January 2001


Seitel Solutions (January 2001)

Seitel’s Solutions unit is developing with SAN technology from IBM and acquisitions of EDM Products Inc. and Lacey Digital’s tape software.

Seismic data specialists Seitel is fleshing out its Solutions unit (PDM Vol. 5 N° 9) into an internet-enabled virtual seismic data store. The unit will serve both Seitel’s own internal needs – particularly for the management of its massive petabyte seismic library – and will offer oil and gas companies an enterprise data management system based on the storage solution provider model.

IBM SAN

Last month, Seitel partnered with IBM for the design of what is claimed as one of the world’s largest Storage Area Networks (SAN) and bought Canadian data access specialist EDM Products Inc. This month, Seitel has bolstered its data management offering with the acquisition of Windows-based transcription and data capture software from Lacey Digital.

Corridor

The backbone of the Solution is the North American Energy Corridor – a high speed virtual link between Calgary, Denver, Houston and New Orleans. The SAN architecture comprises IBM storage products including the Shark Enterprise Storage Server, IBM tape storage devices and Tivoli Storage Manager.

SANford

Head of IBM’s Storage Systems Group, Linda Sanford said “Seitel is taking a visionary step that places it at the forefront of the petroleum industry, changing the way traditional oil and gas exploration is done.”

Frame

Seitel CEO Paul Frame added “The combination of IBM's storage solutions capability and Seitel's content including our seismic data library, create a leading-edge solution to oil and gas exploration that has never before been offered to the industry . We chose IBM as our technology partner because we are taking Seitel into the next generation of oil and gas exploration. IBM is a partner that understands our vision, has the products and skills to implement it and is the leader in e-business.”

Coward

EDM CEO Paul Coward will remain in the Solutions unit, giving Seitel a seat on the board of the PPDM Association and chairmanship of the Seismic Standards Committee. The addition of EDM’s products extends Seitel’s scope beyond seismic into inventory tracking, well data, and pipelines. See our interview with Paul Frame on page 3.

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Veritas expansion (January 2001)

Veritas has acquired Reservoir Characterization Research and Consulting Inc. for $33 million of its own stock.

Veritas DGC Inc. has acquired Denver-based Reservoir Characterization Research and Consulting, Inc. (RC2) for $33 million worth of Veritas stock.

Robson

Veritas’ Chairman Dave Robson commented, “RC2's best-in-class technology, talented people and worldwide experience are a great fit with our integrated seismic data interpretation and analysis services. The acquisition of Reservoir Characterization and Research will significantly enhance our capabilities for specialized reservoir services that improve decision-making, optimize production and reduce risk.”

Bashore

Reservoir Characterization president William Bashore added “We will benefit from the complementary technologies and global reach Veritas provides. Combined, our two organizations will offer the most complete line of services available from any one company in the reservoir characterization market, spanning well correlation, geological modeling, seismic inversion, reservoir simulation, project development, petrophysics, AVO and visualization.” RC2 acquired fluid flow specialist Heinemann Oil Techology last year. More from www.veritasdgc.com.

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What’s a market worth? (January 2001)

With dot com failures and cold water poured on energy e-biz financial forecasts, PDM editor Neil McNaughton wonders just how much a market is worth. The answer seems to be not a lot but other business models for upstream e-business look more promising. Could it be that we have been missing some real opportunities for geophysical e-business?

While attending the IAGC e-commerce in geophysics conference in Houston this month (see report on pages 6 and 7) I am sure that I heard a couple of speakers make what amounts to an e-biz Freudian slip. This involved the classic illusion of new businesses, that of confusing turnover with profit. I heard one speaker enthuse over the ‘billions of dollars’ that were transiting through the upstream Acquisitions and Divestiture (A&D) market, with the distinct implication that a large proportion of this was to come the way of the e-market.

London Stock Exchange

Well OK, no doubt some of it will, but how much? If x billion dollars worth of business goes through a market, what is the profit made by the marketplace? Well one rather famous marketplace, the London Stock Exchange (LSE), was up for sale recently. Although the deal was not done it did expose an estimate of the value of a marketplace. This was of the order of one billion pounds sterling. A lot, but not an astronomical amount, much less than the billions of dollars that energy e-biz is going to ‘generate.’

£ 6.5 trillion!

I got on the web and did some further digging, with interesting results. The LSE made some £ 34 million profit on £ 175 million turnover last year. But this of course is the turnover recorded in the LSE’s books, what they charge clients for their services. Some more digging revealed the ‘turnover’ of the LSE itself. This was a staggering £ 6.5 trillion in 2000. Now mapping a stock market across to a vertical e-biz is far from a perfect fit. I would have liked to do further research on cattle, or fruit and vegetable markets, but will simply observe that the people running them don’t look as though they are in the billion dollar category!

Salomon Smith Barney

If we take the ratio of the LSE’s overall turnover (£ 6.5 trillion) to marketplace profit (£ 20 million) we have a rather sobering ratio of 1:325,000. For fun, lets map that across to some E&P disposal market values. A survey by Salomon Smith Barney last year put the upstream A&D market at $30-50 billion annually. Taking the upper figure, and applying the LSE ratio of market value to marketplace profit this implies profits to all the market owners of an under whelming $ 140,000.

Wrong?

One thing is of course wrong with this analysis. Most of the profit made in share trades is not made by the marketplace, but by the market makers - the brokerage houses. More surfing revealed that the overall commission rate for UK equity business is 0.15%. This gives a marketplace turnover to market maker turnover ratio of a more respectable 1:667. In other words, the E&P A&D market maker’s turnover becomes $75 million. With a reasonable amount of competition, well run businesses could be expected to translate this into profits of the order of $10 million. Still rather a modest figure for the world-wide A&D market.

Baird

Similar fundamentals have been behind the failure of many dot coms recently. A propos of this, Schlumberger CEO Euan Baird comments “As the dot.com technology bubble fades it is becoming increasingly clear that the winners in the Internet age will be companies with excellent products and market shares in specific verticals who are able to aggressively enhance their business model with these new technologies.” Indeed, if you have a business like Schlumberger’s you should indeed be able to leverage it through the internet. But for the rest of us, is the internet just a technological veneer around traditional activity? Or are there still opportunities for quantum change and completely new businesses?

‘Processive’ interpretation

In my own modest contribution to the IAGC proceedings I argued that there were indeed lots of such opportunities emerging. For geophysics, many of these will apply to the frayed boundary between ‘processing’ and ‘interpretation.’ I ventured that bandwidth could provide much greater integration between your unstacked, off-site data and your interpretation workstation. That there was a real opportunity here to provide a multitude of new services such as pre-stack depth migration on demand, AVO, rapid access to partial gathers and management of such complex datasets. All facilitating a move from interpretive processing to ‘processive’ interpretation.

Cap Gemini

Randy Alexander of Cap Gemini Ernst & Young’s analysis of transaction types was interesting in this context. Most all of the portal, procurement and marketplace type business falls into the low margin area of e-commerce. It also requires multi-party agreement on the standards and protocols to be used - which historically has proved hard to reach. On the other hand, the high tech, bandwidth-enabled processes fall into the attractive high added value category. But what is even better, you only need standards and protocols agreement between the contractor and the client to get up and running. Could the integration of high tech processing into the interpretation workflow be the real low hanging fruits of geophysical e-business?

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PDM Interview Paul Frame, CEO Seitel (January 2001)

PDM talked to Seitel CEO and Team Ferrari racer Paul Frame about the new Seitel Solutions technology and business.

PDM – Seitel made $135 million in seismic data sales in 2000, how did you get here?

Frame – We began building our non-exclusive seismic library in 1982. Today this comprises over 1 petabyte of data. The 1999 book value of the seismic library is $399 million. Much of this comes from the acquisition of other oil company or seismic contractors' libraries. We have a reputation for being very strong in sales, but I believe that our success comes equally from our skills as buyers of seismic data.

PDM – Do you shoot seismics yourselves?

Frame – We do not shoot seismics, but we do employ seismic contractors to acquire data for us. For instance we are currently the largest acquirer of seismic data in Louisiana.

PDM – You have an exploration subsidiary – DDD [an allusion to 3D seismics]. How did you get into exploration?

Frame – In 1992, we saw an opportunity with the retreat of the US majors from domestic exploration and formed DDD, our E&P operating division, to selectively acquire such properties. The total value of such properties has been estimated as $15 billion, so it is quite a business opportunity. DDD also allows Seitel to leverage our seismic data library.

PDM – How about processing?

Frame – We do processing internally, for our own use. We are currently reprocessing data for an upcoming exploration hotspot - Wyoming - which has not seen any significant activity since the late '80s.

PDM – You don’t see any conflict of interest between your E&P activity and seismic sales?

Frame – This used to be an accusation leveled at Seitel, but the reality is different. Exploration is fundamentally a land, not a data play.

PDM – During Seitel’s lifetime, the industry has had a roller coaster of a ride. What are your secrets for survival?

Frame – We have managed large data resources for the last 20 years - seeing the business through four downturns. Our action in the fall of 1997, when we counter cyclically stopped new acquisitions and retrenched, meant that we emerged from the downturn in much better shape than others who had carried with their investment programs. Today, Seitel, unlike some of its competitors, is in good shape and ripe for expansion - which is why we are so excited about Seitel Solutions (SS), our new data management unit.

PDM – You have made quite a few press releases about the Solutions unit, what exactly are your plans for data management?

Frame – We know that the ‘new world order’ is e-business with some sort of a virtual data store, offering real-time access to massive datasets - but we are not sure exactly what medium will be used, an electronic marketplace, a portal or what? Both technology and business models are in their infancy. Having said that, we believe that we understand the business fundamentals better than any. SS is planned as a Virtual Data Store (VDS), with inter and extranet capabilities. We have partnered with IBM to facilitate this technology and have a valid business model and a real desire to succeed. We also have the experience and people necessary to implement our plan. We will be demonstrating the ‘ultimate solution’ for archive retrieval within 6 months. The productized VDS will offer web based GIS access to the Seitel libraries.

PDM – Do you ‘eat your own dog food’?

Frame – Seitel Data will be the Solutions unit’s first customer. SS will be a solution provider to over 20 of our clients who use our facilities management, archives and database management. But yes, our own internal usage of the system and technologies underpin the venture. Seitel is its own best client, which assures a minimum usage pattern and mandates good technology.

PDM – What sets you out from your e-business competitors?

Frame – We are not just a web page! Our data management experience, our relationship with IBM and Tivoli are helping us create a strong intranet solution, which in 6 months will be going on the world wide web - but when it does, it will not be ‘hollow.’

PDM – And what are the obstacles to achieving this?

Frame – The expense and time needed to take all our data onto the web. We are talking to our major clients to try and establish an equitable business model for the compression of physical data warehouses to digital. This is a very comprehensive process involving bar coding of inventory, imaging of tapes and post facto data management. Our software is configured to an optimized workflow - we do not want to re-engineer our established processes. We want to bring the exploration team into the modern world by acting as consultants, change managers, software vendors - whatever it takes, all clients differ. In 10 years time everyone will be pulling data from virtual datastores onto the Visionarium screen.

PDM – Isn’t 10 years a long time frame?

Frame – Not really, the greatest error that the outside world makes about oil and gas technology is in underestimating the time and resources needed to accomplish major projects like this. We still deliver most of our data in a cardboard box! It will take many years before we see the end of the ‘Raiders of the Lost Ark’ warehouses! Especially since data volumes are exploding to fill the space we gain by technological advances. The driver behind the move to digital delivery is time and data completeness. Together these represent opportunity for the oil and gas industry. Seitel knows this well, we collect the thinking of some 60 major clients on E&P data management and over 700 companies have contributed their ideas.

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PPDM V 3.5 (January 2001)

A major release of the Public Petroleum Data Model is claimed to facilitate GIS linkage.

The Calgary-based The Public Petroleum Data Model (PPDM) Association has released Version 3.5 of its petroleum data model. The major release adds seven new modules to the business-driven petroleum data model and significant enhancements to another eight.

Spatial support

The new model offers additions to technical data definitions, release documentation and diagrams, support module reference guides, sample data sets, data mappings and support for spatial enabling the data model. Improvements in the land module facilitate administration and management of contractual agreements which cover virtually every aspect of the oil and gas industry, from exploration to production.

Land

New land coverage includes provisions, partnerships and interest sets, obligations, accounting and operating procedures, spatial or aerial extent and legal disputes. Principle subject areas have been added for stratigraphy and for management of geologic data, information and interpretations.

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Predict V8.0 (January 2001)

Version 8 of Knowledge Systems geopressure analysis software boasts new features and an ASP offering.

Knowledge Systems, Inc. (KSI) claims improved functionality and increased user access for Version 8 of its Drillworks/Predict geopressure analysis software. The new release of offers additional hardwired shale index and volume methods, the Amoco overburden gradient method and the Bowers sonic and interval velocity methods.

Chevron

Chevron has successfully used the new software, in conjunction with a regional structural and stratigraphic interpretation model, to predict pore pressure and fracture gradient for five frontier deepwater Gulf of Mexico sub-salt prospects. Actual pressures fell within the ‘most likely’ range for 4 of the 5 wells drilled.

ASP

The software is also now available over the internet on a pay per use basis. More from www.knowsys.com.

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@Risk faster now (January 2001)

A new version of @Risk’s Accelerator adds macro support and enhanced parallel processing capacity on unused LAN CPU cycles.

Palisade Corp. vendors of the popular Excel plug-in for risk analysis has released a new version of its parallel computing infrastructure, the @RISK Accelerator. The Accelerator splits up a simulation and shares it out between available CPUs over a network. Each CPU completes its portion of the simulation and sends the results back to be compiled. All this is transparent to the user. The result is ‘near linear’ increase in speed with each additional CPU used.

Macros

@RISK Accelerator V.2 is intended for running large, complex @RISK models for mission critical decision making, such as simulation of portfolios. The latest version adds enhanced support for @RISK 4.0, custom macros and add-ins in user models. The upgrade is free for current @RISK Accelerator 1.0 users.

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Biztech standards emerge (January 2001)

New standards for production to ERP integration are now available on the Biztech for Energy public website. They are based on Microsoft’s XDR data extension to XML.

Announced last October (PDM Vol. 5 N° 10), the first Biztech for Energy standard for production data capture to ERP integration has at last (at least partially) been released to the public. Elements of the spec are now available on the www.biztech4energy.org website, under the ratified specifications section.

XDR

What is on the web gives a glimpse of how the spec is developing and of the underlying technology. This is XML, of course, but the data definition is held in XML-Data Reduced (XDR) schemas. These define the individual elements, attributes, and relations used in the XML structure. This is a decidedly Microsoft-esque flavor of XML, and we were intrigued that this was adopted by an organization that included Oracle. Or perhaps not. Oracle is no longer listed as a member of B4E, so the world order is not troubled!

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POSC XML Roadshow (January 2001)

POSC has been spreading the e-commerce word at meetings in Stavanger, Houston and London. Highlights include two new XML based initiatives for SEG-Y and the POSC Exchange Format (PEF).

At the London meet, Seb Lessware of UK-based Laser-Scan described the Open GIS Consortium's Interoperability 2000 project designed to provide interoperability between Geographical Information Systems and map data servers. The Mapping Testbed project provides XML-based standards for map servers, feature servers and specifies standard query language (also in XML) for performing complex GIS queries such as “find all the oilifields within 2miles of this pipleline.” The project uses a new markup language - “Geography ML.”

Bobbit

John Bobbit introduced two new XML data specifications. In addition to the two well log standards announced last year (WellLogML for data and LogGraphicsML for plots) the new specifications cover geophysics and E&P databases. The new geophysical modeling language is designed to provide portability of SEG-Y seismic data by mapping the SEG-Y header information into XML. The self describing nature of XML and the file portability should help processing centers and seismic data librarians manage the plethora of antique and varied 'flavors' of the format. The specification is intended for the header information, and will not affect the binary header or trace data.

PEF XML

Another new XML initiative is PEF XML. The POSC Exchange Format is a specification for migrating E&P databases. The move to XML will bring this technology into the web-age. More from www.posc.org.

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PDM Book Review - Oracle and SQL Server Integration (January 2001)

The new book by Merak database guru Stephen Chelack provides an excellent overview of modern database technologies and integration.

“Oracle 8i and Microsoft SQL Server 2000 Integration” provides a timely snapshot of real-world IT. The book covers topics from the integration of the title, to web data access, security and the role of XML. The book sets out to provide the lowdown on how the competing databases work.

Replication

The importance of tools such as SQL Server DTS, Oracle Migration Workbench, Universal Data Access, replication and Microsoft BizTalk server are clearly explained. The book is refreshingly free of the abstraction and obfuscation that many authors use to cover their lack of hands-on experience. Chapters on data storage, optimization, networking, migration and internet integration make this book a great overview of the subject - ideal for the manager in a hurry who wants to see what can (and should) be done to get maximum benefit from modern databases and infrastructure. Practitioners will still have to RTFM, but this book will help them decide which of the myriad of volumes on their shelves to consult.

Web

The chapter on web tools and solutions offers tips for mobile computing, and building Enterprise Information Systems with tools like Microsoft’s Digital Dashboard or Oracle Portal. Finally, a chapter looks at the future and offers an enlightening discussion of the commercial battle being waged between the IT behemoths.

Merak

The new book from Stephen Chelack is in no way specific to upstream IT. But Chelack’s experience as Senior Database Architect with Merak has given him extensive experience of both Microsoft SQL Server and Oracle. Chelack told PDM “We've used many of the migration techniques in the book not only in development but also in QA and support.”

Buy now!

All in all, this book is a great overview of today's heterogeneous IT systems and is full of useful ideas for tying things together. Essential reading - buy it today!

“Oracle 8i and Microsoft SQL Server Integration” by Stephen Chelack. M&T Books 2001. ISBN 0-7645-4699-6.

www.mandtbooks.com.

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Hydro research fund (January 2001)

Norsk Hydro is setting up a 350 million NOK venture capital fund for energy sector R&D.

Norsk Hydro is to establish Norsk Hydro Technology Venture (NTV), a venture capital fund which will invest in energy sector R&D projects implemented outside of the company's own operations. The fund has been allocated with 350 million NOK (about $ 40 million) for its first four years.

Rostrup

The fund will inject capital into companies developing projects which are of importance for Hydro such as oil exploration and recovery. A prerequisite of investment is that the fund achieves a rate of return on a par with that stipulated for Hydro's other businesses. Jørgen Rostrup, currently financial director for Hydro's oil operations in Norway, has been appointed head of NTV.

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IAGC E-Commerce in Geophysics (January 2001)

Described as a ‘roadmap for the future,’ the International Geophysical Contractors Association’s conference on e-commerce in geophysics was well attended with over 200 delegates. But the climate has changed since we reported on the POSC e-business show last November. Reality, in the form of under-performing dot coms and evolving business models has replaced HypeML. The impact of this on the geophysical industry is far from clear.

The International Association of Geophysical Contractors (IAGC) and the International Petroleum Association of America (IPAA) co-hosted a one-day conference on e-commerce in geophysics in Houston this month. Some 200 delegates showed up to hear McKinsey’s Roger Roberts give a downbeat keynote speech, with warnings of serious underperformance in the world of e-commerce at large. As of March 2000, some six hundred B2C sites were funded. Today, only three are profitable. B2B is picking up slack with ‘tremendous enthusiasm’ to drive change across the industry.

Inflated

But these also have had inflated revenue projections with 70-100% annual growth forecasts bringing in tens of billions of funding and talent. The real numbers have proved a fraction of the forecasts. In 1999, despite some $12 billion invested in B2B, a meager $300 million in revenues was actually generated. For Roberts, the near term story is ‘incoherent,’ many early ventures are ‘morphing’ their business models – to focus, for instance, on application function provision over the web. Others have moved into hosting private marketplaces for large players like Ford and BHP Steel. But ‘the graveyard is beginning to fill,’ with over 100 companies folding in the last few months, and ‘there are more to come!’ Roberts still believes that the blend of old economy values with the speed of the new can create significant business value. He concluded with a great quote from none other than Bill Gates – “The impact of new technologies is always overestimated in the first year and underestimated in the 10 years that it takes for them to take effect.”

Magyar

IndigoPool president Dan Magyar was more enthusiastic. He believes that it is still early days, and that now “we are starting to see the value.” To support this he offered some numbers from a recent survey by Salomon Smith Barney. The acquisitions and disposals market place is estimated at $30-50 billion annually, Authorizations for Expenditure at $85 billion, and the MRO procurement marketplace is composed of $65 billion E&P-specific expenditure and another $20 billion generic. But some e-commerce companies have had a rough ride. From April-September 2000 ten companies have been 'removed' from the list of active traders - either by liquidation, or through lack of credibility.

Virtual Prospect

One success story, for Schlumberger, is a private marketplace developed for BP. Virtual Prospect (VP) provides electronic access to resources that allow third parties to evaluate some of BP’s undeveloped exploration opportunities. This allows BP to concentrate its limited resources on high value opportunities. A VP pilot has been running since November 2000. There will be more on Virtual Prospect in next month’s PDM. For Magyar, e-commerce is a great enabler, the business model is evolving and sharing of benefits is as yet unresolved. But the geophysical industry is poised to benefit from the new technologies and businesses. A question from the floor raised the issue of intellectual property rights. Magyar agreed that spec survey licensing was a critical issue which has a technological solution - data can be viewed without being retrieved and stolen! [Comment - so there is no seismic Napster... yet!]

Trade Ranger

Trade Ranger (TR), according to CEO Allen May, is developing e-catalogues and standards for upstream transactions. While it is still early days and “no one is making any money,” standards are emerging from companies like i2, Requisite technologies, Intermart. ExxonMobil is “very pro-active.” May advocates inter-hub standards “We need to get agreement between TR, OFS Portal and PetroCosm.”

Cap Gemini

Randy Alexander described how Cap Gemini Ernst & Young has re-organized a major geophysical company’s business. E-procurement was introduced and claimed to be highly successful and with major long-term impact on the company’s business. 10-20% discounts were obtained from suppliers through better control of the buying process. A word of warning though, in general “less than 20% of implementations bring the hoped-for gains.” Do not expect a reduction in head count as a result of e-procurement, which involves reengineering the buying process. Alexander offered an insightful analysis of purchasing categories. These can be organized into a matrix of high and low cost against high and low operational value. Low cost items are all amenable for e-procurement. High cost low value items will likely merit a change of purchasing strategy, while high costs high value items will probably always need a ‘non-e’ treatment.

Goldman Sachs

Goldman Sachs director Eric Mullins described the future for oil and gas B2B players, as “as clear as mud.” There is potential for growth, but M&A (which Mullins defines as including bankruptcies!) will continue. Online divestiture process will increase as digital data management pervades the industry. Mullins’ seven rules for successful B2B e-commerce success are; be the first mover and shaker, have operational and financial ‘scale,’ be user-centric, grow organically, have multi-market applicability, go for profitability and finally, have “scalable” management teams. Remember – “If at first you don't succeed, you're outta here!”

BP Digital Business

Steve Peacock, BP’s head of digital business believes that geophysics will benefit from a connected e-world. Geophysics is global, data and information intensive and boasts a variety of business relationships. It is also already extensively interconnected and the ‘supply chain’ is ripe for integration. BP has integrated e-business and Information Technology into the new Digital Business unit. BP is an ‘aggressive’ experimenter and early adopter. Peacock entreats us to “Think big, start small, scale up quickly and re-invent business models and processes.” More e-ntreaties; go for ‘smart standardization,’ ‘show me the money’ and ‘burn the boats’ à la Cortez!

Killer e-biz

Killer applications of digital business will include live data coming back from facilities and seismic while drilling. 4D surveys may be generated quarterly from permanent oilfield sensors. BP is ‘thinking laterally’ and has become a service provider - offering excess bandwidth capacity in the North Sea to other operators and telephone operators in Norway and the UK. Another venture offers excess capacity on BP ’copter flights in the North Sea - using web-enabled logistics. Peacock believes that “If you are not doing digital business - soon you won't be ‘doing’ business.”

Infosec

John Coghlan of Schlumberger Infosec provided some words of caution as to the security of the public internet. Coghlan advocates a Virtual Private Network (VPN) to assure secure access and authentication over the intranet from anywhere in the world. The solution is productized by Schlumberger as Smart Corp - employee badges and SmartCard for computer resource access control.

GeoNet

GeoNet Services’ Randy Premont offered a sideways look at bandwidth pricing and announced the (fictitious) First Annual “Bitster” Awards - for bandwidth in Houston. Awards were made in three categories: Houston metro area network, wireless broadband and international. Phonoscope took the metro area prize with its fiber optic network - a “work of art” according to Premont. Advanced Radio Telecom took the wireless prize, and Qwest the international award.

GigaBit

Typical costs today are $8,000 per month for 1Gbit bandwidth in Houston and $13,500 per month for 45 Mbit international (to Europe). Bandwidth is growing and 2.5 Gbit is ‘standard’ today with terabit links in the foreseeable future. Uses of such bandwidth include processing - where Tadpole is already selling CPU cycles over the net. A GeoNet survey shows take-up of e-business in the upstream to be slower than anticipated. One uncertainty is bandwidth ‘resonance’ whereby demand grows to choke supply - as on Houston's road system! But some companies are ‘doing it right,’ - like Global Crossing which has grown from nothing to a $4 billion revenue company, ‘as big as the whole geophysics industry,’ since it started out only three years ago.

Data Management

PDM editor Neil McNaughton believes that effective e-business is predicated on interoperable systems. But, despite the evolution of upstream information technologies from stand alone applications through a variety of federating technologies interoperability has proved illusive. Most of the industry initiatives aimed at providing ‘silver bullet’ solutions so far failed.

Lightweight

Today, the desire to have corporate wide access to information systems is bringing new lightweight interoperability paradigms. These should offer interesting e-business opportunities as components of geophysical workflow can be isolated and handled off-site. Such components include pre-stack depth migration, AVO and other processes implicating un-stacked or partially stacked data.

Compute-intensive

Using e-business, compute-intensive tasks can integrate the corporate workflow in an external service provision mode. Many other aspects of the workflow from data loading to inventory and document management are amenable to e-enabled solutions. Some of these need not deploy sophisticated technology. Email and FTP are just as efficient tools for e-business as the hubs and portals of e-commerce. E-business between a geophysical contractor and client should be easier to achieve, since agreement on systems and data standards needs only to be achieved between two parties. The hubs require many to many agreement on standards and work processes - a tougher nut to crack in the commercial world.

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Portfolio management for Merak (January 2001)

Merak has completed the integration of PDI’s portfolio management concepts into its Capital Planning suite.

Merak originally partnered with John Howell’s Portfolio Decisions Inc. (PDI) last year (see PDM Vol. 5 N° 4). The agreement called for the incorporation of PDI’s portfolio management concepts into Merak’s Capital Planning software. The development is now completed, and Capital Planning now includes some of the functionality of the PDI Perspectives portfolio management application. The combination of these products brings Merak's software development and PDI's portfolio processes together to help companies analyze portfolio and risk optimization.

Howell

PDI founder John Howell said, “The initial release will add Perspectives functionality to manage business performance and to identify projects that are strategic to the corporate strategy. The release incorporates analytic methods and enhanced graphic capabilities for more effective data analysis in Capital Planning. Clients will immediately be able to assess their business plans relative to their strategy and define alternative investment scenarios to balance their business performance.” The first release of this combined product will be shortly.

Roadshow

Concomitant with the rollout, Merak are embarking on a Capital Planning road show - kicking off in Calgary. More on other show locations from www.merak.com.

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Corelab buys Core Petrophysics (January 2001)

Core Laboratories has completed its acquisition of unconsolidated reservoir specialist Core Petrophysics.

Core Laboratories has acquired all of the outstanding shares of Houston-based Core Petrophysics, Inc. (CPI). The transaction was a share-for-share exchange, no other terms were released. CPI, which had 1999 revenues of approximately $5,000,000, is a technology leader in the petrophysical characterization of partially consolidated and unconsolidated reservoirs, which make up the majority of deepwater fields around the world.

Deepwater

The addition of CPI proprietary technologies and deepwater wellsite expertise will strengthen CoreLab’s position in deepwater reservoir characterization. CoreLab is currently working on deepwater reservoir description and production enhancement projects in the Gulf of Mexico, offshore Brazil and offshore West Africa.

Multi-client

The multiclient Gulf of Mexico Deepwater Reservoir Study now contains over 150 wells with 34 participating companies. With the addition of CPI geologists, Core expects to continue to expand the Deepwater Study.

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DAEX adopts XML (January 2001)

DAEX can now trade data with systems using POSC’s WellLogML exchange format.

Oilfield Systems is to include the POSC well log data standard WellLogML into its E&P data exchange middleware, DAEX.

Chart

Nick Chart, Oilfield Systems' head of operations explained “XML is a formal, text-based format for describing data and documents. DAEX uses XML for data transport through our link. Oilfield Systems is participating in industry initiatives to define a set of standard XML representations of E&P data types. We contributed to the definition of WellLogML and now provide DAEX components both to read and write the format. We can now, for instance, load WellLogML into OpenWorks, GeoFrame, Recall, Geolog and various proprietary databases or produce it from these sources.”

Component

Chart continued, “DAEX is a total data movement solution. Traditional approaches burden the user with the responsibility of tracking exchange files and manually exporting and importing them. Also, the exported data file often has to be edited to conform to the expectations of the receiving program. DAEX automates the whole transfer process, relieving the user of this burden and removing possible sources of error. More from www.oilfield-systems.com.

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New fish in the ’Pool (January 2001)

Schlumberger’s IndigoPool claims more online assets than all other upstream markets. Latest customer is Repsol YPF.

The latest version of Schlumberger’s IndigoPool e-marketplace introduces a new application framework, and enhancements to security, data purchase and entitlements management.

Stellas

IndigoPool operations manager Demetrios Stellas said “In the past 12 months, we’ve been chosen by more companies and governments to showcase their global assets and data than all other upstream marketplace sites combined.” Today over 5,700 users and 546 companies, representing 105 countries, have posted assets with a total value surpassing $4 billion on IndigoPool.

Gremillet

Spanish Repsol YPF is IndigPool’s latest major client. Repsol is selling its Azerbaijani exploration assets and farming out acreage in Kazakhstan. Repsol e-business director Bernard Gremillet said “IndigoPool is key to our e-Business strategy and will help accelerate the way we do business by making our assets immediately visible to a global audience. We had a request for a Data Book after only one week on the Web site.” 

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People (January 2001)

This month sees moves to Foster Findlay, Seitel, CGG and Magic Earth.

John Ashbridge is moving from Granite Rock to take up the position of director of business development at Foster Findlay Associates. Susan Findlay is moving to a technology transfer role which will see FFA bringing more medical imaging technology to the oil & gas business.

Urquidi

Seitel has named Manuel Urquidi as senior VP of international operations. Urquidi was previously chairman of oilfield equipment co H.P.M.

Harrison

Gerry Harrison has moved from his position as Chairman of Aker Geo, to join CGG as Executive VP of its Offshore Seismic Business Unit. Harrison was previously chairman of Horizon, Eagle Offshore.

Pettenati-Auzière

Harrison replaces Christophe Pettenati-Auzière who is to become Senior Executive VP of Strategy, Control and Corporate Planning, including Corporate Marketing and Investor Relations. Auzière began his career with Schlumberger and spent fourteen years with Coflexip before joining CGG in 1996.

Czajkowski

Charles Czajkowski has been appointed general manager of the newly formed UK unit of Magic Earth. Czajkowski was previously with Arco, Western Geophysical, Seiscom Delta and Landmark.

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Pocket GIS (January 2001)

New software provides mobile map integration and data capture for fieldworkers.

Field engineers and geologists may be interested in a new positioning device from Positioning Resources Ltd. PocketGIS can be used to control a camera for geo-referenced photography, to sketch outcrops or to capture spatially referenced scientific data capture.

Windows CE

PocketGIS software is an innovative, affordable and user-friendly GIS product for seamless field data capture. Written for Windows CE, users have the choice of a variety of handhelds. The ruggedized Husky FEX21 and Fujitsu Pencentra 130 / 200 models are recommended for field use. PocketGIS works on any Windows CE, PocketPC or compatible device. More from www.posres.co.uk 

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Eye for Energy Europe (January 2001)

E-Business conference to be held in Amsterdam, 26-28th March 2001

Eye for Energy is holding a big e-commerce conference in Amsterdam on the 26th and 27th March 2001. Focus is downstream procurement, supply chain and CRM. But papers on Intranets, portals and bandwidth will interest the IT generalist.

Keynote

Keynote speakers hail from TotalFinaElf, Amerada Hess and the International Petroleum Exchange. More from www.eyeforenergy.com.

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Shell e-buyers disappointed (January 2001)

An online survey by Shell Services suggests that e-commerce clients are not impressed.

A survey on the Shell Services International website set out to test online buyer sentiment. The question asked was “Does purchasing goods and services on-line save you time and money?”

No!

A surprisingly large majority (82%) of the 502 visitors that voted, did not agree with the premise. If you are an e-purchaser, you can cast your own vote on www.shellservices.com. 

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Geovecteur Plus V8.1 (January 2001)

CGG has released a new version of its seismic processing package GeovecteurPlus.

Version 8.1 of CGG’s GeovecteurPlus contains new interactive and batch applications and major upgrades to existing code. The Seismic Data Server allows users to access seismic data by line name, swath number or sail line. A new interactive velocity picking tool GeoVel allows processors to stack data on the fly.

4D Pick

The new 4th Dimension Picking Station aids in event location with a search algorithm incorporating an extra parameter such as offset, or velocity.

Batch

Twenty five new batch processing modules and upgrades bring new functionality to filtering, attenuation, restoration, deabsorption and deconvolution. Near-surface and elastic modeling, pre-stack time and depth migration and attribute analysis (including anisotropy) are also featured in the new software.

QC

A new processing module “Lemur” attenuates groundroll, based on a least-squares method and removes linear noise while preserving amplitude. The module is efficient on both dispersed and non-dispersed noise. Lemur can be applied on linear or cross-spread gathers. More from www.cgg.com.

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Autodesk GIS Design Server (January 2001)

Autodesk has announced the GIS Design Server - for storage and management of map data. The new map server supports thousands of distributed users from an Oracle 8i database.

The Autodesk GIS Design Server (AGDS) is described as the cornerstone of the company's vision and strategy for bringing an end-to-end GIS solution to energy and utility companies. AGDS will provide tight, flexible integration between Autodesk's GIS products and a proven enterprise GIS server. Autodesk GIS Design Server is based on the VISION technology acquired by Autodesk in 1999. The server seamlessly and quickly delivers location-based data to the user's desktop, via the Web and in the field. The server works in concert with the design and mapping capabilities of AutoCAD Map software, and the Web and mobile features of Autodesk MapGuide OnSite.

Oracle 8i

Based on an Oracle8i database, the integrated solution is said to elevate GIS into a mainstream business support system. The server scales to thousands of operational users regardless of application type. Tight technical integration enables information to freely flow from an Oracle data warehouse to the server and onto mapping and engineering desktops.

ERP

The server uses standard open communications protocols, scales across multiple networks and applications and integrates enterprise resource planning (ERP) systems. Thousands of concurrent users can access and edit maps ‘instantly.’ More from www.autodesk.com.

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Holland & Davis to help GeoQuest clients (January 2001)

GeoQuest’s North American clients will now have access to implementation and change management consulting services from Holland & Davis.

The North American division of GeoQuest has chosen Holland & Davis Inc. (HDI) to provide “organizational alignment services” for the implementations of GeoQuest's US E&P data and information management solutions. HDI is a Houston-based management consulting company. Founded in the 1970’s, HDI’s first client was NASA. HDI provides strategy development and implementation (including e-strategies), operational improvement, organizational performance management, training, development, and project management.

Gutman

Geoquest VP for US operations, Larry Gutman said “Our goal in any implementation is for our clients to get the full business value from their investment in GeoQuest's solutions. There are many important elements of a successful implementation beyond getting the technology itself up and running. People using new software need appropriate training, but there's a bigger picture to consider. New technology frequently functions differently, making things possible that were not possible before, enabling people to work more productively and to add more value. HDI’s organizational skills will help our clients realize this value.”

Nash

Bill Nash, HDI president added “Over the years, we've seen companies underestimate or minimize their efforts in this area. We look forward to working with GeoQuest's technical team and clients to help them gain full benefit from their investments.” More from www.hdinc.com.

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Company Financials (January 2001)

End year results from Schlumberger, Paradigm and PGS show contrasting fortunes for the service sector.

Schlumberger

Income from continuing operations of $735 million and diluted earnings per share of $1.27 were 61% and 57% higher than 1999 (before last year’s unusual items). Chairman and CEO Euan Baird, citing a 73% increase in pretax operating, anticipates that “total activity in 2001 is expected to be well above 2000 levels as oil companies move more aggressively to explore for and to develop new fields and to optimize older fields.” Baird considers Schlumberger’s domain experience in leveraging Internet technologies sets it out from the crowd.

Bubble

“As the dot.com technology bubble fades it is becoming increasingly clear that the winners in the Internet age will be companies with excellent products and market shares in specific verticals who are able to aggressively enhance their business model with these new technologies.”

Paradigm

Paradigm forecasts significant growth for 2001 with total revenues targeted to reach $80 million compared to a reported $63 million for 2000. A continued 50% growth in service revenues is also anticipated. Paradigm chairman Eldad Weiss said, “We plan to expand our seismic data processing capacity and also to extend our service offering to reservoir studies. We will also offer advanced production oriented seismic analysis - 4D and 4C, and additional leading-edge technologies such as full wave 3D prestack depth migration.” Weiss also indicated that Paradigm was planning further acquisitions in 2001, with a focus on petroleum engineering.

PGS

The picture from PGS is less rosy, with weaker than expected results for fourth quarter 2000. PGS report that oil company spending on marine seismics has yet to fully recover. Seismic data library sales are expected to remain relatively flat and fourth quarter earnings will be significantly lower than current estimates.

Michaelsen

Chairman Reidar Michaelsen said, “We are clearly disappointed that the poor market conditions which have prevailed for the past two years have prevented us from achieving full utilization and adequate returns on our assets. However, we have observed a gradual increase in business activity and expect the overall geophysical market to continue its recovery as we move into 2001. The Company has now sold its interest in Spinnaker Exploration and its data management business and, further, intends to sell or otherwise realize value from other non-core assets during 2001. The sale of these investments in recent weeks has improved the Company's liquidity position and allowed it to reduce outstanding debt. We remain committed to the sale of the remaining non-core assets which should allow for further debt reduction in 2001.”

Stop press!! PGS president Bjarte Bruheim resigned effective 7 February 2001.

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Full wave acoustics (January 2001)

Magnetic Pulse Inc. has developed new patented signal processing software for full waveform sonic log processing.

Fremont, CA-based Magnetic Pulse Inc. has released new full waveform sonic processing software – XACTware. Using patented acoustic signal processing technology, the multiple tool is said to deliver unprecedented accuracy and speed. XACTware is logging tool independent and produces accurate results from all of the currently available full wave sonic or acoustic tools.

Phase

XACTware computes phase distribution for each receiver and compares matching signals from receiver to receiver within the specified time range. Neither amplitude or frequency variations among receivers impact the accuracy of the results. Comprehensive quality control features allow the user to quickly identify problematic intervals in the logs and cross check each against the recorded raw data for veracity. XACTware is available for Win95/98/2000/NT Desktops and Laptops for on-site processing.

Pulse

MPI was founded in 1985 to commercialize pulsed technology originally developed for military applications. This work led to the development of the XHR pulsed induction tool - which uses 10 million watt pulses. More from www.magneticpulse.com.

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Seismic Storefront (January 2001)

WesternGeco and Veritas are cooperating on the development of seismic e-commerce standards and technology for use on the Schlumberger portal IndigoPool. The ‘Seismic Storefront’ will be open to all IndigoPool customers.

Veritas DGC and WesternGeco have signed an agreement with IndigoPool on new technology for geophysical e-business. The companies will co-develop standards and new technology to publish, market and license multi-client seismic data on line.

Multi-client

Veritas and WesternGeco own and market multi-client seismic libraries totaling over 3 million linear kilometers of 2D data and 540,000 square kilometers of 3D data. The combined libraries cover virtually every important oil and gas-producing basin in the world. Under the agreement, the companies will publish their respective data libraries on the IndigoPool Web site.

Seismic Storefront

The technology developed by the venture will be available to all owners of seismic data through IndigoPool. Using this new technology, sellers will be able to create and manage a private ‘Seismic Storefront’ within the IndigoPool e-marketplace, from where they can reach a global pool of buyers, exchange highly technical information with their clients, and conduct secure business transactions online. The Seismic Storefront will be accessible on the IndigoPool Web site or directly through the seller’s own Web site.

Woodruff

Varitas’ e-business director Randy Woodruff said “Adopting technology that makes it easier for customers to do business with us in an e-commerce setting has been our goal in this collaboration with IndigoPool.”

Magyar

IndigoPool president Dan Magyar added “We are pleased to join with the leaders of the geophysical industry to create true e-commerce technology for the benefit of the global multi-client seismic business. IndigoPool is already the premier site for global oil and gas properties and exploration acreage, with more than $3 billion in current listings. With this new venture, we combine the oil and gas properties business with the seismic data business in a single, powerful e-marketplace.”

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