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Interview

with Don Pham Long, SVP Geomarket Director South East Asia and Indonesia, CGGVeritas Singapore

01.10.2010 / Energyboardroom

Would you briefly outline for the readers of Oil and Gas Financial Journal the structure of your operations in Singapore and its strengths as a hub for CGGVeritas?

Don Pham: The CGGVeritas Marine division in Singapore, locally headed by Rollin Delzer, handles logistic support and marketing for the company’s seismic vessels operating in the region. We also have a processing division in Singapore which takes the data collected through acquisition and reconstructs the subsurface imaging of the Earth. Processing is well known in the region for producing the best technologies for subsurface imaging. Our oil and gas company clients then use this information to decide where to drill. The third division in Singapore is Sercel, which has a regional base dedicated to the repair and support of Sercel streamer products, used to record seismic waves in the region.

The Singapore office acts as a strategic base for CGGVeritas in Asia-Pacific, offering ease of travel around its traditional and emerging E&P locations. Over the years we have established a strong and experienced geophysical team here and are the only company with such a highly skilled set of geophysical experts on site in Singapore. Also our Singapore center has a long R&D history and has produced many breakthrough technologies. We are very committed to maintaining this experience and expertise.

In addition CGGVeritas has the latest high-tech supercomputers operating in Singapore thanks partly to the ease with which it is possible to acquire state-of-the-art electronic equipment in the country.

Rollin Delzer: As the hub of our local operations, Singapore lends R&D and technical support to all our satellite operations in the region, including in Perth, Jakarta, Bangkok, Mumbai and Beijing. Furthermore, in terms of expat workers, it is much easier for the company’s employees to attain visas for Singapore than in neighboring countries.

Asia-Pacific represents 26% of the company’s overall revenue. Could you outline for our readers how CGGVeritas has been growing in the region and its relative importance today?

D.P.: Since 2006 the company has grown significantly in the region and the marine division has almost doubled in size. Based on the current economic climate, we have recently reduced the number of vessels and currently operate six as a way of bringing supply in line with demand. Asia is key to CGGVeritas and represents the fastest growing region for the company. Europe is a more mature market and the US with the Gulf of Mexico and the Macondo well incident looks uncertain in the short term.

You had to decrease your fleet because of the crisis but what initiatives could you take to increase performance?

D.P.: The initiatives mostly related to the company’s fleet. The company reduced the size of its fleet and made sure that the operational performance of its vessels was at its optimum level.

R.D.: During the downturn, the company was able to retire its older vessels and Singapore took the opportunity to upgrade the company’s regional vessels to increase performance and address the high-end needs of our clients. This highlighted the importance of Singapore as a maritime hub for the company. The company is continuing to upgrade its fleet as part of our continued plans to increase performance.

Following the acquisition of Wavefield inseis in 2009, what opportunities for external growth does CGGVeritas see in the Asia-Pacific region?

D.P.: The company took a strategic decision to move towards the high-end side of the industry, where demand remained stronger, and therefore in countries such as Australia CGGVeritas sees strong potential for high-end services. Australia would be the key target for growth although smaller markets such as Vietnam and Indonesia are also growing.

Regarding Malaysia and current lower seismic activity, one day this great giant will certainly wake up. The country has remained quieter for the last two years. However, CGGVeritas is starting to see signs of market growth in Malaysia and the country itself has significant potential.

R.D.: India is also a key factor in the company’s growth and there are potential emerging markets offshore China. There is also scope for internal growth in the marine industry.

How do you deal with bureaucratic challenges in the region?

D.P.: Obviously, the company does not have a silver bullet to deal with bureaucracy. Having local operations within each country helps CGGVeritas navigate bureaucracy. Based on this local presence we are more competitive. Malaysia is an example where companies need to establish umbrella contracts in order to operate in the country. These contracts are secured with PETRONAS for five years and they make it difficult for others to enter the market. Overall, we are also assisted by an excellent CGGVeritas team that knows how to operate in the region.

R.D.: The office in Singapore has been here for forty years and this has given the company insight and experience in the region. The international nature of the Singaporean community also gives the company an advantage in working with other countries in the region.

Looking at technology, wide-azimuth was a major breakthrough for the company. How do we see this technology changing the dynamics of the geophysical industry in Asia-Pacific?

D.P.: This technology has not reached Asia yet. It started in the Gulf of Mexico and has propagated to other regions such as South America and Europe. There is huge potential for this technology in Asia. However, it requires large amounts of capital investment and the NOCs dominating Asia take a more cautious approach and are slower at taking up new technology.

Technology will come, however, and even before wide-azimuth technology reaches Asia, CGGVeritas is bringing in the latest technology called BroadSeisTM. This technology is a unique way of acquiring high-resolution seismic data, to provide a clearer image of the subsurface. The company is already deploying it with encouraging results and has shot one set of data in Australia. It is likely to develop very quickly in the Asia-Pacific. We should therefore congratulate Asia for being the first to apply this technology.

What is the timeline for bringing in this technology?

R.D.: Imminent. The company presented the first results of BroadSeis at the EAGE conference in Barcelona in May this year and there was a lot of interest. Since then, CGGVeritas, with the active support of many clients, has expanded this technology to the Gulf of Mexico and has conducted a number of tests including in Gabon and the North Sea. BroadSeis technology represents new opportunities for Asia-Pacific growth because it can provide new information and frontiers will need to be reacquired.

Looking at new frontiers, the areas with good access have been explored already. How will this affect the company and how will CGGVeritas remain the technological leader in acquiring data in more challenging areas?

D.P.: There are several ways of addressing this new challenge. One of them is through new technology such as BroadSeis, which transcends our different activities by offering a combination of industry-leading equipment from Sercel, unique streamer acquisition techniques and proprietary imaging technology. This is the key to its strength. Not many of the company’s competitors are able to put together a full solution that takes technology across the full breadth of our products and services. This, along with our technology leadership, is why BroadSeis is a superior product both for the company and for our clients.

The company cannot stand still. CGGVeritas continuously needs new technologies to remain in a leadership position so R&D continues to be a priority for the company.

As innovators in R&D, do you see CGGVeritas as a trendsetter raising standards for the industry as a whole?

R.D.: In offshore, CGGVeritas is clearly number one in terms of technology and the size of its fleet. In terms of R&D, innovation is very prevalent within the processing group. And of course our Sercel equipment is unrivaled in providing the best quality and performance in the field.

D.P.: In processing, the company delivers the best subsurface image so that oil and gas companies can use this to reduce the risks of drilling. This is how we differentiate ourselves from our competitors. CGGVeritas is the major player in this field. In acquisition the company is very strong and has established long-term client relationships across Asia-Pacific.

R.D.: As for enhancing technical capabilities within the maritime industry, the company would like to access more Singaporean channels for growth. This is particularly true for maritime engineering. On the processing side, we have 80 geophysicists working in our building. This is significant in Asia-Pacific.

What makes CGGVeritas a good employer and stops its workers from going elsewhere?

D.P.: First, specifically in Singapore, it is a good place for families and employees like to remain here. This means that the company enjoys high levels of loyalty. University education in Singapore is also of a very high standard.

Across Asia Pacific and to a larger extent, worldwide, CGGVeritas provides a modern workplace where people can achieve their career goals. We invest in our employees and train them. Offering strong training is a high priority for the company and our staff is given access to world-class development opportunities through our CGGVeritas University.

We have a University Hub in Singapore and the company can bring people in from other countries for training. This represents a major investment but we recognize that our people are our most important asset. Our staff appreciate that the company invests a lot of capital in training. Few other companies are able to do this, and it further creates loyalty.

How do you see the importance of Singapore and Asia-Pacific evolving over the next five years?

D.P.: Firstly, I certainly expect we will continue to grow, and personally, I would like the revenue of Asia-Pacific to more than double. Secondly, CGGVeritas in Singapore will become a more dominant player in the company in terms of total revenue. By expanding its revenue the company could employ more local people, and this would be good for governments and economies. Today, our Singapore office has a workforce of 230 people who work for CGGVeritas and around 50, mostly local staff, who work for Sercel, our equipment division.

I would also like to see a happy workforce and for people to see the company continue to lead the industry. We have a diverse staff and the people who work for the company are very intelligent, efficient and educated.

R.D.: Obviously the company does employ expatriates, but is continuously expanding on its stable local base.

What kind of message would you want to send out to the readers of Oil &Gas Financial Journal both in the region and internationally?

R.D.: When an oil and gas company is considering entering the market in Asia-Pacific it should know that CGGVeritas is the leader in geophysical technology and that the company seeks strong long-term partnerships over the full cycle from exploration to production. We pride ourselves in providing the best service along with our technology, as the two are critical to maintaining our long-term relationships with our clients.

D.P.: CGGVeritas has a strong track record and the experience of forty years of operations here in Asia Pacific. Our vision is to continue to be number one in geophysical services. Every day into the future, the industry has to find reserves which are increasingly difficult to access and produce. This requires the most advanced capabilities from seismic equipment, and acquisition services to the processing technologies that ultimately create images of the subsurface that provide the insights our clients need to achieve success. CGGVeritas is very pleased to work as a long-term partner with its oil company clients to achieve these goals.

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