Industry leaders see hope

CGG’s Robert Brunck and Halliburton’s David Lesar see light at the end of the tunnel. CGG intends to restore operating margins, while Halliburton is looking at new corporate acquisitions for its Landmark Graphics unit.

CGG Chairman Robert Brunck, commenting the service company’s year 2000 financials, expects the seismic market to grow by approximately 15% in 2001, following “consistent announcements of increased investment budgets by most of the E&P Companies.”

Spending prioritized

Such spending will however be prioritized toward the development of already identified prospects rather than on exploration, leading to “a slower initial recovery of the seismic sector as compared to other services.”


CGG anticipates that the bulk of growth will take place during the second half of 2001. The strength and quality of the recovery will depend on the market share and pricing strategies of the different participants in the sector. “CGG is firmly engaged in a policy of restoring its operating margins, by capitalizing on the benefits of its in depth strategic repositioning and the re-balancing of its portfolio of activities between Land and Offshore” concluded Brunck.

Poised for upswing

In an interview with Reuters, Halliburton CEO David Lesar believes the company’s troubled engineering and construction business is poised for an upswing in operating income in 2002. Lesar denied reports of a sell-off of its engineering and construction business.

No divestment

Halliburton will continue to review its business portfolio, but the case for divesting engineering and construction was likely to become less persuasive as markets improve. Lesar stated “I think that when things recover, people will start to appreciate the kind of return on capital, the cash flow and the earnings contribution that it can make and I think they'll see that it really fits nicely into the organization”.

Niche acquisitions

Lesar said Halliburton would continue to make niche acquisitions, particularly in areas that would complement the operations of its Landmark Graphics unit. Citing the recent acquisition of the PGS Data Management division, Lesar said “I think you'll see us continue to look at expanding Landmark’s portfolio of assets because it’s been so successful and the management of data has become so important to our customers.”

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