INOVA – An inside view at the venture that can reshape the seismic industry
BGP and ION are no strangers to working together. Throughout the years, the two companies have carried out key seismic projects around the world. A recent highlight of this collaboration is found at the Qaidam Basin in China, where a BGP crew took FireFly, then ION’s land cableless recording system into a remote desert area to acquire seismic data using VectorSeis, the leading digital multi-component sensors. ION has also provided solutions to BGP in the form of processing services, interpretation, and marine and land equipment, amongst others. Through these projects ION and BGP recognized the value of cooperation between the world’s largest seismic acquisition provider and a company focused on building innovative and reliable seismic equipment. In the words of Mr. Wang Tiejun, President of BGP “We have always been impressed with ION’s vision for land seismic technology and the products they have developed such as VectorSeis, FireFly, and Aries. These instruments have proven capable of improving the operational efficiency and health, safety, and environmental (HSE) effectiveness of land seismic acquisition.”
Another partner to this equation is CNPC, China’s largest energy company. CNPC conceived the Bureau of Geophysical Prospecting (BGP) to fulfill its internal needs for seismic data and other services. As CNPC grew as an international company with output comparable to those of the largest multinational producers, BGP grew as well. BGP currently boasts around 113 crews worldwide with its closest competitors operating less than half that number of crews. And their clients have also multiplied. From exclusively working with CNPC, BGP now provides worldwide services to some of the largest E&P companies in the industry. BGP has become an established source for geophysical services.
On the other side of the ocean is Houston based ION Geophysical, a leading provider of seismic equipment and services with a reputation built around innovation and geophysical expertise. Originally founded as Input/Output in 1968, ION was built around seismic source synchronization equipment and, through time, kept adding pieces that complemented its portfolio. With the acquisition of GXT in 2004, ION added processing to its arsenal of land and marine equipment. Then ARAM came into the ION picture through an acquisition in 2008 bringing along, amongst other products, Aries, one of the most recognized land cabled systems in the world. However the cycle was not complete. ION could offer design services, on- and off-shore equipment, project management, data processing and interpretation, and data libraries, but relied on geophysical contractors to run surveys. This meant that ION depended on their expertise to bring new products to market and offer complete solutions to clients.
As the story unfolds, on March 25th, ION and BGP completed a joint venture transaction that established a new player in the seismic industry: INOVA Geophysical. INOVA was chartered to serve the energy and mineral industries with reliable and innovative land seismic acquisition technology and services. “By teaming up with the world’s largest land seismic contractor and combining our land seismic technology assets, we believe that INOVA will be the clear leader in land seismic equipment.” Said Bob Peebler, CEO of ION and INOVA’s board member. For the new venture BGP will own 51% of the partnership while ION will retain 49%. INOVA will be jointly headquartered in Houston and Beijing and have manufacturing capabilities and service centers in different locations around the world.
INOVA’s portfolio includes energy source and source control systems, land seismic recording systems, and digital full-wave seismic sensors. Amongst the products to be manufactured and marketed by INOVA are Aries®, FireFly®, and Scorpion® acquisition systems, AHV-IV® Vibroseis vehicles, ShotPro® and VibPro® source control systems, and VectorSeis®. INOVA will follow an open market approach to its products by making them available to all land seismic contractors and not exclusively to BGP.
To head INOVA the board of directors appointed Steve Bates, formerly Senior Vice President of ION’s Land Imaging Systems Division and, previously, Vice President of Netherland’s based Sensor. Steve is filled with great expectations about the new venture. Steve is quoted saying “We are bringing together a truly global team of experienced innovators whose mindset will be shaped by their close association with BGP, the world’s largest land seismic acquisition company. Our comprehensive portfolio of seismic technologies will be put to the test every day, in every conceivable acquisition environment, which we believe will allow INOVA to offer the most effective and durable geophysical instrumentation available in the marketplace.” Steve also likes to emphasize that one of the greatest advantages this venture brings to the seismic industry is INOVA’s ability to offer the market thoroughly tested products built with clear user needs in mind. With access to seismic crews in every conceivable environment INOVA will be able to offer out-of-the-box reliability on the products it provides. Its global footprint will also allow it to provide customers easy and quick access to service and support.
INOVA’s management team intends to build a highly innovative and efficient organization that combines the talents and cultures of the East and the West and the core competencies of BGP and ION. This blend of insights and capabilities are aimed at keeping INOVA’s products on the cutting-edge of innovation, guided by the practical reality of what contractors require to execute complex seismic programs.
The oil and gas industry will continue to follow this development as they try to evaluate its impact in the marketplace and the result of East and West collaboration. The geophysical business is already buzzing about what it means in terms of product and service offerings on a new competitive landscape. What is certain is that this partnership has the potential of turning the seismic industry upside down through new technology developments, innovative business models and customer offerings, and original operational arrangements.