You could never apply to the seismic business the old saw, much favoured by those who have been successful in some activity or other, that ‘you make your own luck’.
You could never apply to the seismic business the old saw, much favoured by those who have been successful in some activity or other, that ‘you make your own luck’. There is an implication that hard work is crucial, hence the wisdom shared by US founding father Benjamin Franklin (1707-90) that ‘diligence is the mother of good luck’ and going back further, Roman stoic philosopher Senecca wrote that ‘Luck is what happens when preparation meets opportunity’.
If we give credence to these immortal sayings, then we must conclude that, in several decades of doing business, seismic service companies have endured a run of unjustly deserved bad luck with very little respite. For surely it has not been for the want of dedication in providing superlative technology for the oil and gas E&P companies dating back to at least the 2D seismic era and everything that has followed. Yet, the business is a shadow of its former days. It is effectively down to two main marine geophysical contractors, neither of which was even operating vessels ten years ago. Last month at the end of the summer season high, only nine or ten of their streamer vessels were in operation worldwide. Ocean bottom seismic, now worth almost as much as towed streamer, is not on a scale to compensate for the overall market decline.”
Of course bad luck can also be associated with bad judgement from which no business is immune. The marine seismic history features its quota of poor decision-making, notably stemming from consistent over-supply of vessel capacity and lack of price discipline. Arguably, its fortunes have always been largely dependent on factors beyond its control, with no solution to surviving the cycles of oil and gas company E&P spending and the price of oil, the latter the key consideration for exploration budgets.
Even so, seismic companies have had to contend with some massive disruptions that can certainly be put down to bad luck, i.e., the consequences of circumstances which they could not have predicted or prepared for. The crises have become with deadly regularity – 1986 oil glut, 1999-2000 oil company consolidations, 2008 financial crisis, 2014-16 oil price slump, and 2019 Covid outbreak. Each has been a major setback in the demand for the service sector, often just when recovering from the last hit, the pandemic being the recent example.
You could contend that today’s leading marine seismic protagonists are experiencing another streak of particularly frustrating bad luck affecting their business prospects beyone any economic cycle. The leaders of TGS and Shearwater GeoServices continue to report a struggle with towed-streamer activity and seemingly a temporary stalling of the growth in demand for ocean bottom seismic (OBN), as oil companies exercise ‘discipline’ in their budgets. As it happens they seem relatively sanguine that 2026 is expected to be another flat year reassuring their stakeholders that a change in their fortunes is in prospect, also they have pared down their operations to meet soft demand.
Their logic (with plenty of supply and demand charts to prove the point) is that oil companies cannot go on for ever without further exploration to top up their reserves, which are being depleted faster that they are being replaced. ‘With falling remaining reserve life, many large E&P companies will face declining production rates unless more reserves are added and brought on stream. As a result, we remain optimistic for the long-term opportunities for TGS,’ said CEO Kristian Johansen at the company’s 2nd quarter results. Echoing this sentiment, Irene Waage Basili, Shearwater’s CEO, at her company’s latest presentation stated that ‘Longer-term, the oil and gas industry needs to rebuild reserves to sustain output and support energy security. This will require increased investments in marine seismic data acquisition and imaging.’
Long term is of course the kicker. It is the seismic service companies’ bad luck that their customers are caught up a maelstrom of geopolitical, economic and energy strategy (security of supplies v. decarbonisation) pressures that call for caution and keeping the brakes on E&P spending. There is no obvious end in sight.
Many factors are forcing the hand of oil companies, which make it all the more difficult to predict when the economic climate will change. Global uncertainty exacerbated by US tariff manoeuvres is reflected everywhere with investment, consumption and employment apparently at risk (although weirdly the US stock market seems immune, constantly hitting new highs). Impact of two high profile wars with no obvious resolution is another. More directly concerning for oil companies’ immediate bottom line, as well as the viability of future investment plans, is the expected continuing decline in the price of oil as OPEC+ relaxes its production quotas when supply was in equilibrium or maybe already outstripping demand.
All this negativity is having its effect. Major oil companies are being more circumspect about energy transition investments and refocusing on the efficiency of their core business. For the time being stakeholders continue to be rewarded with dividends and buybacks to increase share value. Merger and activity (M&A) in the past year or two has been seen as an option for adding to reserve portfolios (rather than costly, speculative seismic exploration), admittedly mainly in the North American shale sector, according to Rystad Energy. But, despite a softening in the first quarter, the analyst reports international deal value for the first half of 2025 reached $39.5 billion, a 37% year-on-year increase thanks to a strong recovery in 2Q. Major transactions included ADNOC subsidiary XRG’s bid for Santos, the merger of Repsol and Nego Energy’s UK North Sea upstream businesses, Eni’s divestment of upstream assets in Cote d’Ivoire and Congo-Brazzaville to Vitol and DNO’s acquisition of Norway-focused Sval Energi. Rystad notes wryly that a potential Shell-BP merger remains the wildcard and could singlehandedly push annual deal value past $200 billion for a third straight year.
Unfortunately workforce layoffs across the industry are part of the current precarious scenario. Shell, bp, ExxonMobil, Equinor, Harbour Energy, OMV, Petronas, and APA (holding company of Apache) have all announced cuts. In the case of ConocoPhillips and Chevron, adjustment after their recent major mergers (Marathon Oil and Hess respectively) may account for some of their staff reductions, still personnel losses in the region of 20% are high.
For the seismic business, the obvious strategy is to focus on what it can control and what it can realistically anticipate is going to happen in the market without their luck running out any further. Not that this makes decisions any easier. For example, following the completion of the purchase of PGS in July 2024, TGS is already selling the Ramform Explorer and Ramform Valiant ships, and stacking the Ramform Vanguard. Likewise rival Shearwater in the last few years has recycled a number of vessels acquired when building the company and expects to sell more from a fleet at one time of 29 vessels (towed streamer, multi-purpose, source, etc).
These changes in inventory are part of some necessary housekeeping but also recognition that the era of the towed streamer has been in serious decline. Predictions of its total demise are doubtless exaggerated. However, it is not impossible to envisage the day when some form of seabed seismic technology becomes sufficiently flexible and cost-effective to carry out the exploration role once the sole preserve of towed-streamer seismic.
Among other things, towed streamer will surely continue to be partly sustained by offshore licensing round activity worldwide and the demand for seismic that it generates. Major offshore oil and gas producers like Brazil, the US (offshore Alaska as well as the renamed Gulf of America), and Norway are all in the process. Offshore South America, Suriname is due to announce a licensing round. Offshore West Africa, Namibia, Angola, Nigeria, Sierra Leone, Liberia and Mauritania are all exciting varied degrees of interest with their licensing initiatives. The eastern Mediterranean remains a hotspot with Egypt, Libya, Lebanon and Cyprus at different stages of licensing. Offshore East Africa, Kenya and Tanzania are the countries of interest. Meanwhile India has launched its most ambitious offshore oil and gas exploration initiative to date.
Innovative technology offering more cost effective operations has always been part of the tookit to capture oil company attention and spending. For towed-streamers, though not insignificant no recent advances have been game-changing. Headline improvements feature wide-tow multi-source geometries, long-offset streamers, and advanced fibre-optic towed streamers using distributed acoustic sensing (DAS) technology.
OBN has been a very different technology story with extraordinary growth against all the prevailing winds. From a very low commercial presence 10 years ago, the OBN market is on the point of exceeding the towed streamer market in 2025. If there is a downside, it is the danger of commoditisation. Currently there is no clear leading technology offered by the five key players TGS, Shearwater, PXGEO, SAExploration and BGP. There is a steady flow of contracts but the competition is intense in a tight market, and may become more so more so as BGP steps up its intention to seek more international work outside the Middle East (where its massive contracts are beginning to wind down). Clearly there is scope for OBN to reach another level in every area – vessel operations, node design including battery life, node deployment and retrieval (ROVs) not to mention ‘drone’ and other futuristic applications. Changes are likely to be incremental rather than dramatic, but enough to maintain OBN’s upward trajectory.
Finally, possible good news for multi-client companies like Viridien and TGS with the data to process, we should not ignore growing interest in how full wave form inversion (FWI) could stimulate a resurgence in reprocessing legacy 3D data based on FWI’s improved high fidelity velocity model building capabilities. If the compute resources and other challenges can be overcome, this could become a very attractive proposition for oil companies, worldwideThat would constitute good luck well earned.
A run of unjustly deserved bad luck with very little respite
Era of the towed streamer has been in serious decline
