Integration a key challenge as Fugro looks to expand

One company determined to take advantage of the current favourable market for geophysical services in the E&P oil and gas industry is the Dutch-based Fugro Group. Andrew McBarnet spoke recently to Paul van Riel, the man in charge of the Development and Production Division, about where the company is heading. Last year was a bit of a roller coaster for Fugro’s ambitions in the oil and gas related offshore services market. The company has traditionally been content to stay under the radar in its steady accumulation of companies and technology. For example, in the past few years it acquired leading positions in the marine gravity and magnetics survey sector, in reservoir characterization, and in geologic services, notably stratigraphic analysis through purchases of LCT, Jason Geosystems, and Robertson respectively. Last August the company came out with a surprise bid for the Norwegian company Exploration Resources (ExRe), a spin-off from Rieber Shipping. At a stroke this would have substantially increased the company’s marine seismic services capability of its Fugro-Geoteam business unit. ExRe owned five vessels and operated six in the 2D and 3D seismic marketplace. The acquisition was especially attractive because of a three year joint venture entered into in 2003 under which Fugro was providing seismic operations to four of the ExRe vessels. A cosy deal was in the offing. In the event Fugro was beaten to the punch by Compagnie Générale de Géophysique (CGG) which topped its bid of NOK290 per share with an offer of NOK340 per share. In a brief statement on 29 August last year Fugro declined to raise its offer stating that it would pursue its alternative strategic plan of continuing with its own fleet and in due time replacing the work represented by ExRe ships. Paul van Riel, who was in the middle of the takeover activity, is unfazed by the apparent rebuff insisting that Fugro always had a valid alternative strategy, the shape of which became clear by the end of 2005. In October the company took a long term charter from Rieber Shipping (no less) for the Polar King. The modern vessel, now renamed Geo Atlantic, was built in 2000 and is being converted to tow 8-10 long offset, solid streamers up to 9 km in length. It already has work booked for Norwegian waters from Statoil as soon as the vessel is ready in May as part of a $40 million survey contract.