Some new twists and turns have been added to the well chronicled travails of companies fighting an uphill battle to establish the use of marine controlled source electromagnetic (CSEM) technology for offshore hydrocarbon detection.
Careful reading of a somewhat impenetrable news release issued last month by UK-based Offshore Hydrocarbons Mapping (OHM) revealed a restructure and capital injection to provide a more viable business model for CSEM operations. Essentially the high cost, loss-making acquisition operations including two chartered vessels are being hived off mainly to parties already invested who will form a privately held company to run future acquisition services.
Meantime the remainder of OHM including its profitable Rock Solid Images subsidiary will continue as a traded company.
Following the disposals, OHM will no longer conduct CSEM surveys and will become a specialist interpreter of seismic, CSEM, and well data.
The key element of the new arrangement is that OHM will continue to have a close working relationship with the acquisition business without having to dip into profitable revenue streams to support marine operations. It will be able to concentrate its efforts and resources in developing and marketing the integration of geophysical data types, with particular expertise in CSEM and seismic. That said, OHM’s survival strategy underlines the difficulty of a start-up company establishing a new technology as capitally intensive as CSEM with the added handicap of continued industry scepticism.
The market leader Electromagnetic Services (EMGS) has encountered the same issues making a number of calls on its investors in recent years. Its recent alliance with Fugro has provided a better resourced partner, and may well presage a takeover at some point. Fugro has plenty of experience with non-seismic acquisition methods such as gravity and magnetic and likes to be a dominant company in a niche market with prospects, such as CSEM. Up to now EMGS has found that the demand for its survey services can be global, and that for a small fleet that means an awful lot of expensive unproductive steaming time to different geographical locations. Smaller marine seismic companies encounter similar problems.
EMGS has been gaining some traction for its CSEM solution highlighted by a multi-year contract with Pemex worth a minimum of $150 million, to be carried out by the purpose-built EM vessel BOA Thalassa. The company has also for the first time licensed its 3D EM software to a major oil company. Last of all, it won a round in the long running battle to defend its patents when an appeal court in the UK reversed a previous judgement in favour of a Schlumberger challenge to the patents validity. OE