Goal to establish strong position in permanent reservoir monitoring market
TGS-NOPEC GEOPHYSICAL has acquired 100 per cent of the shares of Stingray Geophysical. The transaction will provide TGS with a strong position in the rapidly growing market for Permanent Reservoir Monitoring (PRM) solutions. The acquisition will substantially increase TGS’ addressable market through access to production seismic spending from large international oil companies as well as national oil companies, while maintaining its successful asset light model.
The core technology for Stingray’s fibre-optic sensing system was originally developed in the mid-nineteen eighties, for anti-submarine defense applications. Since the company’s incorporation in 2006, Stingray has been backed by a consortium led by the venture-capitalist firms Energy Ventures, Chevron Technology Ventures, Energy Capital Management/Statoil Venture and Cody Gate Ventures. Including the defense investment, more than $80mn has been invested in the technology to date.
Reservoir optimisation
Robert Hobbs, CEO of TGS said, “The age of “easy to find” oil is over, forcing oil companies to increase investment in their existing fields to extend production and increase recovery factors. The acquisition of Stingray allows TGS to access a larger portion of the reservoir optimisation market. The combination of TGS and Stingray will leverage both companies’ strengths to create a powerful PRM offering to the industry.”
Martin Bett, Managing Director of Stingray added, “TGS brings complementary capabilities, a global organisation, established seismic project management skills and financial strength to Stingray. As a part of TGS, Stingray is now well positioned to deliver innovative PRM solutions that will assist our clients to increase production and reserves whilst decreasing risk and costs of their Enhanced Oil Recovery programs.”
The 4D seismic market, of which PRM is an integral and increasing part, was estimated to be over $1bn in 2010 with the majority of data being acquired by towed streamers.
Expectations are for the 4D market to exceed $2.5bn within the next four years. New PRM installations are expected to trend towards optical versus electrical solutions due to the expected increase in reliability and flexibility that this technology offers, especially in deep water.
