IBM throws in the towel! (September 1998)

IBM is about to sell-off its E&P softwarebusiness to Petroleum GeoServices (PGS). Included in the deal, currently in due-diligence,are the PetroBank Master Data Store, Mapper and the new GIS database front-end, Surfer.

IBM is to end the ‘hands-on’ side of its involvement in E&P IT. Following the recent sale of the PetroBank Project Data Store, and as forecast by PDM (Vol. 3 No. 6), IBM is now to dispose of its remaining E&P software assets to Norwegian Petroleum Geo Services (PGS). The whole of the PetroBank product line (Master Data Store, Mapper and Surfer) will now be supported by PGS. An indication of a more general disaffection for E&P IT was IBM’s conspicuous corporate absence from the Society of Exploration Geophysicists’ (SEG) annual conference and exposition, held in a steamy and storm-menaced New Orleans.

Mark Meyer, Manager of E&P Marketing and Solutions for IBM’s Process and Petroleum Solutions Unit told PDM that IBM and PGS were close to a definitive agreement and that staff, who have been invited to move to PGS along with the product line, were ‘excited about the future of the product’. Both IBM and of course PGS remain positive as to the future of the software product line. Meyer re-iterated IBM’s belief that data is a critical asset and therefore needs good management. Cycle times can be dramatically reduced as witnessed by Chevron’s use of PetroBank as tool for a quick-look at the massive Norwegian dataset before a recent bidding round. The newer product, Surfer is shaping up nicely as a means of offering a single cohesive spatial data interface for disparate data sources.

Explaining the disposal, Meyer told PDM that IBM was ‘an ideal workshop for technologies, and for bringing them to market’. But to have gone further would have required the development of close links with the other industry leading vendor applications, which represent 80-90% of the marketplace. The disposal to PGS will allow a company with ‘deeper E&P skills’ to leverage them to grow the market share of their own interpretation suite. IBM believes that PGS will be a good home for the PetroBank product line.