Seismic Industry Still Reeling From Oil Price Bust
The exploration and production business has been bearing the brunt of slashed investment and reduced budgets in the wake of the oil price crash. Yet, another industry dependent on E&P expenditure has taken even more of a beating: seismic surveying.
The seismic market has not only suffered the reduced exploration allocation, it has been piling huge levels of debt and is unable to flip more return on investment because spending cuts in exploration budgets have left them with less funding prior to completing a seismic survey job. Struggling E&P companies have been renegotiating seismic vessel rates, and many geophysical survey companies have been scrambling to cover their own costs.
As far as the offshore seismic industry is concerned, London-based market research company Technavio has estimated the value of the global offshore oil and gas seismic equipment and acquisitions market at US$4.5 billion in 2021, compared to US$3.1 billion for 2016. The key drivers would be reduced exploration risks, with 3D seismic surveys increasing drilling success rate by 88 percent. Still, by 2020, the 2D seismic surveys would still dominate the global offshore market with a 45-percent share. In three years, the Americas would be the largest offshore seismic market with a 68-percent share, Technavio said in a report from December 2016.