NORWEGIAN company EMGS, which is the arch rival to Offshore Hydrocarbon Mapping (OHM) of Aberdeen, has secured a multi-year controlled source electromagnetic imaging contract worth a minimum of $150million from one of the world’s largest oil companies. The 3D electromagnetic campaign will employ one of EMGS’s purpose-built 3D EM vessels continuously throughout the contract period, so providing substantially improved vessel utilisation levels.
Formal finalisation was expected at the end of June, with vessel mobilisation towards the end of August.
EMGS anticipates that the contract will generate 2010 revenues in the range $20-25million and that the remaining contract value will be realised in 2011 and 2012.
Roar Bekker, EMGS CEO, said in a statement: “This award, by far the largest ever within marine EM, is a giant step forward for EMGS.
“A long-term project such as this provides us with a solid platform for future growth and allows us to manage our vessel utilisation far more efficiently. EMGS has previously provided services for this customer, and this significant award is a major statement of confidence in our advanced 3D products and high-capacity vessels.
“More importantly, it is a sign that EM technology is entering the mainstream of exploration and production workflows. We are confident that our 3D EM data will continue to reduce this customer’s exploration risk and finding costs.”
This is a dramatic turnaround from the situation last year, when both EMGS and OHM were struggling and were having to lay off staff and ships in order to weather the tough times.
A measure of the difficulties is that, even allowing for fleet reduction, recovering oil prices and new business, Bekker said in a statement issued mid-May 2009: “Although we have been successful in our efforts to reduce operating costs in late-2008 and early-2009, we must now further reduce our operating expenses to match the current demand environment.
“The vessel fleet will be temporarily reduced from three to two vessels, and the organisation will be scaled accordingly.
“These actions will result in 29 temporary lay-offs, 28 redundancies and four consultancy contracts being terminated.”
Then, in July, the Norwegian company took delivery of its second EM vessel, the Boa Galatea. Not a good time, either.
As for OHM, it gained some relief in late-May 2009 when it secured a modest contract with UK explorer Nautical Petroleum, which was keen to develop its Quadrant 9 Kraken heavy crude discovery but needed to build a better picture of the scale of this apparently promising find.
Fast-forward to mid-June and life was looking better for OHM, too, with the award of a CSEM contract worth more than $1million with an existing client – Bridge Energy UK Ltd (formerly Silverstone Energy).