Houston Chronicle: Baker Hughes says profits up fivefold.
"Also Monday, the company announced another step toward a deal that would allow it to shake up its seismic business.
"Baker Hughes and Schlumberger got the go-ahead from antitrust regulators on Monday for their seismic joint venture to be called Western GECO, the combination of the two largest such businesses in the world.
"The venture would bring together the seismic acquisition fleets, data processing and seismic libraries of Baker Hughes' Western Geophysical with those from Schumberger's GECO-Prakla business unit.
"Baker Hughes would own 30 percent and Schlumberger would own 70 percent of the venture, which lacks only foreign regulatory approvals before closing by the end of this year."
Oil and Gas Journal: BP launches $500 million 4D seismic program for the North Sea.
"BP has begun a $100 million/year, 4D seismic program for its North Sea fields that will last at least the next 5 years, said BP Thursday. The supermajor said a $10 million, 4-year seismic processing contract awarded Thursday to Compagnie Generale de Geophysique was the first in a number of contracts for its 4D seismic data initiative."
Oil and Gas Journal: Technological development, personnel shortage remain critical points, says panel.
"Jim Wicklund, oil field services analyst for Dain Rauscher Inc. ... said oil service companies should value their technology more to get a better return on capital. The fact that many exploration and production companies have shut down their technology research and development centers should make the technology of service companies more valuable."
Stick it to them!
Oil Online: BP commits to major investment in North Sea seismic industry.
"BP awarded a four-year contract to CGG expected to be worth in the region of $10 million for the processing of a new generation of field seismic data [4D seismic data processing]."
Los Angeles Times: Scientists Increase Estimate of Global Warming's Severity.
"Global warming may boost world temperatures by up to 11 degrees Fahrenheit by the end of the 21st century, a figure substantially higher than previous estimates, according to a confidential draft report prepared by an influential group of climate scientists sponsored by the United Nations.
"Moreover, `there is now stronger evidence for human influence on global climate,' the scientists concluded in their preliminary report, which was distributed to more than 100 governments this week for review."
...
"The greater increase is projected in large measure because of efforts to control pollution from industrial facilities and power plants. Pollution-control measures have greatly reduced the amount of sulfate particles that cause acid rain and a variety of health problems. But those particles also have a cooling effect in the atmosphere because they deflect the sun's heat."
I attended a Geophysical Society of Houston data processing meeting two weeks ago on travel time computation for prestack depth migration. (If you're not a geophysicist, and you'd like to know what I'm talking about, please read my overview of seismic data processing.)
The first speaker at that meeting was Mo Le-Wei of Veritas, who repeated his SEG presentation on traveltime computation for the SEG/EAGE 3-D salt model. Le-Wei was calculating travel times by ray tracing the velocity model, and he had an interesting criterion for travel time selection that was new to me.
The current industry-standard method for 3-D prestack depth migration is, of course, the Kirchhoff algorithm. Kirchhoff depth migration is an embarrassingly simple procedure for seismic imaging in areas with complicated velocity structures. It uses traveltime tables to map the reflection events in each seismic trace of a prestack survey into a subsurface image volume. The most significant difference between competing implementations of Kirchhoff depth migration is usually the manner in which the traveltime tables are computed.
When using ray tracing to build traveltime tables, it is necessary to specify a travel time selection criterion because seismic energy from one source may arrive at a point in the subsurface by traveling along two or more different ray paths. Because our traveltime tables are usually single-valued, we have to choose which raypath travel time we store for subsequent use in imaging.
Le-Wei tested three different criteria for traveltime selection. They were shortest path, minimum ray bending, and minimum velocity contrast. His conclusion: minimum velocity contrast wins. Two sentences are key in explaining why. The first is:
"The instability of ray selection method can result in using different traveltime branches for adjacent subsurface cells."
When Le-Wei refers to the "instability" of the ray selection method, he is not referring to some numerical instability. Instead, he is referring to how likely a particular selection criterion is, when choosing ray-based traveltimes, to choose ray paths corresponding to the same wavefront for two adjacent subsurface image points. In the next sentence, Le-Wei states:
"Switching from different traveltime branches may lead to incoherent images."
So minimum velocity contrast produces the best results in Le-Wei's examples because it is less fickle than the other two methods. When faced with a multi-path situation, if the MVC criterion chooses wavefront A over wavefront B at one image point, it tends to choose A over B everywhere.
Given this observation, it would seem reasonable to try to design a traveltime selection criterion that explicitly attempts to minimize wavefront switching. Ted Stieglitz and Scott Morton addressed precisely this point in their SEG presentation in Calgary. Ted will be repeating this presentation at this Friday morning's AGL meeting at UH.
Oil and Gas Online: EarthWave 1.2 seismic imaging software shipped.
"`EarthWave is the technology cornerstone of our advanced seismic imaging solutions,' said Mick Lambert, president and COO of GX Technology."
The Sirius 2D and 3D migration packages are direct competitors to Paradigm's Geodepth Power software. I've worked with the Sirius product line a lot over the last ten years. It's 3D model building capabilities aren't as sophisticated as those in Power, but I've done a lot of wonderful imaging work with Sirius 2D (if you will pardon my saying so).
GX II and GX III are modeling packages with 25 years of history, and, in my opinion, are industry leading illumination study tools.
I had lunch today with Ted Steiglitz and Carolyn Peddy Courville. Carolyn and I both worked in the geophysics department at the Houston Advanced Research Center a few years ago. A geophysicist with a Ph.D. from Cambridge, Carolyn P.I.'d a couple of research projects at HARC and was the co-author of a best-selling book on AVO. Then one day five years ago she announced that she was giving it up to go to law school.
Now she's a successful lawyer with a lot more job security (and undoubtedly more money) than those of us still slogging along in geophysics. She has two beautiful children, four and six, and probably the world's most supportive husband. And, unlike myself, she hasn't aged a day in the last five years.
Houston Chronicle: Seitel benefits as oil companies go exploring.
"Total seismic sales are up 96 percent in the third quarter, year over year, and expected to exceed $38.5 million.
"Seitel said it saw a fundamental change in its business beginning the second week of June when oil companies started to spend money on Seitel's services."
Wall Street Journal: ChevronTexaco Vows Not to Cut Output, But Will Curb Exploration and Spending.
"Analyst Fred Leuffer of Bear Stearns said he expects ChevronTexaco will only achieve about 2.5% production growth in the first few years of the combination, far below the 4%-to-4.5% goal. However, the analyst expects the deal will generate cost savings much greater than predicted. `They'll pierce through $1.2 billion in nothing flat,' said Mr. Leuffer. `The duplication is immense. You don't need two sets of geologists and two sets of engineers.'"
Wall Street Journal: Texaco, Chevron Agree That Merger Could Require Shedding Certain Assets.
"The companies said they expect to realize about $700 million in savings from exploration and production efficiencies, and about $500 million from job cuts. (The merger is expected to result in a loss of about 4,000, or 7%, of the 57,000 combined jobs at Chevron and Texaco.)"
Oil and Gas Journal: Chevron, Texaco to merge in $36 billion deal.
"ChevronTexaco Corp., as the combined company is to be known, expects yearly cost savings of `at least $1.2 billion' within 6 to 9 months of the merger's completion. The new combine said its enlarged global operations would represent reserves of 11.2 billion boe, daily production of 2.7 million boe, and assets of $77 billion.
....
"The merger ... was described by [Current Chevron Chief Executive Officer Dave] O'Reilly as `good news' for the US, as it positioned ChevronTexaco as a `much stronger US-based global energy producer better able to contribute to the nation's energy needs. That's good news for the country because the United States will have an additional top-tier energy company better positioned to compete effectively with the international majors.'"
Wall Street Journal: Chevron Reaches Agreement To Buy Texaco for $35.1 Billion.
"The deal unites the second and third-largest U.S. oil companies. Under terms of the deal, Chevron has offered 0.77 of a share for each share of Texaco. The combined company will be called Chevron Texaco....
"Based on the 4 p.m. price Friday on the New York Stock Exchange of $84.25 for Chevron, down $3.06, Texaco is valued at $64.8725 a share. While that's an 18% premium to Texaco's close of $55.125, down $1.88, the premium works out to about 25% based on the average price for the past 30 days."
Good grief, I just gave up on TX a week ago, and sold my shares at $52.
New York Times: Chevron Is Said to Be Close to Deal to Acquire Texaco.
"Because of the overlap in their projects, industry experts expect significant job cuts and streamlining. This year, Exxon Mobil said it had billions of dollars in savings thanks to its 1998 merger....
"But the new company would have to pass muster with an F.T.C. that proved highly critical of the BP Amoco-Arco deal."
Whoa! My modest web site has been complimented by a geophysical demigod of great stature! In an email, Dr. John Castagna writes:
"Hey Walter! Your Web page is cool."
In my book, that's high praise.
John contributed a particularly motivational editorial to the September issue of The Leading Edge. Here are some pearls of wisdom from that piece:
Dr. Castagna on higher education:
"It is frankly stupid to study for 10 years to become highly proficient in a field where you will be lucky to survive until age 48.5. If your course of study is longer than 1.5 years you are frankly an idiot."
On job loyalty:
"You are a free agent, a hired gun, and your only loyalty must be to yourself. Modern companies are not a family. They do not care about you or expect you to care about them. They will sell you out in an instant if that is the more profitable choice."
And finally, on the intangible rewards of a professional career:
"You are an interchangeable part who fills a box or line on the organization
chart. You are infinitely replaceable. Your knowledge, talent, experience, etc.,
do not appear on a balance sheet and thus have no value."
Castagna's sarcastic contribution to The Leading Edge was part of a
special section on "Education and Careers." Kurt Marfurt and the staff of AGL contributed an article summarizing
anonymous interviews with representatives of 22 energy companies. When I
first read this report last spring, I was shocked by the frank responses of
the participants. This report gives some context - and justification - to John's
rant.
In a postscript to the Marfurt article, Frank Levin asks some questions about
the future of the geophysical profession. Kurt's reply includes the following
(dead-on) observations about current practices of the major oil companies and
the future role of the national oil companies:
"The current strategy, in place for the past several years, has been to focus
this experienced [major oil company] workforce, armed with modern technology on
new exploration areas Central Asia, offshore Brazil, Trinidad, and West Africa....
"The opening up of international markets and exploration opportunities will
continue for the foreseeable future. However, the negotiators in these countries
will learn from their predecessors. And as the universities continue to educate
the international community, developing countries will be able to set up
first-class technical organizations of their own along the lines of Saudi Aramco
and Pdvsa/Intevep. More interestingly, these formerly developing countries will
become competitors and operators in areas that were previously the exclusive
playground of the majors. At the very least, developing countries will be every
bit as savvy in using the services of reputable contractors as are the current
international oil companies....
"Universities will continue to educate geophysicists, geologists, and engineers....
Many graduates will be employees of the national oil companies. These students are
bright, hardworking, and have the enthusiastic support of their management to
become technical experts. In 10 years, the international oil companies will face
them as competitors."
Norsk
Hydro selects GeoQuest as core software provider.
Schlumberger
completes seismic survey in Gulf of Mexico.
"Schlumberger Oilfield Services announced delivery of final poststack P-wave migration
following completion of the largest nonexclusive multicomponent (4C) seismic survey
ever acquired worldwide.... The initial survey, 120 miles southeast of Galveston,
covers about 45 blocks of West Cameron."
PGS
in talks with CGG and Veritas.
"Petroleum Geo-Services, the world's second-largest seismic services company,
on Tuesday said that it was in initial talks with its rivals, France's Compagnie
Generale de Geophysique and Houston-based Veritas, about a possible
combination of their businesses."
Since I'm on a conservation and "alternate energy sources" kick, I thought this was kind
of cool:
Plan
announced for energy savings.
"U.S. government officials and the building industry
Wednesday unveiled a long-term plan to
slash the energy consumed in new office
buildings by as much as 50 percent in the next 20 years."
WSJ: Oil
Companies Renew Their Efforts To Develop More Energy Sources.
"BP Amoco, which recently adopted the slogan
`Beyond Petroleum,' plans to expand its wholly
owned BP Solar subsidiary into a $1 billion business
by 2007 from $200 million today. Royal Dutch/Shell
Group is investing $500 million in renewable energy
sources, including biomass, solar and wind power.
U.S. companies, though, are lagging. Texaco Inc. is
the most aggressive of the major U.S. oil companies
in seeking to develop alternatives, but it is betting
primarily on fuel cells, which produce electricity
using hydrogen.
....
"BP Amoco, the world's largest maker of solar panels,
both in sales and volume, has yet to turn a profit on
its solar investment. But it makes solar panels for far
less than it did 20 years ago -- $7.50 a watt installed
today compared with $80 a watt installed in 1980.
....
"Then there is the hotly debated matter of whether or
when world oil reserves will run out. `Not in 10
years, not in 20 years,' contends Larry Goldstein,
president of the Petroleum Industry Research
Foundation. `But sometime.' In fact, many experts
believe the world has about 40 years worth of proven
reserves, but companies such as BP, Texaco and
Shell believe alternative energy will become
increasingly attractive even before the oil runs dry.
BP and Shell predict renewable sources may fill up to
50% of the world's energy needs by 2050."
Watching the competition:
Oil&Gas Journal: Landmarks
Graphics launches five projects at SPE.
"Included were a multiyear agreement with 4th Wave Imaging Corp. of Laguna
Beach, Calif., to jointly develop 4D seismic solutions for reservoir
management...[and] an agreement with Reservoir Characterization Research and
Consulting Inc., also known as (RC)^2, to develop a geostatistical
module software.
....
"Landmark and 4th Wave will work under their agreement to
develop and commercialize proprietary 4D cross-equalization
technology recently licensed from Chevron Petroleum Technology
Co. Officials said 4th Wave is developing breakthrough
technologies in 4D seismic, using advanced imaging and inversion
techniques to resolve reservoir management decisions.
....
The (RC)^2 software will be designed to perform geostatistical
simulations of geological and reservoir properties in a 3D
geocellular model developed by Landmark. That module addresses
the majority of geostatistical algorithms needed by geoscientists,
officials said."
Speaking of 4-D, here's a case study:
World Oil: Development of 4-D reservoir
management West of Shetland.
"By embracing 4-D seismic as it emerged from an experiment to a reservoir
management tool, BP's commitment of faith and money has paid off."
Oil-drilling
companies find it difficult to round up workers.
"Higher crude prices have highlighted U.S. dependence on oil
imports and have prompted a renewed call from some
political leaders for increased domestic production. U.S.
output is down nearly 40 percent from the peak in 1970 of 9.6
million barrels a day."
