Arrow Prospectus - PGS

ARROW SEISMIC ASA – INITIAL PUBLIC OFFERING
The figure below shows the development in the split between vessels operating in the contract and multi-client
segment in the period 1997-2006.
Figure 7-3: Development in market fleet split between contract and Multi client-segment
100 %
90 %
80 %
70 %
28 %
32 %
39 %
36 %
49 %
53 %
36 %
22 %
27 %
38 %
60 %
50 %
40 %
30 %
20 %
72 %
68 %
61 %
64 %
51 %
47 %
64 %
78 %
73 %
62 %
10 %
0 %
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006e
Contract
Multi client
7.2.3 Demand for marine geophysical services
The demand for marine geophysical services is influenced by several factors, the most important being:
• The demand for oil and gas
• The level of the oil companies’ exploration and production spending
• Developments in technology that affect the cost, quality and reliability of marine seismic data
For an overview of the demand for oil and gas and the level of the oil companies’ exploration and production
spending, it is referred to section 7.1. The developments in technology that affect the cost, quality and reliability
of marine seismic data are described in section 7.2.1 above.
The figure below shows the development in total seismic spending and the annual demand growth since 1991
(left figure) and the seismic spending in % of total E&P spending for the same period (right figure).
Figure 7-4: Total seismic spending and demand growth (1991-2006)
Source: Carnegie Research
Global seismic m arket
Seism ic spending in % of E&P spending
7 000
45 %
50 %
6 000
29 %
29 %
37 %
28 %
40 %
30 %
4,5%
4,0%
3,7%
4,0%
3,6%
Seismic spending (USDm)
5 000
4 000
3 000
2 000
15 %
5 %
20 %
20 %
12 %
8 %
12 %
1 %
-7 %
8 %
20 %
10 %
0 %
-10 %
-20 %
Annual growth
3,5%
3,0%
2,5%
2,0%
1,5%
1,7%
1,8%
2,1%
2,6%
2,9%
3,2%
3,3%
3,0% 2,9%
2,5%
2,1% 2,2% 2,6%
1 000
-28 %
-30 %
1,0%
0,5%
0
-40 %
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e
USDm
Y/Y Growth
0,0%
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e
Source: Carnegie Research
7.2.4 Supply of marine geophysical services
Companies offering seismic services span a continuum from large, integrated full service companies to smaller
low-end, low-technology companies. There are only a few major seismic players who are fully integrated
delivering a comprehensive set of services to oil companies. CGGVeritas, Petroleum Geo-Services (PGS) and
WesternGeco are the major players whom together with the mid-sized player Fugro Geoteam currently control
the majority of the seismic streamer capacity.
The figure below illustrates the development in 3D streamer capacity from 1997 to 2006. As can be seen from
the figure the streamer capacity was at its lowest point in 2005. It is expected that 3D streamer capacity will
increase in the coming years.
47