CGGVeritas (Compagnie Générale de Géophysique-Veritas, NYSE: CGV) is the world’s leading international geophysical company. It provides oil and gas companies with solutions to gather and process geophysical data. These solutions include offshore and onshore seismic acquisition, seismic data processing and imaging, as well as reservoir management. Offshore, CGGVeritas operates the industry’s largest fleet with 21 seismic vessels offering the most flexible variety of towing configurations to suit client requirements. The company was created as a result of a 2007 merger between Compagnie Générale de Géophysique and Veritas.
CGGVeritas manufactures geophysical equipment through its subsidiary, Sercel. This equipment includes integrated electronic recording systems, cables, land, ocean-bottom and and borehole sensors. Through Hampson-Russell Software & Services, CGGVeritas offers a range of geophysical interpretation software and reservoir characterization services aimed at enhancing customers' knowledge of their prospects and reservoirs. Hampson-Russell has an installed base of more than 1400 licenses at over 500 petroleum and service companies worldwide.
CGGVeritas operates a fleet of 21 seismic vessels which collect data on geophysical properties of land and the ocean floor. The company also operates 41 global processing and imaging centers to analyze and interpret the data. The data is then used by oil and gas companies in evaluating prospective areas, selecting drilling sites and managing producing reservoirs.
The Services segment includes land contract, multi-client land, marine contract, multi-client marine, and processing and imaging. Land seismic acquisition includes all seismic surveying techniques where the recording sensor is close to the ground. The land business line offers integrated services, including the acquisition and on site processing of seismic data on land, in transition zones and on the ocean floor. Land operations include surveying crews and recording crews.
The company provides a range of three-dimensional marine seismic services, principally in the Gulf of Mexico, the North Sea and off the coasts of West Africa and Brazil, as well as in the Asia-Pacific region. Seismic data processing operations transform seismic data acquired in the field into 2D cross-sections, or 3D images of the earth's subsurface or 4D time-lapse seismic data. The images are then interpreted by geophysicists and geologists for use by oil and gas companies in evaluating prospective areas, selecting drilling sites and managing producing reservoirs. CGGVeritas operates 41 global processing and imaging centers.
The company conducts its equipment development and production operations through Sercel and its subsidiaries. Sercel operates five seismic equipment manufacturing facilities, located in Nantes and Saint Gaudens in France, Houston, Singapore and Alfreton in England. In the People’s Republic of China, Sercel operates through Sercel-JunFeng Geophysical Equipment Co Ltd (JunFeng), based in Hebei.
Sercel offers and supports globally a range of geophysical equipment for seismic data acquisition, including seismic recording equipment, software, and seismic sources. Sercel’s principal product line is seismic recording equipment.
The seismic surveying market has struggled after oil producers reduced spending due to the global recession amid an oversupply of vessels. With the seismic industry oversupplied with contractors, CGGVeritas is struggling to obtain price increases for its surveying services. The oversupply has been further exacerbated by the addition of 10 new-build 3D vessels that joined the industry in 2010.
Following the BP (BP) Deepwater Horizon oil spill in May 2010, CGGVeritas' stock price declined by 24%, a drop even more dramatic than BP's. After the oil spill, the Obama administration imposed a six month moratorium on deepwater drilling in the Gulf of Mexico. The moratorium on expansion is negative for drilling firms because their clients, the oil majors, can ask for lower day rates since many drilling firms are shifting their drilling fleets to other parts of the world. As dayrates fall, CGG's clients, the drilling firms, must cut back their spending on the exploration services provided by CGGVeritas.
CGV's broadband marine solution BroadSeisTMis is seeing increasing interest with 8 successful projects since its launch in June 2010. Also, demand for CGV's advanced capabilities such as RTM 3D gather depth imaging technology and shale gas reservoir solutions is driving growing revenue. In response to growing demand for its technology, CGV has opening a data processing center in Copenhagen. Additionally, the company's sales in Saudi Arabia have increased with two large OBC contract in that country.