Changing Times Require Adaptability

Q: How has PGS evolved amid the changes in the industry?

A: Even though there are many new companies coming to Mexico they are generally not yet incorporating new seismic exploration into their activities. At PGS we are aware that we have to evolve to match the requirements of the times and this includes a deep analysis of our business model because these new conditions could well demand changes in our Mexico-based operations. We are fortunate, however, to be an international company, which allows us to make adjustments to meet our overall global business requirements.

Q: How will the nominating process change the way players interact?

A: The nomination of blocks will certainly open some possibilities across the industry but there is still little clarity about how this will impact the seismic business. If PGS finds an interesting area outside the current planned blocks for the coming bidding rounds then oil companies will get involved in the process to nominate new blocks there. If the process is not clear, companies might not be interested in nominating an area if it could result in existing blocks being removed from the planned rounds. Some of the new areas where blocks may be proposed may have more potential reserves than the blocks already established but without investment to develop seismic studies they will remain mere possibilities.

Seismic processing and interpretation is not immediate. It is complex, technical work that could take oil companies two to three years. If clients do not have the assurance that nominations will be heard and that blocks will not change in the future they will not accept the risk associated with committing to a program. We believe the best approach for Mexican institutions is to set a core of areas to which the bidding rounds will stick and from there include additional blocks based on the nominating results.

The idea of CNH and the Ministry of Energy trying to be flexible and work with the oil companies is positive but they have to understand that companies also need the certainty that the foundation of the bidding rounds or the assigned blocks for future bidding rounds will not be affected by any nomination. We will certainly push CNH andthe Ministry of Energy to allow us to promote our data and establish rules for a process that allows nominations that do not affect the companies’ longer range planning.

Q: Why did PGS choose Schlumberger and Spectrum as partners?

A: Our main goal for the alliance with Spectrum and Schlumberger was to gain a strategic advantage against our competitors. We did not require equipment or the know-how to carry out this data acquisition project but the alliance certainly helped us to handle the risk better. After talking with Spectrum and Schlumberger, we came to an agreement on how to best “de-risk” the investment. Technologically speaking, the program was rewarding as we worked to extend zones around pre-existing data held by CNH and complemented areas that lacked information with our own studies, with excellent results.

Q: How will technology shape PGS’ business in Mexico?

A: With the advancement in computer technologies it is completely feasible to run a processing operation in a flexible and remote way. These advancements will help us avoid investing heavily in static infrastructure and have a more flexible business model in which we can adapt to a client’s needs. PGS is strongly focused on creating better and more powerful technologies to improve data processing. Our R&D department has created algorithms and processing flows that allow for more precise and detailed analysis of the subsurface while decreasing human error. We have published papers on techniques such as Full Wave-field Inversion (FWI) that allow the use of computer algorithms without the need for interpretation to refine subsurface models. In the future, it is possible that by using only computer power to run complex iterative processes we can come up with reliable subsurface models in complex geological areas that at the moment can be difficult to image correctly.