After a string of acquisitions of smaller rivals over the last four years, TGS finally moved on one of the big ones: PGS
As the company’s chewing of PGS graduates into a swallow, the question comes up: who is TGS’ next acquisition target?
The TGS-PGS tie up is a massive challenge to CGG’s dominance in both digital library and the fleet (of acquisition vessels). This ongoing merger hands to TGS a larger data library than CGS’ but relatively equal match in terms of fleet of vessels.
“The transaction helps mitigate supply chain risks and will add further to economies of scale and efficiency, enhancing the value offered to clients”, TGS explains, adding: “preliminary estimate of more than $50Million annually in cost synergies”, TGS has said in a statement. “In Multi-Client, the combined company will offer customers a global seismic library with data from all active basins in both the western and eastern hemispheres. In data acquisition, the combined company will be a substantial player globally with a strong operational track record. For streamer acquisition, it will hold an operational fleet of seven three dimensional (3D) data acquisition vessels, and for Ocean Bottom Node (OBN) acquisition, the combined company will benefit from around 30,000 mid and deepwater nodes. Within imaging, the combined company will offer a strong service to in-house and external customers integrating on-premises and cloud based high-performing computing services. In addition, the combined company sees significant growth opportunities in new energy with complementary technology offerings for Carbon Capture and Storage (CCS) and offshore wind”.
TGS has not always been gung-ho about vessel ownership, even though its specialty was in Multi-Client data acquisition, which involve days of vessel usage.
When TGS acquired Spectrum Geophysical in 2019, the word in the industry was that the Multiclient data acquisition specialist was only out to grow its data library. TGS, it was said, wasn’t in the business of owning its own vessels.
The same sentiments prevailed when the company moved on to grab ION Geophysical. It so happened that the purchase of ION’s bankrupt business included substantially all of ION’s global offshore multi-client data library, data processing and imaging capabilities, intellectual property, and Gemini Extended Frequency Source technology and equipment”, TGS said in a statement. ION’s data library consists of over 637,000 kilometres of 2D and over 317,000 square kilometres of 3D multi-client seismic data in major offshore petroleum provinces globally, generating revenues in excess of $86Million in 2021. TGS’ takeover of ION was concluded as part of the latter’s bankruptcy process in the United States Bankruptcy Court for the Southern District of Texas. At the time, Kristian Johansen, CEO at TGS, said the company was “excited about taking over another quality data library, particularly in the South Atlantic”.
TGS then moved on to grab Fairfield Nodal company, which was one of the world’s leading specialists in acquisition of 3D time Lapse seismic data.
Now it is PGS’ turn.
Who is the next target?