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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This article originally appeared in Oil IT Journal 2001 Issue # 1. For more information or to comment on this topic email here.