Sustained Application Base Drives Demand for Marine Seismic Equipment and Acquisition Services
Marine seismic operations, more popularly seismographic acquisition, are the explorations for offshore hydrocarbon resources. Predominantly employed by the oil and gas industry, marine seismic surveys are also widely used in mining industry, and groundwater exploration projects. These surveys are carried out using waves of energy to help build up an image of an area and the resources beneath. At a global level, marine seismic acquisition services have grown over the period. Several oil and gas production companies are adopting efficient offshore seismic acquisition services in order to get genuine data about the shallow water, deep-water, and ultra-deep-water geology.
The global market has a greater number of companies offering multi-client services than those with proprietary seismic survey services. The exploration & production (E&P) spending of the oil and gas industry is cyclical, which means the marine seismic industry is also highly cyclical. Oil and gas companies commit to E&P spending leading to an increase in the marine seismic activity. However, on completion of the seismic survey, the focus shifts to drilling and production of the new reserves.
Declining Expenditure in Offshore Oil and Gas Industry Challenges Market Growth
Some of the main factors that will affect the long-term growth of the marine seismic equipment and acquisition market include technological advancements, oil price trends, E&P capital expenditure (CAPEX), movement towards enhanced recovery and deep-water development, emerging offshore regions for hydrocarbon development, soaring demands from growing economies, and the existing laws and regulations. Some other key factors include high CAPEX to offshore exploration, which benefits the marine seismic sector. The golden triangle, the offshore area of resource exploitation between the Gulf of Mexico (GoM), Brazil, and West Africa, followed by North Sea in Europe is a highly important factor driving spending in the offshore equipment market. However, this is closely affected by oil price levels that determine the sustainability of this trend. Marine seismic interest in the next ten years is expected to develop in the Arctic, Asian and Pacific, African, and the Mexican portion of the Gulf of Mexico.
Declining prices of oil and gas have resulted in cutting investments in the oil and gas E&P sector. This, in turn, has resulted in marine seismic acquisition companies making major cuts with regards to their spending so as to remain profitable during this market downturn. Thus, the marine seismic equipment and acquisition is highly dependent on the real-time oil and gas prices in the market. Seismic data acquisition is expected to recover faster than the equipment market as companies can seek opportunities in both multi-client and proprietary work to utilise the availability of vessels and equipment.
The global COVID-19 outbreak, and emphasized investments in power generation from renewable sources are the key restraining factors impeding the deployment of marine seismic equipment & acquisition services. The marine seismic equipment and acquisition market is primarily driven by the stability in oil and gas prices. However, amid the pandemic situation, the crude oil price went below zero in April, 2020. West Texas Intermediate (WTI) crude oil futures fell to a negative $37.63 per barrel. The demand shortage of crude oil-based products such as gasoline, diesel, and jet fuel in line with the oversupply/surplus has forced the oil and gas E&P companies to halt production. However, a U-shaped recovery is expected post-2020, banking on the newly discovered oil and gas fields in Saudi Arabia, India (Mumbai Offshore Basin), Malaysia (Kulintang-1), Mexico (Leopard prospect), and North Sea. This will benefit the demand for marine seismic equipment and acquisition services in the global market.
Multi-client Seismic Data Acquisition to be More Profitable for Offshore Oil and Gas Players
The marine seismic equipment and acquisition includes 2D, 3D, and 4D. In deep-water and ultra-deep-water areas, marine seismic acquisition uses the same methods - 2D, 3D and 4C -but day rates may be higher due to the more severe environment. However, for deep-water and ultra-deep-water marine seismic acquisition to be encouraged, a consistent and fairly high oil price is required. Another significant trend within the marine seismic acquisition market is the growth of multi-client surveys (MCS) as a dominant modus operandi for acquisition. Multi-client survey libraries are non-exclusive and their data can be acquired during times of lower vessel day rates in anticipation of a rebound in the market at a later date.
Oil and gas companies are increasingly purchasing MCS data for interpretation and analysis by their in-house experts. Proprietary seismic acquisition provides a service with geophysical data only available to the E&P company. It is usually high priced when compared to multi-client seismic acquisition. The geophysical company and E&P company enter the agreement for acquisition of geophysical data over a pre-determined area (e.g., acreage under lease). Here, the latter owns the geophysical data. Risk is also taken by the E&P company, and pays full cost of project, thus, no risk to the former.
Asia Pacific to Reflect High Market Opportunity by 2025
The demand for marine seismic equipment and acquisition is driven by offshore oil and gas assets available in a few countries such as Mexico, Norway, Brazil, Venezuela, and West Africa. Europe was one of the key markets for marine seismic acquisition service providers as the region houses several prominent end users based in the key markets such as Norway, the UK, and the Netherlands. However, the region has now shifted its focus to renewable-based power generation, thereby hampering the demand for marine seismic equipment and acquisition.
In North America, Mexico is the key nation, which is expected to drive the demand for marine seismic equipment and acquisition services in the GoM. The petroleum sector in Latin America is widely driven by the production from offshore oil and gas fields in Brazil, Venezuela, Argentina, and Trinidad & Tobago. Asia Pacific, being a high potential market owing to India’s Oil and Natural Gas Corporation Limited (ONGC) exploration activities in the Arabian sea, and China’s investments in planned shale gas exploitation projects, has triggered investments in the marine seismic acquisition services space and is expected to grow at a fair rate over the forecast period.
Global Marine Seismic Equipment and Acquisition Market: Competitive Landscape
Some of the key players in the marine seismic equipment and acquisition market include Sercel, Shearwater GeoServices, SIG France, CGG, PGS, TGS, Teledyne Marine, Seabird Exploration Group, Fugro, WesternGeco, Polarcu, TNG-Group, and Geo Marine Survey Systems. In January 2020, ONGC awarded Shearwater GeoServices a four-month, 3D broadband marine seismic survey over a shallow-water area of the Arabian Sea. It follows another award from the same operator, in April 2021, for a combined 2D/3D broadband marine seismic survey off India’s east coast.
Key Elements Included In The Study: Global Marine Seismic Equipment and Acquisition Market
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