Geophysics as a Business—Then and Now
During 1997, the geophysical exploration industry had revenues of about $5.0 billion. Despite heavy investments in new equipment and technology for 3-D and 4-D seismology, operating margins were on the order of 12%, or twice that being achieved by a Seven Sister firm such as Exxon. Although West Texas crude oil sold at the end of 1997 for almost exactly what it had a decade before, i.e., $16/bbl, revenues of the geophysical industry were still growing at the rate of some 20% a year. But by mid-June, 1998, West Texas crude sold for $11.58/bbl, i.e., a five-year low. Nose-diving in tandem were stock prices of the oil service companies, some losing as much as 60% of their value between mid-1997 and mid-1998.
It is the purpose of this chapter to provide a brief synopsis of how this dynamic global business has evolved and how it operates today. Our discussion here pertains strictly to the profit-making side of exploration geophysics. Therefore, no mention is made of geophysical firms primarily operated or financed by governmental entities such as those in China, Mexico, Brazil or the Russian Federation.