing their work around developing prospects for drilling at a future time", Pyke said. "Once they've drilled their wells, the results may provide the stimulus for the second generation of exploration in the area."

Looking back over the history of the company, Pyke said it is more a case of having had successful years rather than successful areas, which he said closely correlate with the peaks and troughs of the market. "If you go back to when we started in 1996, the market was very buoyant; there were a lot of players and a multiclient project would receive a lot of interest. As the market weakened, things became tighter. "

"We see the nature of oil and gas business as continually changing and our current focus is to look for new frontier and deepwater areas that meet the needs of what is now a globalised industry."