with Benoit Barrière, ndonesia Geomarket Director, CGG Veritas Indonesia
Would you begin by first presenting CGGVeritas’ operations in Indonesia to our readers?
CGGVeritas has been active in Indonesia for forty-six years and therefore has a long and successful track record of operations in the country. As a worldwide geophysical services provider, we often develop our international operations through partnerships, and, in Indonesia, we have been working with the leading Indonesian oilfield services company, Elnusa, practically since the latter began their seismic operations around thirty years ago.
In Indonesia, CGGVeritas is predominantly involved in shallow water and deepwater seismic operations, where we have significant experience and expertise, and also seismic data processing thanks to the presence of our Jakarta processing center. In particular we have conducted many surveys with success in the South Mahakam area. Indonesia’s geography, as an island, means that it has high potential for “transition zone” seismic operations. As a matter of fact, some PSC blocks are a combination of land, shallow water and offshore acreage. In addition, CGGVeritas recently created a JV with Elnusa to operate a 4-6 streamer vessel, the Finder, which is Indonesian-flagged, for deepwater seismic acquisition. It was originally conceived to comply with the “Cabotage law” in Indonesia which was due to come into force in early 2012. But, due to concerns over availability of Indonesian-flagged vessels in the oil & gas sector, the Indonesian government decided to grant an exemption for this sector until the end of 2014.
Very recently, Elnusa decided to leave this JV as such an activity no longer fits with its business model. Today both partners have worked for a smooth transition where CGGVeritas is taking over operation of the vessel which it is now managing from its local base in Singapore. The vessel has retained its Indonesian flag.Nevertheless, our partnership with Elnusa is continuing for shallow water operations. As far as true land (onshore) seismic acquisition is concerned, we are not active because of the very low pricing, or only indirectly via the equipment sales made by Sercel, our seismic equipment manufacturing subsidiary.
How do you see the operational environment for your Indonesian-flagged vessel?
Currently it is not clear whether the “Cabotage law” will be enforced in the oil & gas sector in 2015. There are a number of factors likely to influence this. On the one hand, oil & gas companies are quick to point out the distinct lack of seismic vessels with an Indonesian flag. Indeed the Finder is the only Indonesian-flagged seismic vessel today on the market. On the other hand, the Indonesian government is heading towards greater local content. This means we are currently in a Catch-22 situation whereby companies are unwilling to invest in Indonesian-flagged vessels until they see movement from the government towards enforcing the “Cabotage law”, while the government is reluctant to impose a law which will harm offshore exploration. As a first mover, CGGVeritas is therefore continuing with its specific promotion and development efforts to make sure all interested parties are aware of this situation.
With this situation in mind, how do you intend to get returns on your investment?
Although the Finder has been kept busy recently, promoting this first Indonesian-flagged vessel is my number one priority at the moment. The Finder is well adapted for the small deepwater acreages you find in Indonesia, and is also particularly suitable for shallow water operations with a draft of only 4.5m. This vessel is also able to record data using BroadSeis, the CGGVeritas broadband marine solution, and recently successfully conducted a multi-client/proprietary BroadSeis survey offshore West Timor. The processed data from this survey will be available at the end of the year, and we expect to see a step-change in terms of image quality.
Leaving this vessel aside, what are the other opportunities you see in the market?
Clearly in shallow water seismic and in offshore seismic. As an example, the largest marine seismic survey ever tendered in Indonesia – 9,000 km2 for BP’s West Aru’s blocks – is now open for tenders. Of course we expect all the major international players to bid for this project. With our fleet of four high-end 3D acquisition vessels dedicated to the Asia-Pacific area, we are a strong contender for this type of business in Indonesia.
Looking forward a few years, how do you expect Indonesia’s seismic market to evolve and how will CGGVeritas be seen at this stage?
So far there has been no significant surge in business, but we must be patient. In particular, there is a lack of high-quality “spec” or multi-client data in some areas. Such a business model needs to be developed further to exploit the full potential of the oil and gas resources in Indonesia. When CGGVeritas invests in a country it is for the long term, and not just for the next two-three years. In particular, the future of our presence does not hinge on the “Cabotage law”. CGGVeritas is proud to be a long-term partner of Indonesia and the company is well positioned across the seismic market from equipment through shallow water and offshore acquisition to data processing. The Executive Committee of CGGVeritas recently decided to create the position of Geomarket Director in Indonesia, a position we did not have before. This in itself is a good indication of our commitment to the country. Our Geomarket Directors are not always dedicated to just one country although we have one for Brazil, one for Russia, and one for China. The fact that there is a Geomarket Director dedicated to Indonesia means that we view this as an important market for our global presence. We are a long-term company with a long-term commitment here and we wish to strengthen our position in the country.
What would be your personal goal over the coming years?
My personal mission is to convince all the key stakeholders in Indonesia to use more high-end seismic technology offered by CGGVeritas, such as its unique Broadband technologies (BroadSeis, BroadSource, SeaRay, etc.). S