[oil and gas] ‘poor’ geophysique buys ‘poorer’ veritas

French oil and gas field surveyor Geophysique is buying U.S. rival Veritas in cash and stock, establishing a major new global player in the oil exploration industry. Compagnie Generale de Geophysique SA and Houston-based Veritas DGC Inc. said both boards had unanimously approved the $3.1 billion deal to create CGC-Veritas, 'the industry benchmark for seismic technology and services.'

Associated Press says that companies offering seismic surveys and other oil exploration services are doing strong business around the world, amid broadly rising demand for oil and pressure on reserves. Strong business maybe but not strong returns, relatively speaking. Robert Brunk, Geophysique, CEO contrasted the $3.3 billion revenues of the top four seismic companies with the $720 billion revenues of the top four oil and gas producers. Brunck spoke for many when he advocated a fairer share of revenues, especially at today’s high oil prices.

ExxonMobil’s Bob Gistri half agreed, maintaining that a dialog is needed [between the two sectors] to understand future challenges and how these could lead to profitable growth in the service sector. Peter Carragher (BP) intimated that this year would be different—with BP being more aggressive in field trialing of new technologies. Oil IT Journal editor Neil McNaughton wonders if the Seismic industry ever has been really viable. Geophysics, unlike say, the pharmaceutical industry, doesn’t know how to turn IPR into profit—and is stuck in a Faustian contract with the oil companies.