Projects are being cancelled, vessels are being warm and cold stacked, vessel upgrades are being put on hold.
This is the situation more than a month into the combined Covid-19 and low oil price crisis.
PGS recently announced stacking of two of their eight vessels in Q2, and warm stacking of one additional vessel in Q3. Further stacking might be needed as the company’s Q1 2020 Report confirms zero vessel months currently booked for Q4.
Multi-client (MC) revenues have suffered from both low oil price and delayed sales and governmental processes in other parts of the world, which requires a heavily reduction of capital expenditures.
Facing their first NWEuropean seismic season without an own fleet, CGG is awaiting approval from the authorities to undertake a MC3D survey of 13,200 sqkm, crossing the Viking Grabens from Tampen (West) to Horda (East) in the Northern North Sea, by a Shearwater vessel.
During the latter part of March, CGG commenced the acquisition of the “Cornerstone OBN Phase 1”, a MC project in cooperation with MagSeis Fairfield, over the Central Graben. The project is moving forward as per schedule, with estimated completion Q3/Q4.
Although struggling to secure new work, Magseis Fairfield has at least not seen any projects being cancelled due to the Covid-19 and oil price crisis so far.
With the largest fleet in the industry, Shearwater is bound to consider both warm and cold stacking of vessels at some point, to adjust to the market situation.
So far, the company has seen only a few projects cancelled on a global basis, and projects in Europe are moving ahead as planned. Their vessels Tasman and Cook are currently acquiring a 4D OBS survey for Lundin in the Norwegian North Sea.
The company who might have suffered the most recently, with its entire back log cancelled, is EMGS. Only a skeleton crew remains in the company, forming the basis for a future scale-up.
The company announced on March 27 that the Petrel Explorer will be redelivered at the end of the current fixed charter period, and that the Atlantic Guardian will be cold stacked as soon as practicable possible. The Petrel Explorer is currently acquiring a pre-funded MC survey in the Norwegian North Sea.
Polarcus will be returning to the NCS this year, after being absent in 2019, and again to acquire MC 3D data for TGS.
So far, no major projects have been cancelled for Polarcus, but the company announced a cost reduction plan on March 31, to achieve cash savings of over USD 15 million. This implies redundancies and salary reductions for both onshore and offshore personnel.
TGS announced on April 2, that acquisition of their Atlantic Margin 20 (AM20) MC3D project of 5,600 sqkm will commence as soon as the marine seismic acquisition season gets underway in NWEurope.
In addition, TGS is planning to acquire Phase 2 of the joint MC Node survey with Axxis, starting this quarter.
Axxis announced late March that a smaller project in the North Sea had been cancelled, which does not help a company already under pressure.
MCG has had to cancel their 2020 plans to add Norwegian Sea acquisition to their Regional Deep Imaging survey, commenced in 2018. Fortunately for MCG, the early participants have agreed to sponsor this in 2021 instead.
Their MC3D project of approx 1800 sqkm, stretching over Q31, 35 & 36 in the Norwegian North Sea should move on as planned, pending approval from the authorities.
SeaBird has seen two projects being cancelled in West Africa and announced on April 14 that the remaining outfitting of the Fulmar Explorer is postponed. The preparatory work for rigging of the Geo Barents was completed, but the actual rigging of estimated USD 600k will not be undertaken before an award.
Last week, the company received a letter of award for a source contract in South America for 1-1.5 month’s work in Q3.
Petromarker have high hopes that the correct prediction of the dry well on PL 889 based on their 2017 EM data ( https://expronews.com/exploration/triumph-for-em-technology/ ) will increase their activity level after the current crisis.
TEXT: TORIL LEITE